New York is facing an \u201cenergy affordability crisis,\u201d as lawmakers put it.<\/p>\n
Elected representatives across the state have sent letters to Governor Hochul this winter calling for ratepayer relief and policy changes to mitigate rising energy bills.<\/p>\n
In February, nearly three dozen assembly members called on the governor to declare a State of Emergency for the state as residents face \u201chistoric and unsustainable increases in electricity costs.\u201d<\/p>\n
As of December, more than 1.28 million households in New York were behind on their energy bills by 60 days or more. Utility debt has reached $1.84 billion, more than double the amount owed prior to the pandemic in December 2019, according to energy utility monthly collections reports.<\/p>\n
And for New Yorkers, electricity costs are 50 percent higher than the national average.<\/p>\n
Splitting the bill<\/p>\n
The energy bill you open from National Grid or NYSEG every month is split between the market side of the bill and the retail side. Both recently approved rate increases on the retail side and the volatility in supply on the market side are driving up your bill this year.<\/p>\n
The retail side of your bill includes everything the utility company needs to run the business and everything utility companies make a profit on, through \u201cdelivery\u201d charges.<\/p>\n
Utility companies are fully rate-regulated, which means they can\u2019t charge whatever they want.<\/p>\n
Delivery charges go towards the maintenance of the entire delivery system. Essentially, a fee you pay for National Grid and NYSEG and others to operate.<\/p>\n
Energy \u201cis being delivered through pipes and wires, and the pipes and wires need to be maintained. Electricity and natural gas are being delivered through that system 24-7, 365 days a year, and we need to have crews that can go out and maintain it,\u201d National Grid spokesperson Patrick Stella told The Daily Gazette.<\/p>\n
Delivery charges encompass a litany of all that is required to maintain, operate, and repair the energy distribution system, including power lines, poles, transformers, substations, gas pipelines, meter reading, billing, storm response crews and safety inspections.<\/p>\n
Utility companies generally maintain that those delivery fees are based on usage, but you\u2019d still be charged a delivery fee even if you didn’t use any gas or electricity.<\/p>\n
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PETER R. BARBER National Grid workers switch transformers and primary power wires to a new pole at S. Brandywine and Duane Avenue after an accident early Saturday, April 12, 2025.<\/p>\n
\u201cThere is a minimum delivery connection fee even if there is no use,\u201d said Stella. \u201cEven if you use zero energy, the utility still must maintain the system that serves your home \u2014 so delivery charges remain.\u201d<\/p>\n
Part of the reason \u201cdelivery\u201d costs are up this year is that those costs were raised as part of a three-year rate plan approved by the New York Public Service Commission in August.<\/p>\n
According to National Grid, the rate hike was approved to cover material and equipment price increases and \u201cstorm-response readiness needs.\u201d<\/p>\n
That rate hike in September was the culmination of a comprehensive review process of a joint proposal submitted by National Grid, the PSC, and \u201cparties representing a broad perspective of interests\u201d back in May of 2024.<\/p>\n
Those parties who proposed the rate increase include the New York Power Authority, Independent Power Producers of New York, the New York Solar Energy Industries Association, the Empire Natural Gas Corporation, Alliance for a Green Economy, Walmart, and Turning Stone Enterprises, among others.<\/p>\n
The settlement was agreed upon, and the price is set to rise every year through 2027.<\/p>\n
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National Grid workers operate from bucket trucks high above Route 30A in the town of Mohawk performing maintenance on power lines Jan. 6.<\/p>\n
PETER R. BARBER<\/p>\n
For its customers, National Grid estimated a total monthly bill increase of $14.32 in the first year, $6.44 in the second year and $4.34 in the third year. That\u2019s a total of $25.10 that National Grid split up over three years to prevent a large upfront rate hike, Stella said.<\/p>\n
The plan includes $1.4 billion for National Grid\u2019s electricity system and $351 million for the natural gas system just in the first year.<\/p>\n
That\u2019s one side of the bill.<\/p>\n
The supply side of energy costs, or \u201cusage\u201d on your utility bill, is the market side. Like all markets, those prices are based on supply and demand.<\/p>\n
\u201cWe\u2019re not building the generation that the market says is necessary,\u201d said Kevin Lanahan, vice president of external affairs and corporate communications at the New York State Independent System Operator, NYISO. \u201cAt the same time, we\u2019re not building, we\u2019re getting rid of generation.\u201d<\/p>\n
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photo-from-drupal<\/p>\n
By More from the Daily Gazette<\/p>\n
Utility companies sell the supply straight to their customers without markup, and it\u2019s their job to get the lowest prices for that supply. Though securing the lowest prices has become increasingly difficult, namely due to market volatility fueled by rising demand and dwindling capacity.<\/p>\n
In a January report, NYISO states part of the problem is that policy initiatives to get off natural gas are shutting down sources that aren\u2019t being replaced fast enough.<\/p>\n
Older and more expensive generators are being relied on more frequently.<\/p>\n
At the same time, the rising price of electricity is a direct result of volatility in the natural gas market as New York still powers half of its 450 generating stations with natural gas, according to the report.<\/p>\n
NYISO provides the state with energy by running the statewide transmission system and selling energy on an open market. It was established in 2000 to de-integrate the former system in which utilities owned and operated all of the state\u2019s energy and its sources.<\/p>\n
Now, energy is purchased through NYISO\u2019s market. But Lanahan says NYISO\u2019s mandate to keep prices as low as possible is becoming increasingly difficult to meet.<\/p>\n
\u201cWe\u2019re razor thin on the supply,\u201d Lanahan said.<\/p>\n
Utilities attempt to purchase enough energy in advance to meet market demand, but if demand rises above a certain level, they have to purchase energy the same day it is used at higher prices.<\/p>\n
During peaks in demand, energy is also sourced from \u201cpeaker plants,\u201d which is significantly more expensive.<\/p>\n
Additions and Deactivations to the state power grid since 2019. Photo courtesy of NYISO.<\/p>\n
Lanahan says demand for energy used to be flat. That simply isn\u2019t the case anymore.<\/p>\n
Peaker plants are older and costly generators that are being fired up more frequently to meet demand. Many peaker plants burn oil, and over three-quarters are at least 30 years old and generate more polution.<\/p>\n
Meanwhile, the state\u2019s Nine Mile Point 1 and Ginna nuclear facilities are also the two oldest operational nuclear units in the country.<\/p>\n
\u201cState subsidies are driving investments in infrastructure and plants based on public policy desires,\u201d said Lanahan. He says that if markets are allowed to do their thing, they signal where investment is needed, which wouldn\u2019t always lign up with where policy is trying to focus investment, namely green energy.<\/p>\n
\u201cWe\u2019re trying to coexist with policies, but reliability is suffering.\u201d<\/p>\n
Lanahan says this has been the case for at least the last five years.<\/p>\n
Statewide winter-peak demand for electrification is expected to rise from 2026 through 2044 (in megawatts). Photo courtesy of NYISO.<\/p>\n
Photo courtesy of NYISO<\/p>\n
Increasing demand is also aggravating prices, augmenting the effects of dwindling energy sources.<\/p>\n
Data centers<\/p>\n
Electricity generation is projected to grow by 1.7 percent in 2026, fueled by rising demand from data centers and large industrial loads, according to NYISO.<\/p>\n
In New York, over the next ten years, the NYISO expects more than 2,500 MW of new demand associated with large-load customers, including data centers and chip manufacturers, plus demand from building and transportation electrification efforts, which is forecasted to add more than 6,500 MW of new demand by winter 2034-35.<\/p>\n
That\u2019s 9,000 megawatts put towards industrial use, which is approximately double the electricity use of all New York households combined, according to proposed legislation.<\/p>\n
Assemblymember Carrie Woerner (D-Round Lake) said data centers and energy-intensive industries are generating more demand than ever, reducing supply.<\/p>\n
NYISO activated demand response 22 times during the 2025 peak seasons, signaling mounting risk of future energy supply shortfalls. Demand response asks large energy users to reduce consumption during peak periods. Photo courtesy of NYISO.<\/p>\n
\u201cAnd it’s not just data centers,\u201d Woerner said. \u201cIt’s also the semiconductor industry, a very energy-intensive industry, hospitals are very intensive. So there’s just, there’s a growth in energy use, from an industrial perspective, and we need to fix that.\u201d<\/p>\n
\u201cWe need to either give [industries] their own rate that is reflective of how much supply they use up that, or we need to put a requirement that they have to generate their own energy that they can’t draw from the grid. We have to do something to fix that,\u201d said Woerner.<\/p>\n
Curbing costs<\/p>\n
Lessening the blow of rising utility costs is a short-term solution lawmakers aren\u2019t writing off.<\/p>\n
As of December, $770.6 million of the money collected from customers for the Clean Energy Fund is still being held in escrow by utility companies, according to a letter to the governor signed by Woerner and 16 colleagues in the state Assembly, including DiDi Barrett, the Chair of the Committee on Energy.<\/p>\n
Those funds are collected through the System Benefit Charge on your bill, or the SBC charge.<\/p>\n
But that $770.6 million is not currently allocated to any particular program or project, according to Woerner. She says they should be returned to ratepayers in the form of bill credits.<\/p>\n
The letter to the governor also calls for a pause on state taxes on utility bills.<\/p>\n
\u201cWe need to be looking at longer-term solutions that systemically fix the imbalance between supply and demand,\u201d said Woerner.<\/p>\n
In NYISO\u2019s January report, the group calls for investing in existing gas infrastructure and replacing aging gas with newer technology to source a more reliable grid. It supports what they refer to as an \u201call of the above\u201d approach that implements gas energy sources in tandem with renewable sources.<\/p>\n
But not everyone agrees with that strategy.<\/p>\n
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Long-distance transmission power lines cross through Plano, Texas, near Spring Creek Parkway and the Dallas North Tollway, Aug. 17, 2023. (Tom Fox\/The Dallas Morning News\/TNS)<\/p>\n
Tom Fox\/The Dallas Morning News\/TNS<\/p>\n
Justin Balik of Evergreen Action, a 501(c)(4) climate-change-advocacy group, says there should be central, coordinated energy planning outside of what the NYISO does, namely for capital investment for infrastructure.<\/p>\n
\u201cEverybody’s using costs as an argument to invest more in gas infrastructure,\u201d said Balik. \u201cAnd we’re missing the whole plot here, which is that the price of gas is going up and skyrocketing, and the availability and cost of it and reliability is extremely volatile. So if we’re actually looking to lower costs for people, we think the facts and politics bear this out, that clean energy is the way to go.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"New York is facing an \u201cenergy affordability crisis,\u201d as lawmakers put it. Elected representatives across the state have…\n","protected":false},"author":2,"featured_media":158250,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[63989,55371,65347,14655,75,84,83,9,24,63],"class_list":["post-158249","post","type-post","status-publish","format-standard","has-post-thumbnail","category-manhattan","tag-energy-bills","tag-energy-crisis","tag-energy-shock","tag-lawmakers","tag-manhattan","tag-manhattan-headlines","tag-manhattan-news","tag-new-york","tag-new-york-city","tag-nyc"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/158249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=158249"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/158249\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/158250"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=158249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=158249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=158249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}