Why Are Electric Rates So High In New York?

New York State has the third highest residential electric rates in the United States; only Connecticut and Hawaii have higher rates. New York is 19.48 cents per kilowatt hour (kWh), Connecticut is 20.24, and Hawaii is 36.94 cents per kWh.

Falls on the Battenkill River near where it meets the Hudson River

The average retail price of electricity for the entire country in September 2008 was 10.31 cents per kilowatt hour (kWh).

Rates in New York State are almost twice the national average.

You can see a list of all 50 states and their Residential, Commercial and Industrial average retail price of electricity on the Energy Information Administration website. ( The information on this site is updated monthly. As of November 1, 2009 the data is for July 2009. ) There is a wealth of information on this site, but you have to sort through it.

The information above is from the December 2008 edition of  Electric Power Monthly which is published by the Energy Information Administration (EIA), a statistical agency of the U.S. Department of Energy.

Why are electric rates so high in New York State?

According to this Facts about New York page on the EIA website:

New York produces more hydroelectric power than any other state east of the Rocky Mountains. The Robert Moses power plant on the Niagara River is one of the largest hydroelectric facilities in the world.

Although New York’s total energy consumption is among the highest in the United States, per capita energy consumption is among the lowest in the nation due in part to its mass transportation systems in the New York City area.

The average New York household consumes about one-half the electricity of the average U.S. household, largely because few use electricity as their primary energy source for home heating and because demand for air-conditioning is low during typically mild summer months.

One-half the electricity of the average U.S. household? That is an amazing statistic for New York.

So why are our rates so high?

Only Washington State (60,778), California (28,235) and Oregon (26,225) produce more hydroelectric power than New York (20,711). These are year to date numbers in Thousand Megawatt hours. The next 3 highest hydroelectric power producers are Idaho (8,061, Montana (7,672), and Arizona 5,797).

The New York Power Authority (NYPA), “America’s largest state-owned power organization”, according to their website, provides some of the lowest-cost electricity in New York State. That is a pretty vague statement considering New York’s rates are so high to begin with. I have been to the NYPA website and I can’t find their rates anywhere.

NYPA was established by New York Governor Franklin D. Roosevelt in 1931 to, “give back to the people the water power which is theirs.” I think the people are still waiting for this to happen, 78 years later.

In a February 23, 2005 press release, U.S. Senator Charles. E. Schumer urged the Federal Energy Regulatory Commission (FERC) to reconsider its recent decision to reject Green Island Power Authority’s (GIPA) application to study the Cohoes Falls Project. He went on to say, “I am also very concerned about the fact that 73% of all hydroelectric power generation in New York State, including this plant, is now controlled by foreign companies.”

The hydroelectric power plant in Cohoes, NY is owned by a company based in Canada, Brookfield Renewable Power. Brookfield Renewable Power operates 75 hydroelectric generating stations on 15 rivers in New York State, according to their website.

An organization called Power in the Public Interest (PPI), in Olympia, Washington was “formed to promote state, regional and federal electricity polices that secure for consumers a reliable, affordable and durable electricity system.” Their website has a wealth of information and charts that compare electricity rates in all of the states. It also compares New York state electric rates to “regulated” states. Deregulation of electricity in New York has been a disaster for everyone except the power companies.

One article called “Electricity Price Trends in New York Compared to Trends in Price-Regulated States” uses data from the Energy Information Association up to June 2007. It claims that “for the 12 months ending June 2007,  New Yorker’s paid $22 Billion for their electricity. The same amount of electricity at the regulated states’ average rate would have cost $11.6 Billion—a difference (or comparative purchasing-power disadvantage to New Yorkers) of $10.4 Billion for a twelve month period. This is not to say that deregulation is responsible for the whole gap, or that the gap can be closed. The gap does, however, reveal the significant economic disadvantage suffered by customers in New York, and the imperative for New York to pursue the most effective form of economic regulation of electricity.”

Some of that $10.4 Billion could help close the New York State budget deficit that Governor Paterson is struggling to deal with, but it really should go to the citizens of the state who have been overcharged and abused for so many years.

I urge you to go to the PPI website and read the entire article yourself. Even though it uses data that stops at June 2007, it goes back to 1991 and clearly shows that New Yorkers pay too much for electricity. Based on current prices and rates, I’m sure there would be no difference in this article if it was updated to include September 2008 data.

Here is a link to an article titled, “Will NYPA creep away with another 50 years?” It is subtitled, “18 nauseating facts about NYPA, Niagara and you.” It is interesting reading.

I live within a few miles of three hydroelectric power plants. They are small, but they use the power of the Hudson River, Battenkill River and Fish Creek to generate electricity. Yet I still pay some of the highest electric rates in America.

Dramatically cheaper electric rates would benefit everyone in New York state.  Can anyone explain this to me? Why can’t we have the lowest rates in the country instead of the 3rd highest?

Feel free to email this post to your New York State Assemblyman or Assemblywoman and your State Senator. You can find their email address here. Under State Government, click on Assembly, New York State or Senate, New York State to find your representative.

I would love to hear your thoughts. Be sure to read High Electric Rates in New York, Part II, the next article on this blog.

If you found this post by doing a Google search and didn’t find the answer to your question, let me know what it is and I will try and find the answer for you. You can leave a comment or go to the home page and send me an email directly. Thank you. I appreciate your visit.

25 Responses to “Why Are Electric Rates So High In New York?”

  1. Dave Roberts says:

    John,

    I do not have the facts to back this up, but I believe that despite all the data you have assembled about the generating capacity in our state that we still must “buy in” a vast quantity of electricity to meet demand. Check out the size of our contract with Hydro-Quebec for example. Plus, NY operates some of the most expensive and oldest nuclear facilities in the country, located in highly populated areas and will be paying for a long time to come for the shut-down of the Shoreham facility. Consolidated Edison which supplies NYC has incredibly high operating costs as you can imagine for such a densely populated service area. BUT I would like to know how our National Grid rate compares to, for example, those of our neighboring utility, New York Electric and Gas. Used to be, when it was Niagra Mohawk, that they were much lower do to the heavy use of by NiMo of the hydro you cite. Any idea?

    Dave

  2. John Tedder says:

    Dave,

    As far as I am concerned, there is no excuse for New York having the 3rd highest electric rates in the country and something should be done about it. Deregulation is a part of the problem and incompetence and corruption also play a role. I am going to email some folks in Albany today and ask them why the rates are so high and see what they say.

    Did you click on the last link in the post, “Will NYPA creep away with another 50 years?”

  3. Rates says:

    I found you on yahoo while searching for rates. I just Stumble it on Monday!

  4. Nitediver says:

    I stumbled ont this site while searching for electricity rates in new york and why they are so high. I was trying to figure out why my girlfriend’s bill was so expensive this month compared to the past few months. It is interesting to see that half of the bill is basic and delivery charges and the supply charge is the other half. Her supply charge for Jan 2009 is 11.2063 cents/kWh while the past few months ranged from 3.81 – 4.16 cents/kWh. That is an enormous increase!!! I’ll be calling ConEd to get some answers. If anyone else has any suggestions please feel me in.

  5. John Tedder says:

    Don’t forget to read my second article on electric rates, “High Electric Rates In New York, Part Two

    http://www.teddersrandomnotes.com/blog/2009/01/14/high-electric-rates-in-new-york-part-ii/

    I would be interested to know what you find out from Con Edison. Thanks for commenting.

  6. bea says:

    I’ve been asking almost everyone including National Grid aka Mohawk Niagara since I started paying power back in ’06. For a 2br apartment with only appliance working is refrigerator, I’m ridiculously paying $275 each month for power. I’m barely in it because I work from 3pm until midnight. The landlord is so dumb about the whole thing. I’ve asked my co-workers and speculations arises, such as other apartment unit hooked on my meter! Even the street lights are hooked on my meter! Anyway, I’m back in town. Hope to get better answers now or my paycheck will suffer.. again!

  7. Michaela says:

    I live in Central (upstate) New York. When I received my National Grid bill for the period January 04 thru January 31, 2009, I immediately noticed that the total unit cost per kw-hr had risen substantially from the previous month. Taking a closer look at my bill, I noted the electricity supply charge had increased by 25% from the previous month. In December ’08, the supply charge was $0.06539 per kw-hr. In January ’09, the supply charge was $0.08166 per kw-hr. Adding the basic service charge, delivery charge, delivery adjustment charge and taxes, this made my total $0.18145 per kw-hr for January ’09. Why such an increase when commodity prices remain low? What really astonished me, is that National Grid had charged my Mother (who lives 3 miles from me) only $0.06811 per kw-hr for electricity supply, for the same period in January ’09, her billing period was offset by only a couple of days from mine. So I was charged 20% more than my Mother was, by the same company, during the same month for the same electricity. Both our services are residential and non-heat. I called National Grid to complain, they did not offer me an explanation, neither did they offer to make an adjustment, so my next step is to file a complaint with the NYS Public Service Commission. I’m also shopping for another electricity supplier. Check your National Grid bill folks! You may be getting overcharged!

  8. Kenny SurEssi Sr says:

    I am first time purchaser of the National Grid product for gas and electricity. I maintain no qualms over the price of my usage of their products at this time, however, I do have issue with the cost of their Delivery Fee.

    My bill for the month of September totaled $40.03 for supplied services. Of this $19.27 is elec. and $20.76 for gas. The Delivery charge for these products are $46.64 for elec. and $39.49 for gas; this totals to $82.13.

    I am dumbfounded by the alarming rate it cost Native New Yorkers for National Grid to deliver a product in which the means of delivery have been paid for a million times over already!

    I am unable to have these products delivered to me in this region since National Grid is the only provider. Are there any other means available to myself and others here in Syracuse, N.Y. to over come this burden of being over charged?

    Thank you for any and all advice.

  9. John Tedder says:

    Kenny, I would go to the New York State Public Service Commission first. There is a lot of information at this site. If you click on What You Should Know Before Choosing an Energy Supplier” there are phone numbers at the bottom of the page that you can call. Some of the information on this site is out of date. You can also go to the National Grid website and find out what they say about delivery charges. From briefly looking at the National Grid site, I think you can choose your supplier, but not the company that delivers the gas or electric.

  10. David says:

    I got here searching for NY state eletric kw/hr rates, which I still haven’t found.
    However you forgot to mention that NY has several Nuclear power plants which should LOWER the cost due to increased supply, that obviously hasn’t happened.

  11. John Tedder says:

    Thanks for commenting. I will see if I can find that information for you and post the link on this site.

  12. John Tedder says:

    If you go to this link in this blog post, ( http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html ) it will take you to the Energy Information Administration’s website. It will show you the electric rates per Kwh for each of the 50 states. It is further broken down by Residential, Commercial and Industrial rates. New York’s rates are still among the highest.

  13. shawn gadwa says:

    This is an interesting blog. As a resident of new York for a couple of years, I’ve noticed new York is very high. I don’t know why.

    But, I do know it doesn’t have to be this way. Since the government deregulated utility companies, consumers now have a right to choose. There are many other companies that you can choose from. What I found to be the cheapest and best is one called Ambit Energy. They are currently #1 on the inc 500 list of the fastest growing companies in the USA.

    They guarantee a 1% savings but for many new yorkers, its more like 10-11% and about 5% off gas.

    Go to shawngadwa.joinambit.com

  14. John Wortmann says:

    Part of the reason, as explained to me by O & R reps in the Hudson Valley area is the high operating costs in NY for employeess (i.e workman’s comp some of the highest rates in the US) Also cited were the high property taxes these copmpanies pay on land they own that houses their various facilities. legitimate arguments, but then Con-Ed, which ownes Orange and Rockland in the Hudson Valley, still mamanged to make a $49 million profit last year.

  15. Brigitte says:

    September05,2012 to me amazing that the customer of National grid for example, are not arguing more about their bills and all the fees .
    delivery charge, almost identical as your supply you have used. I think the charges and taxes are abusive
    Of course we have the resource to change the company but national grid seems to have the monopole and change or not the provider, you will still have to paid the delivery charge to the National grid. I am very unhappy to live in NY ,we cannot live like others states, we have to constantly make sure not a single bulb is on, otherwise we will see end of the month the bill.
    I have a pool, only filter working, 4 bulbs during the entire day, two fridges a computer working as well may be 3 to 4 hours one flat TV, I wash the clothes one time per week and dry as well. All equipment are energy star. I was told that we have used 3080 kilowatts. We did not have AC on, but a microwave as well a cafe machine. Bill $479,80 , I tried to complain by national grid, I was told because your home is big… I finally learn that we had a special reader meter who The employee of national grid said-was better for us,(We are two but mostly one person at home.)National grid refuse first to come to see the reader meter.. then told me that I would even paid more if we get again the regular reader meter. Well I keep to explain National grid that even my home is big, if you are barely there of use so little, a is impossible to consume that much, They have remove that rear reader meter and told me that they will look if that meter is ok. I am sure that they are going to tell me the machine was correct…. Anyway we have a new normal reader meter and after ten hours, I only use 4 kilowatts. I think anyway that the people should complaint about the fees and taxes that very unfair to all of us. !

  16. Jason says:

    Many people don’t realize that many of these utility companies are FORCED to pay money to NYS for development projects (This cost is passed onto the consumer) We had a new building built in Rochester and it was partially funded through RGS / RG&E. NYS forces them to cough up money for development projects that are unrelated to energy production or distribution.

  17. Nucky Jones says:

    As a resident of Washington State, I can tell you guys that you are ABSOLUTELY being robbed. NY has similar power assets (dams) to WA. The difference? Washington has PUBLIC UTILITIES. Meaning each county, city, whatever can have a publicly owned utility. Mine is Clark Public Utilities. They are THE BEST power company I have ever seen. They buy most of their power from Bonneville Power Admin, and have a Natural Gas Gen Station as a load balancer. We pay about 6.6-6.8 cents/KWhr. Even better, industrial customers pay 4.5 cents/kWhr(!!!). How do I know that? Because they post the rates in PLAIN ENGLISH on the site. All this talk I hear of “Delivery Charges, etc” is EXACTLY what the problem is in NY…..it’s all a giant scam to suck money out of the pockets of New Yorkers. What NY needs to do to solve this problem is get rid of companies like ConEd and National Grid and implement Public Utilities Districts (PUD) that allows municipalities to own their own power and water (Seattle City Light, Clark Public Utilities, etc). I’d like to note that Portland OR, just 3 miles from my house has Portland General Electric. They are a for-profit company that gets their power from BPA exactly the same as Clark PU. Portlanders pay 15-20 percent more per kWhr AND PGE plays the same games with obfuscation thru “Delivery charges” etc to keep the public in the dark. Free yourselves brave New Yorkers!!! PUBLIC UTILITIES DISTRICTS. DEMAND THEM!!!

  18. Bob Raster says:

    I truly believe that in every large city there are too many hands in the pot and that equates to much higher rates. Much of the cost of doing business has to go through the hands of politicians that like the senators and congress, divert funds to their own personal coffers. It is a known fact that on average, every congress person leaves office 7.5 million richer. It works the same in heavily populated states that siphon off funds to their personal accounts from deals made with most utilities, and commonly known as lobbying.Public utilities should not operates on a profit basis, but rather be regulated by strict guidelines that benefit the consumer. Problem is, there is just too much corruption when money can be made.

  19. Bill Howland says:

    Well the reason I’m on this blog, is that two marches ago (2012) I was paying 8 1/2 cents per kwh (marginal cost over the entire bill, delivery and supply). Last month’s bill was 12 cents / kwh, and yesterday’s bill was 20 cents/kwh now that I am paying 7 cents/kwh for ESRM, which they say is a tranmission expense, which I thought I was already paying for in the delivery part of my bill. So, today I’ve switched to BluCo energy for 8.42 cents/kwh for 6 months plus the customary 5 cents/ kwh delivery (scam) charge, so it won’t be too bad.

    I’m in Buffalo, and Niagara Mohawk traditionally had low rates. That was before Mario Cuomo instituted ‘deregulation’ meaning that the 2 cents per kwh it cost them to make juice and sell it for 4 cents per kwh now they had to buy cogenerated power from any tom,dick, or harry and pay 6 cents per kwh for it. Of course, they basically went bankrupt since you can’t survive getting 4cents per kwh coming in and shoveling out 6.

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  21. frank says:

    how can we get rid of nationalgrid.The delivery chages are so high.they do aS THEY PLESE.

  22. rock wagner says:

    I just checked my electric rates.
    My bill is
    $148.46 dollars for 1320 kwh. this includes all delivery charges ($43.96) basic service charges ($15.11)SBC/RPS charge ($8.37) taxes ($7.03) etc. My account is with NYSEG. I come up with a rate of 11.24697 cents per kwh ($148.46 divided by 1320 kwh) My zip is 14094, Lockport NY.,which is aprox 20 miles from Niagara Falls and the Somerset ny power plants and 2 miles from the GM cogeneration plant. Not sure how the kwh prices could be so much different as stated in above articles and other data I have researched. Just getting into this.Hope I’m calculating properly. Any Factual feedback welcome. Thanks.

  23. John Tedder says:

    Rock,
    I just went to the U.S. Energy Information Administration website at http://www.eia.gov/ The link below shows the average price for electricity by state. Perhaps the rates in New York City are higher than the rest of NY state and distorting the results. Maybe you are benefitting by being so close to the power generated by Niagara Falls. http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_a

    Thanks for commenting.

  24. rock wagner says:

    Rather than speculate I think it best we get some real life bills from resident throughout the state and NYC. We have been lead to believe that our area pays the highest rates in the country. reminds me of the old saying “believe none of what you hear and only half of what you see” I am trying to get solid info from people that live in other states. Will let you know. Thanks for getting back.

  25. rock wagner says:

    Checking over my electric bill again and some web info re. alternate suppliers. I find that my “supply charge” (what i pay for energy purchased by NYSEG) is about .05 and 1/2 cents, (five and one half cents) per kWh. t
    The exact rate is 0.05455208 x 1320 kWh =$72.01. My total bill is $148.46 of which $64.72 is “delivery charges” (what i pay NYSEG to transport energy to my home),basic charge $15.11. The remainder of the $148.46 bill is taxes etc. Bottom line is –if i got the electricity free from another supplier, i still have to pay the same delivery and basic charges to NYSEG. So .05 and 1/2 cents per kWh is as good as i can do at this point, unless I am missing something. If someone has a residential bill from NYC or away from Niagara falls NY please share info. Thanks

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