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.

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.

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