Bigger bills: How the electric and gas rate hikes hit your wallet

ALBANY, N.Y (NESTAR) — The New York State Public Service Commission approved new rate hikes for National Grid and Central Hudson on August 14, raising electric and gas bills for millions.

The PSC regulates utility companies and, under current law, has sole discretion to approve rate increase requests from utilities. On Thursday, despite some reductions to the companies' initial requests, the agency OK'd higher rates for customers over the next three years.

National Grid and the PSC agreed to raise annual income generated by sales of electricity—another way of describing a price increase for customers—by $167.3 million, and for gas by $57.4 million in the first fiscal year, starting Monday, September 1. That's about 3.4% more in electric revenue and 5.5% more in gas for the first year. What's more, they're also increasing electricity by $297.4 million the second year and $243.4 million in the third, and gas by $64.5 million and then $71.8 million.

Central Hudson's rates will also grow over three years. Electric revenues increase by $29.7 million in the first year, $31.6 million in the second, and $34.5 million in the third, with gas going up $14.5 million in the first year, $15.9 million the second, and $17.5 million the third. In the first year, that's a 2.9% hike for electric and 5.4% for gas for average residential customers.

The new rates mean that an average residential Central Hudson customer using 630 kilowatt-hours of electricity per month will see their total bill go up by $9.19 in the first year. For customers using 64 hundred cubic feet of gas per month, the total bill will increase by $8.67. A typical residential National Grid customer using 625 kilowatt-hours of electricity a month will see their total bill go up by $17.24, while a gas customer using 78 therms per month would receive a bill that's $19.36 higher.

According to the PSC, a typical commercial Central Hudson customer using 2,870 kilowatt-hours per month will see their total electric bill go up by $80.18 in the first year. A commercial National Grid customer using 356 therms of gas per month will see a bill increase of $37.65.

Responding to the National Grid hike, Assemblymember Angelo Santabarbara introduced the Utility Rate Hike Legislative Review Act on Friday to let the legislature review and even reverse rate increase approvals. The proposal would apply to any future decisions and retroactively, for the previous 12 months, to any PSC-approved utility rate increase, not just National Grid.

The retroactive provision would let the legislature review decisions made when they're not in session, which Santabarbara said gives ratepayers a "direct line of representation" in decisions. His office said the bill wouldn't interfere with service reliability, day-to-day utility operations, or plans for infrastructure projects.

But that recent Santabarbara bill is not the only one on the table. When the legislative session began in January, he and State Senators James Tedisco and Kevin Parker introduced the similar S1414/A1126, the Utility Ratepayer Protection Act, to require legislative consent for any rate changes. This bill didn't advance through the legislature.

Nor did the Hudson Valley Power Authority Act. Assemblymember Sarahana Shrestha and State Senator Michelle Hinchey also previously introduced S2026A/A2127A to create a new state utility to replace Central Hudson. The new Hudson Valley Power Authority would be a nonprofit public benefit corporation run by a nine-member board of trustees, required to offer "progressive green rates." This bill featured specific protections for unionized workers and a priority for hiring from the non-renewable energy sector.

But another piece of legislation that uses a different mechanism to mandate an extra layer of protection did advance through both houses of the legislature and now awaits the signature of Governor Kathy Hochul to become law. Assemblymember Jeffrey Dinowitz and State Senator Jessica Scarcella-Spanton introduced S6277/A2468 to create a new State Utility Consumer Advocate. Their office would participate in all rate cases, represent the interests of residential customers, and report each year on the outcomes of cases, estimated savings for consumers, and policy recommendations.

The utilities say bigger bills are necessary to maintain safety and reliability of the power grid, cover increased overhead and taxes, handle cybersecurity threats, and get funding for capital projects at better rates. Plus, the new rate plans for both companies include low-income affordability programs and performance mechanisms to maintain a minimum level of service.

PSC Chair Rory Christian said in a press release that the higher rates "meet the legal requirement that the company continue to provide safe and adequate service at just and reasonable rates."

New rates approved by the PSC were lower than what the utilities requested. Central Hudson initially asked for a 5.5% increase in electric revenues and an 8.8% increase for gas, but the PSC approved 2.9% and 5.4%, respectively. And National Grid's original request was a 6.4% increase in electric and a 10.8% increase for gas, which the PSC reduced to 3.4% and 5.5%.

Still, "I have been crystal clear that utilities must make ratepayer affordability the priority," Hochul said in a press release on Friday, calling PSC's reductions insufficient. "We need the utilities to take it seriously as well. That means at a time when worried New Yorkers are being forced to tighten their budgets, all utilities must follow suit. This is no time for bonuses and big raises for executives, especially if they are going to be looking to raise rates on their customers.”

Republicans like Senate Leader Rob Ortt and Assemblymember Chris Tague also decried the rate hikes, blaming them on what they called the "Green New Scam." They're referring to legal requirements in the state to meet certain targets to mitigate climate change, like the Climate Leadership and Community Protection Act, that they claim drive up costs, which companies must pass on to consumers. Tague made the case that upstate families pay 40% more for electricity than in neighboring Pennsylvania, which he called "an assault on hard-working New Yorkers."

But environmental and public power advocates had different criticisms. The Public Power NY coalition pointed out that, beyond greenlighting higher bills, the PSC denied the New York Power Authority's Clean Path transmission project. They claim that denial, supported by Hochul, will cause "higher bills, more blackouts, and worse pollution across downstate New York." They said that decision only benefits "fossil fuel companies, shareholders, and privately run utilities that stand to get richer off the crisis."

According to the Renewable Heat Now campaign, Central Hudson saw consistent earnings over the last decade, with net profits ranging from around $40 million to over $60 million. And Ulster County Executive Director Jen Metzger said its parent company, Canada-based Fortis, Inc., represents a major obstacle to adopting clean energy and addressing climate issues.

Meanwhile, in the wake of the decision to raise rates at Central Hudson and National Grid, State Senator Pete Harckham opposed the proposal for a similar price hike from New York State Electric and Gas in a letter to the Public Service Commission on Monday. He pointed out that over 1.2 million New Yorkers already report being behind on their bills, owing almost $2 billion combined.

According to the senator, residents in his district—many of whom report bills over $1,000 per month in the winter—already face enough financial hardship. Harckham said NYSEG's requests—a 35% increase in electric delivery rates and a 39.4% increase in natural gas delivery rates—prioritize "shareholder profits over consumer affordability."

Dinowitz linked his legislation above—creating a State Office of the Utility Consumer Advocate—to another similar Con Edison rate hike proposal. According to the Assemblymember, Con Ed wants to hike rates on January 1, 2026 by almost 11.5% for electric and by almost 13.5% for gas. Under that proposal, your average New York City residential customer would experience a 2.7% increase.

National Grid, Central Hudson, NYSEG, and Con Ed deliver power to the majority of the state. Only Long Island, Rochester, and some pockets of Western New York, Central New York, and the Finger Lakes are outside of their aggregated coverage area.

In related news, a recent study from UtilityRates.com ranked New York as the fifth-most reliable state for utility services in 2023, behind Hawaii, Delaware, Maryland, and Rhode Island. The study noted that Southern states tend to struggle most with reliability.