I live in New York with a de-regulated energy market. But, while I can choose my energy supplier, I’m bound to the utility that delivers my energy – ConEd. Since I live in the ConEd service area as defined by New York Public Utility Commission I am a ConEd customer.
So why can’t I choose a different utility to delivery my energy? This is a result of energy de-regulation that took place in New York in 1996 known as the ‘Vision Ruling’. We will revisit the Vision Ruling a few times, but for the sake of this post, the bill divided New York utility service areas.
source: NY SmartGrid
A few details on this map to point out. Some of these details are important as we try to understand why New York energy rates are some of the highest in the country.
- Notice how much of NY State is serviced by a state owned utility, the NYS Electric and Gas utility. New York is in a unique position in the energy market – NYS is one of the main electrical suppliers via hydroelectric that NY Power Authority manages. Seems like the more rural areas are not serviced by commercial utilities.
- Notice all the small municipal utilities throughout the state. These special entities control both electric supply and delivery rates in their communities. This is exactly what energy de-regulation was supposed to end.
The reason I’m pointing all this out is that New York electric bill has two main components – delivery and supply. Where I live in White Plains, NY delivery rates have been as high as 70% of my electric bill. Delivery rates don’t fluctuate nearly as much as supply rates and now-a-days in late 2023, they comprise roughly 50% of my power bill as this chart shows.
What are some practical implications of such high electric delivery costs?
- Cutting electricity usage saves 2-3x the basic energy supply rate. Also, increased electric supply usage increases costs 2-3x of energy supply costs.
- Choosing an energy supplier isn’t as impactful in a bill as it may seems, since the rates are always doubled, or even 3x base costs. When we choose an energy supplier in New York, we are only making a choice for half of our utility costs.
- While this chart doesn’t reflect this detail, both energy supply and delivery are taxed.
These facts are important when calculating the costs of an EV, the benefits of Solar, switching appliances to electric or gas, etc.
Gas Delivery Rates – Now this is REALLY nuts
One of the most jaw dropping charts I’ve seen shows how much I pay for gas delivery. I get it, there’s a war in Ukraine, Russia is screwing up, the USA is shipping tons of Liquified Natural Gas over seas, but what the fuck!!!!??? 70% of my gas bill goes to gas delivery, which is bringing the gas from an underground pipeline to underground pipes in my home that have been in place for over fifty years.
To repeat, 70% of my gas bill has nothing to do with gas supply markets, fluctuations in gas prices, wars, weather, etc.
More to come!
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