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New York’s eye-watering energy price hikes hit home as 1.3 million residents fall behind on bill payments

March 18, 2022, 1:12 PM UTC

Utility bills for New Yorkers have jumped by 50% over the winter months, leaving many struggling to pay.

The monthly bill for the average New York City residence using 300 kilowatt-hours of electricity has jumped from $82.50 in December to $123.65 in January—a 50% increase according to the local utility company Con Edison, which supplies energy to New York City and nearby Westchester County.

Across the entire state of New York, now roughly around 1.3 million residential customers are behind on payments, with the total unpaid bill rising to a historic $1.7 billion, according to state filings from 10 major utility companies.

Public Utility Law Project in New York, a nonprofit that educates people about their legal rights as utility consumers, said one in five New Yorkers are in danger of losing their electricity service, and they could be receiving service termination letters for their gas and heat as early as mid-April. 

High electricity prices will also trickle down into the price of everything at a time when price inflation is hitting a four-decade high.

In a statement to the Financial Times, Con Edison blamed the rising utility bills on an increase in wholesale power prices, which are driven by generators’ gas costs and higher demand during cold weather. “We buy the energy on the wholesale market and provide it to customers at the same price we paid,” the company told the FT.

Con Edison had not replied to Fortune’s request for comment at time of publication.

Rising temperatures, rising costs

Around 14% of Con Edison’s 3.5 million customers are more than two months behind on their bill payments, and the total number of arrears has increased by 42% since the start of the COVID pandemic, according to documents the utility sent to the New York Public Service Commission and seen by the FT.

“It’s becoming so hard to pay the bill,” a 79-year-old New Springville resident named Russell Pinto told Staten Island Live.

The price of electricity bills are decided by two factors: delivery and supply charges. Utility companies cannot change delivery charges without approval from their state regulator, but supply charges are determined by market supply and demand.

While the New York spot price for gas has dropped from January to February, the price of gas is still 79% higher year on year, according to S&P Global. The rise has been driven by higher winter demand, the easing of pandemic restrictions, and constrained supply due to geopolitical tensions made worse by Russia’s war on Ukraine.

As utility bills rose, New York Gov. Kathy Hochul has called on Con Edison to review its billing practices and proposed $400 million be added to next year’s budget to assist households behind on utility payments. “The extreme utility bill increases all of us are seeing are having a serious impact on our household budgets, and in response we are taking action,” Hochul said in a statement.

A Con Edison spokesperson told the Guardian, “We are reviewing all of our practices that affect customer supply costs, including our energy-buying practices.”

In the meantime, Con Edison has also asked the state for permission to increase its prices further—by 11% for electricity and 18% for gas. The roughly $1.7 billion in additional revenue would go to upgrading energy delivery systems, according to the company. 

However, the suffering is likely to continue for New Yorkers. “My utility bill literally doubled overnight,” Hector Ruiz, 44, a fiber-optic engineer who lives in Clifton Springs in upstate New York, told the Wall Street Journal.

“Has it been a punch to the gut?” he said. “Yes.”

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