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State faces test on electricity prices

By: Bill Sanderson |

New federal government data shows New York has a long way to go in its pursuit of affordable electricity prices.

Con Edison, the state’s biggest utility, charged the highest residential prices of any major U.S. utility company in 2013, according to figures released in February by the U.S. Energy Information Administration.

Con Ed’s average price of 26.99 cents per kilowatt hour to its 2.1 million residential customers was 122.7 percent above the U.S. average price of 12.12 cents.

“Many costs in the New York area are higher than the rest of the nation,” said Con Ed spokesman Allan Drury. “We strive to balance the need to invest in our system with our obligation to manage costs.”

Con Ed isn’t the only utility charging high rates.

The Long Island Power Authority in 2013 charged its 996,000 residential customers an average of 20.65 cents per kilowatt hour. That’s 70.3 percent above the national average, though still 23.5 percent less than what Con Ed charges.

National Grid’s 1.2 million upstate residential electric customers—the Public Service Commission nostalgically describes them as being in Niagara Mohawk territory—paid 14.18 cents per kilowatt hour in 2013, the feds say. That’s 16.9 percent more than the national average.

NYSEG, which serves 637,000 residential customers upstate, was the only major utility to charge residential customers less than the national average price. Its charges averaged 11.68 cents per kilowatt hour, about 3.6 percent below the average.

A number of small municipal utility companies charge even less. The Jamestown Board of Public Utilities—the state’s biggest municipal utility—charged its 16,763 residential customers an average 7.38 cents per kilowatt hour in 2013. Jamestown’s charge beat the national average by 39.1 percent.

This will be a busy year for electric rate setting at the state Public Service Commission. Con Edison, Orange & Rockland and Central Hudson have all filed rate cases. So has PSEGLong Island, which runs the power grid for the Long Island Power Authority. National Grid could file for new rates around May 1.

The rate cases come amid the P.S.C.’s Reforming the Energy Vision proceeding, which is aimed at changing how energy is produced, sold and marketed in the state.
Public Service Commission chairwoman Audrey Zibelman has said keeping prices affordable is “one of our major concerns and major obligations.”

The commission must “do everything we can to maintain the affordability of electricity,” Zibelman said at the commission’s Feb. 26 meeting. “It’s an essential service. It’s one that needs to be affordable.”

There’s evidence the commission could be doing more to hold rates down. The federal data shows that from 2009 to 2013, the electric utilities serving most New Yorkers raised prices at a faster rate than the national average.

AARP notes that New York’s average residential electricity prices are the second-highest in the nation, after Hawaii’s. The Reforming the Energy Vision proceeding won’t be worth much if it doesn’t lead to lower prices, said Bill Ferris, AARP’s top Albany lobbyist.

“At the end of the day, what our members are telling us is, ‘We can’t afford our bills. What are you doing to help me with that?’” Ferris said.

“The biggest concern they tell us about is affordability. It doesn’t matter where the electricity comes from. It doesn’t matter where the gas comes from. At the end of the day, people are sitting at their tables and saying, ‘How do I pay this bill?’”