Your Next Electricity Bill Might Be Shocking

by | Mar 24, 2022 | Utilities

Reading Time: 3 minutes

Inflation is causing a cost increase in everything from groceries to gas, and if you haven’t already experienced it, the next bill to increase will likely be electricity.

In metropolises like New York City, lawmakers and utilities are at odds over who is to blame for rising costs. Is it the supply chain? Inflation? Renewable investments?

It’s not just New York; electricity prices skyrocketed 50% in Texas. The data shows rising costs across the country, and customers aren’t happy.

Consumers fed up with prices

In New York City, Andrea Lewis’ electricity bill more than tripled in one month. Her bill cost $163.73 in December and inflated to $512.07 by the end of January, according to THE CITY.

That $512 bill heats and powers a 1-bedroom apartment in Brooklyn. Lewis did use more electricity from December to January because of the colder temperatures—but only about double. So a bill costing three times more didn’t add up to her.

According to THE CITY, the delivery charge on Lewis’ bill went up about a penny per kilowatt-hour of energy use in January compared to December. Still, the supply charge increased threefold, from 6.6 cents per kilowatt-hour to 19.6 cents.

These problems aren’t exclusive to New York.

“When the prices changed, they didn’t change a little bit. Like literally a 25% difference than what they were six months ago,” PK Kiely, who lives in western Massachusetts, told 22 News. “It can be ridiculous.”

Whose fault are the rising electricity costs?

In New York, Con Edison doesn’t generate its own power. Instead, it buys energy from suppliers and delivers that power to consumers. As a result, the cost of power fluctuates, and Con Edison doesn’t set that price.

“Energy prices are volatile and can be affected by factors such as weather, demand, and economic trends,” Con Ed spokesperson Jamie McShane told THE CITY.

Con Edison did recently raise delivery prices, but by law, they can’t generate a profit from consumers.

“Neither the state nor the federal government sets commodity [supply] wholesale energy prices; that is a function of the global marketplace,” Public Service Commission spokesperson James Denn wrote in an email to THE CITY.

One factor the state and Con Edison must deal with is how to respond to climate-friendly policies that require energy providers to supply a certain amount of clean energy to consumers, but do so in a way that doesn’t make the consumers solely responsible for the rising costs.

Global factors, such as the Russian invasion of Ukraine and the sanctions placed on Russia as a result, are also increasing the price of oil, which hurts many energy providers.

How data can help utility companies and consumers

For unhappy consumers, looking at the data of usage, kilowatt-hour rate, and delivery charge, and then comparing it to the previous bill can help make sense of why a bill might be more. Then customers can assess where they might be using power extraneously, with devices being charged overnight unnecessarily, for example, or leaving lights on.

For utility companies, when delivery charges are increased, sending notices to customers about how this can affect their bill ahead of time can help temper some issues and reduce the rage of high bills.

When the cost of energy goes up, posting a notice on your website with transparent pricing can also help.

Meredith Galante
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