New York’s energy policy is burning a hole in your wallet

Ask Halston Media readers with electric heat their biggest gripe, and their skyrocketing electric bill is the likely answer.

Cold weather blanketing our region since December and the electric bills that follow have them steaming.

A major cause of the skyrocketing bills is weather. It has thus far been an extraordinarily cold winter, so more kilowatt hours (KWHs) of power are needed to heat homes. Since many major electric providers, locally and nationally, including ConEd and NYSEG, rely on natural gas for a majority of their electricity generation, and record cold weather has blanketed much of the country, unprecedented demand for natural gas has driven up its cost.

In Somers, many Heritage Hills residents in particular have suffered especially great “gas pain” due to their units’ unusual heating system design – radiant heating panels above the ceiling. I’m no engineer, but since heat rises, locating heating panels above the ceiling surely results in inefficient power usage.

As a Heritage Hills resident myself, but fortunate to spend the coldest winter months as a Florida snowbird, I was shocked by my own NYSEG electric bills. It was over $1,100 for December, while we were still in Somers, but almost $900 for January, while we were in Florida and all our Somers thermostats were set at just 53 degrees.

For perspective, our Florida monthly electric bills have remained consistently below $100 year-round. Our two homes are both one-floor units with similar square footage. While our Florida A/C needs are modest during the winter months, the A/C runs year-round, with the thermostat set at 77 degrees while we are back in Somers during Florida’s tropical heat months.

The shock over those comparisons moved me to compare the details of our electric bills in Somers versus Florida. Both companies break their prices into two major cost categories:

1. Delivery, including the cost of all the infrastructure (the transmission equipment and all the poles, conduits, cables, and wires to reach your home), along with an upcharge to provide shareholders with a return on system investment, charged per kwh, so that the heaviest users pay their fair share;

2. A supply/fuel charge to cover the cost of the fuel, other power sources (e.g. nuclear, solar, and hydro), and power purchased from the broader regional grid. NYSEG and ConEd state that they provides that power at cost with no profit.

The delivery charge per kwh, which varies month-to-month, has been quite similar in the two locations. On the other hand, the supply/fuel charge per kwh, which varies significantly by season in New York but not in Florida, has been dramatically different between the two.

Our average fuel/supply rate per KWH over the past 13 months through January, weighting each month evenly rather than weighting by the monthly number of KWHs, is 2.4 cents from Florida Power & Light (FP&L) versus 11.0 cents from NYSEG. While FPL’s supply/fuel rate was a consistent 2.4-2.5 cents per kwh throughout 2025 (it increased to 2.9 cents per kwh in January), NYSEG’s monthly supply/fuel rate per kwh over the past 13 months ranged from 7.8 cents last April up to 20.2 cents this January, when KWH usage was at its peak for those suffering through the record-breaking cold.

With natural gas the majority source of power for NYSEG, ConEd, and FP&L (57% for NYSEG, 88% for ConEd, 70-75% for FP&L per websites for all three), with nuclear a distant second in importance for all three, why is NYSEG’s supply/fuel charge (and apparently ConEd’s too) so dramatically higher?

A big reason is that while the Marcellus Shale underlies a significant portion of the Southern Tier and Finger Lakes regions in New York State with its vast natural gas reserves, New York has banned high-volume hydraulic fracturing (fracking). Further, New York State has actively restricted natural gas infrastructure expansion, denying permits for major interstate pipelines directly from Pennsylvania’s vast reserves.

Rather than taking advantage of that regional potential, New York State sources its natural gas largely from more costly long-distance (e.g. Gulf region), high-pressure interstate pipelines, utilizing compressor stations to maintain pressure, underground storage facilities to manage demand, and, in some cases, liquefied natural gas (LNG) terminals to store or re-gasify the supply.

In addition, a portion of New York’s natural gas needs are transported as LNG by truck or by shipping vessels that must follow a circuitous route to comply with an arcane law, the Jones Act of 1920. That law requires ships transporting goods between U.S. ports to be U.S.-built, -owned, and -crewed, and there are currently no functional, large-scale Jones Act-compliant LNG carriers.

This leads to LNG being shipped from the Gulf Coast to international destinations and then imported into the Northeast, rather than being moved directly by sea between U.S. ports, at considerable cost. The other alternative is to truck LNG from the Gulf to the Northeast, also at considerable additional cost versus direct port-to-port shipping.

In summary, local electric providers such as NYSEG and ConEd are forced to secure their primary energy source, natural gas, through significantly more costly means than cost efficient pipelines from Marcellus Shale reserves either right in New York State or from neighboring Pennsylvania.

While a less significant power source for NYSEG and ConEd is hydropower electricity imported from Canada, tariffs on that source have driven up its cost as well.

To be clear, NYSEG and ConEd both use financial tools like hedging and forward contracts to manage the volatility of natural gas prices and minimize the impact of price hikes on customers. These companies also utilize storage facilities to help manage supply and demand during peak winter periods in a further effort to mitigate price volatility. But given the longer-term trend to higher temperatures, neither company could anticipate the extraordinary cold that has blanketed our region as well as much of the U.S. this winter, driving up the cost of natural gas so dramatically.

Ken Freeman is a resident of Heritage Hills in Somers.