Electric utility bills have exploded in New York: As of May, the average monthly residential rate had jumped 13% over the previous year, and a whopping 54% since May 2019.
Headline-hungry politicians have found the culprit: the utility companies.
Press releases excoriate greedy executives and their heartless shareholders: Why, these rascals even installed special machines in our homes to decide how much to charge us!
It turns out, though, that Albany pols aren’t just using the utilities as a fall guy for their political theater.
They’ve also pressed them into service as state government’s bagmen, collecting for various climate programs that we’d otherwise recognize as tax hikes.
The black cables go back to the electric company, but the trail of green leads straight to the state Capitol.
Decades ago, monthly electricity bills were based on your usage and two added factors.
The first was supply cost: Electricity is a commodity sold on a competitive wholesale market, where its price fluctuates based on supply and demand.
About half of New York’s electricity is generated with natural gas, so fluctuations in gas prices translate into electricity-price changes.
The second factor is the utility company’s charge for delivering that electricity.
These rates are tightly regulated by the state Public Service Commission, which requires gas, electric and water companies to account for literally every dollar they collect from ratepayers, and every dollar they spend.
The PSC then sets the profit they’re allowed to keep, decided by a formula.
But, as state officials discovered in the 1990s, that utility-bill system is a fabulous way to tax electricity customers without taking the blame.
Utility companies had no choice but to play along.
Hellbound and Down 