In the summer of 2007, Con Edison residential bills reached an unprecedented spike. See Excelsior! Con Edison Residential Rates Spike (Again). By comparison, Rochester Gas and Electric, which unlike Con Edison did not sell most of its power plants and does not need to rely so heavily on deregulated wholesale markets to acquire energy has lower and steadier electric rates. Also, the PSC adopted rate stabilization plans for upstate utilities that have not allowed pass through of NYISO price spikes.
In January 2008, the typical Con Edison bills, as reported semi-annually by the New York Public Service Commission, also reached an all time winter high.In May 2008 FERC foreshadowed major price increases in the "organized markets" it has promoted, including the NYISO wholesale electricity spot markets. See NY City Wholesale Electricity Prices May Rise 89% Due to Market Design and Higher Natural Gas Prices. At the time, Con Edison said its customers would see a 13% increase this summer. Con Edison reportedly explained this away saying that "last summer was relatively cool, and that depressed wholesale power prices a bit as people used less air conditioning...." Yet the official PSC reports of the July 2007 prices, charted above by PULP, show that retail residential prices were higher than ever in that "relatively cool" summer.
On June 11, 2008 Con Edison adjusted upwards its energy rates. See Con Edison Electricity Rates for Energy Spike 21% in June. The energy rates do not include the monthly customer charge and the so-called "delivery" rates, so the total bill increase percentage in June would be less than the energy increase, and would vary based on the customer's consumption.
Later in June 2008, FERC revised upward its estimates of summer NYISO prices. See Summer NYISO Electricity Prices 123% Higher.
On July 11, 2008 Con Edison filed its monthly adjustments to previously filed residential rates for July, raising the rates for energy by more than 6.3 cents/kwh.
Bills for July for a customer using 500 kwh will be 30% higher than they were in May.
The PSC does not issue its reports on semi-annual typical bills until two months later. PULP has calculated the typical Con Edison bills issued in 2008 using the same format as the PSC reports (including energy, "delivery," taxes and surcharges for a residential customer in New York City using 500 kwh/month in each month). The chart below shows the PSC Report data through 2007 plus PULP's estimates of the Con Edison bills of this year to date. The August bill reflects the July price change:
Click on the chart to enlarge it.
By our calculation, Con Ed bills for July 2008 for a 500 kwh customer will be $157. They will be 30% higher than the May bills and at least 20% higher than last year's record July bill of $131 -- well above Con Edison's May estimate of 13%. Con Edison rates will change again in August.
The PSC allowed Con Edison to implement its system of unpredictable prices in 2000, denying a petition of PULP and AARP and their rehearing request.
Recent research shows that energy cost unpredictability creates serious difficulties for customers trying to manage their household budgets. Many households in New York live in poverty, without savings, from check to check, and often run out of money and Food Stamps before the end of the month. They will find it difficult to absorb these sudden and unreasonable Con Edison price changes that flow from the PSC's mistaken deregulation policies.