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New Yorkers Paying Through The Nose for Electricity

NYC Leaders Hold Press Conf. Urging New Iranian President To Carry Out Reforms

In case the highest-in-the-nation rents and exorbitant taxes weren’t enough, New York residents are also paying more for utilities than anyone in the country. Consolidated Edison (Con Ed) which supplies electricity to New York City, charges 25.65 cents per kilowatt hour for electricity, which is more than double the national average, the Wall Street Journal reports. Yet this isn’t simply a case of a greedy company bilking New York residents for all they’re worth: a full quarter of the high cost is due to taxes and fees levied by the city and state government.

Bill de Blasio was elected Mayor last week on the back of a campaign which spoke of “two New Yorks“: one of powerful Wall Street millionaires and another of struggling families living on the edge of poverty. Though this isn’t exactly wrong, it ignores the reason why the middle class has been fleeing the city. Taxes, thick layers of red tape, and expensive public services make life expensive in the Big Apple, but they also keep businesses away, which ultimately means fewer jobs that can sustain a thriving middle class. As a result, New York is increasingly becoming a city where only the super rich or those heavily dependent on government subsidies can afford to live.

[Bill de Blasio photo courtesy of Getty Images]

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  • Mark Michael

    As I read this, i had a knock on the door. It was the local electric utility sending a college student around to see if I would switch back to the unregulated subsidiary of the regulated utility for my electricity! Just a strange coincidence that I was reading about NYC’s ConEd charging 25.25 cents per KW- hour. I invited the student in and got my electric bills to compare rates. I switched to a 2nd supplier who charges me 7 cents per KW-hour. The local utility then charged me the equivalent of 5 cents per KW-hour for distribution costs, taxes, fees. My total bill is 12 cents per KW-hour. Switching back to the subsidiary that the local utility has set up would have saved me $7 per month once we multiplied it out, an 8% reduction. BUT, they required me to lock in a 4-year contract, which I’m not willing to do.

    So, Ohio is half the cost of NYC, but I suspect it could be lower if we ever get the shale natural gas fracking industry up and running. At this point it’s still all in exploration phase. No gas is being delivered to users yet.

    Ohio has slowly moved to decouple power generation from power distribution. The latter remains a regulated public utility and the generation is becoming deregulated and (hopefully) competitive. This applies to both electricity and natural gas. In theory a consumer can have 4 different companies supplying electricity and natural gas. It used to be just one in Dayton where I live: Dayton Power & Light (DP&L). Then a holding company was set up DPL Holdings, and the utility a subsidiary. Then the natural gas part was sold off to another company, Vectren in Dayton. It in turn, became a regulated utility and spun off its natural gas supplier function.

    It’s all pretty complicated at this point. Hopefully, over time, it will all settle out into well-understood markets.

    The student intern, btw, was very nice. Had an Apple iPad with all of the info on it he needed. We deciphered my bills together. If I had switched, they’d take care of all of the paperwork required to do the switch.

  • Fat_Man

    If you are paying $2500/mo. for a 350 sq. ft. apartment. The price of electricity is inconsequential.

    • Mark Michael

      Fat_Man, you’re right for that $2500/mo. rent, if you have to pay that much. 25.25 cents per KW-hour vs. 12 KW-hour that I pay in Dayton, Ohio, is a relatively inconsequential difference for the NYC apt. resident. Adds maybe $60 to $75 per month. Dayton is a heck of a lot cheaper than that. My apartment costs $642/mo. and the electric bill is $62/mo. for $704/mo. combined.

      The NYC yearly cost is ($2500 + $124 = $2624)/mo. x 12 months = $31,488 for a year.
      Dayton: yearly cost ($642 + $62)/mo. x 12 months = $8,448 for a year.

      Of course, the post is making a more general point beyond an individual’s residence costs to business costs, manufacturing costs, and (of course) their employees’ living costs must be factored in to that, too.

      Ohio has been attracting some manufacturing back to Ohio. Existing companies are choosing to expand in Ohio rather than overseas.

      BTW, that Dayton apartment rent + electric utility cost is for a 1,200 sq. ft, two-story, two-bedroom townhouse on the 2nd and 3rd floors of the building. It has a balcony on the 2nd floor. The rent includes the water bill + the use of an exercise room, a swimming pool, and a tennis court.

      The National Air Force Museum is about a half mile away and can be seen from the balcony (sort of thru the trees), which is the biggest tourist attraction in Ohio. The 4 surviving Jimmy Doolittle pilots/navigators gathered at the Museum Saturday, Nov. 8th. See the 11-11-2013 WSJ, page A6, “Final Toast for Doolittle Raiders – Veterans of Famed World War II Bomber Attack in the Pacific Meet to Salute Comrades” Dayton, Ohio — In 1942,…”

      I missed it! A friend walked over and watched the 4 B-25s fly in in formation. Said the formation was like how birds fly in formation. Did a fly-around I believe, then landed. She got an autograph I think she said.

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