Utility Costs in WNY
By: Brett Williams
Buffalo and Western New York are known across the country for having some of the most affordable housing in the United States. Home prices and rents may be better than in most regions, but utility rates are a different story. Evidence suggests increasing rates over the years, but at first glance, it appears mixed. A deep dive into the issue shows that energy rates in WNY are above the national average, and they’re on their way up.
According to Syracuse.com, electric rates in Upstate NY were down 21 percent in 2016, the lowest rates in 10 years. Overall energy use per household leveled off since 2007, so this has translated into real dollar savings for consumers. Commercial electricity rates have gone down 51 percent since 2007, meaning electricity rate savings have disproportionately benefitted the business community over residential consumers.
Despite national Grid’s recent supply rate increases, National Grid requested permission to increase delivery rates (electricity bills have delivery charges and supply charges, customers pay for gas to be delivered and they also pay for the gas they use) to a total of $326 million. This would result in 10 percent increases in energy bills. By August, the $326 million ask became $331 million. Steve Brady, a national Grid spokesman, said “the extra $331 million is critical to keep National Grid updated with the latest technology. Some of its largest industrial customers have increasingly sophisticated needs and may be at risk if the
company cannot fund improvements.”
New York State Electric and Gas (NYSEG), the other major electricity provider in Western New York, began increasing their rates in 2016. “NYSEG customers would see monthly increases in the electricity delivery charge that would reach $5.75 a month by July 2018, and increases in the gas delivery charge totaling $9.57 a month by that time,” wrote a WGRZ staff writer in June of 2016.
Electric rates in Western New York may be under the national average, but gas rates are a whole different matter. According to the Denver Post in October of 2016, Buffalo has among the highest heating costs in all of the United States. Energy bills in Denver run around $1,300, whereas annual electric/gas rates run around $3,000 in Buffalo. Buffalo’s energy costs as a percentage of annual housing costs come out to 46 percent among the highest in the country. It’s worth noting that Buffalo has some of the most affordable housing. Despite that, Buffalo was fifth highest in energy costs of the 71 cities listed by the Denver Post.
On the topic of rate increases, National fuel customers are looking at an increase as well. According to National Fuel, via wallethub.com, “The average National Fuel residential customer will expect to see about $1.10 per month increase, totaling about $13 for the year.” This is happening in an environment where NYS natural gas rates are already the third-highest in the country.
National Grid has an affordability program where some money collected from utility bills is set aside to help fixed and low-income customers cover the costs of their bills. National Grid proposed to cover as many as 50,000 additional customers with the program. In essence, residential customers are being asked to cover most of the costs associated with upgrading infrastructure needed primarily for industrial and commercial customers. A portion of the rate increase revenue will be put aside to help those who ask for assistance.
Besides the Program from National Grid and other direct assistance from utility companies, the Home Energy Assistance Program (HEAP) has programs to assist low-income customers pay their energy bills. Eligibility is based on income, household size, the heating source, and number of people your household. For example, households with children under 6, individuals 60+, or disabled individuals more easily qualify for these benefits than others.
HEAP offers emergency benefits and repair benefits, in addition to regular benefits. Thousands of Western New Yorkers take advantage of these benefits each year. Even though these programs help reduce energy costs for a significant number of people, there are many with limited incomes who absorb the costs of their utility bills without public assistance. The assistance with paying utility bills isn’t a solution for their costs.
Over the last 12 months, my personal electricity rates (I’m a resident of the Buffalo/WNY region) have increased from 0.106 per Killowatt hour to .1205 per kilowatt hour. Assuming 400 kWh of energy usage each month, my supply charges rose $5.80 per month for the current year over last year. Delivery charges stayed about even, with a less than $1.00 per month increase.
In the coming years, as we transition to renewable forms of energy, there will be a need for infrastructure transitions and upgrades. This need will only require more frequent conversations over rate increases.