New York Electricity Rates: Where the Money Goes
New York electricity bills are split into two components: Supply (the commodity cost of electrons) and Delivery (the wires, substations, and grid operations run by your utility). In New York City, ConEd controls delivery. Here is the current breakdown:
| Component | ¢/kWh | % of Typical Bill |
|---|---|---|
| Supply (ESCO / Utility Default) | 8.5–12.5¢ | ~38% |
| Delivery (ConEd) | 12.8–14.2¢ | ~52% |
| Taxes & Surcharges | 2.0–3.0¢ | ~10% |
The critical insight: delivery charges are non-bypassable. Even customers who shop for competitive supply via an ESCO still pay ConEd’s full delivery tariff. The 3.5% delivery increase approved in the January 2026 rate order (NY PSC Case 22-E-0064) adds roughly $4.50/month to a 750 kWh residential bill.
NYISO Zone J: Wholesale Market Pressure
Zone J (NYC) wholesale day-ahead LMPs have averaged $58.40/MWh in Q1 2026, up 14% from Q1 2025. Key structural drivers:
- Generation retirements: 4,315 MW retired vs. only 2,274 MW added since 2019 — a 2:1 deficit documented in NYISO’s supply crisis white paper.
- Summer shortfall: NYISO projects a 650 MW capacity shortfall for Summer 2026 after Empire Wind and Sunrise Wind stalled.
- Gas dependency: Natural gas sets the marginal clearing price in Zone J for 85%+ of hours. With Transco Z6 at $5.41/MMBtu, every $1 increase in gas adds ~$7/MWh to wholesale electricity.
Natural Gas: The Pipeline Problem
While Henry Hub sits at $3.82/MMBtu nationally, New York’s delivered gas costs are structurally higher due to pipeline bottlenecks:
| Hub | $/MMBtu | Premium vs Henry Hub |
|---|---|---|
| Henry Hub (National) | $3.82 | — |
| Transco Zone 6 (NYC) | $5.41 | +42% |
| Algonquin Citygate (NE) | $6.18 | +62% |
For average residential natural gas bills in New York, this basis differential translates to $15–25/month more than a comparable household in Pennsylvania or Ohio, even before local utility delivery surcharges are factored in. National Grid’s pending rate case (NY PSC Case 23-G-0225) proposes an additional 4.2% gas delivery increase effective mid-2026.
Commercial Buyer Action Items
- Lock ESCO supply now: Q3/Q4 2026 forward curves in NYISO Zone J are in contango. Fix 12–24 month electricity supply contracts before summer peak pricing sets in.
- Demand response enrollment: NYISO Zone J capacity prices cleared at $17.89/kW-month. Combined with ConEd’s DLRP incentives, commercial sites can earn $150–250/kW/year by curtailing during system peaks. See Zone K DR enrollment guide.
- Gas procurement: Negotiate indexed supply tied to Henry Hub rather than Transco Z6 if your distribution utility allows it. The $1.59/MMBtu basis differential is pure margin for suppliers selling at local hub pricing.
- Audit delivery charges: Verify your ConEd service classification. Many commercial customers remain on SC-9 (general large) when SC-4 (time-of-use) would be cheaper for day-shift operations.
Source: EIA Electric Power Monthly data available at publication; current-status update uses EIA February 2026 Table 5.6.A released April 23, 2026; NY PSC Case 22-E-0064; NYISO Day-Ahead Market Reports.