ALBANY, N.Y. -- You may have noticed that your electricity and natural gas bill has gone up a bit. There's a reason for that.
Along with people using more electricity and natural gas to warm their homes during the recent and ongoing cold spells, the supply rates for utility bills also went up. According to figures from the New York Independent Service Operator (NYISO), from which utility companies including National Grid and New York State Electric & Gas (NYSEG) purchase their electric supplies, not only did the wholesale market price of electricity in New York state increase 53 percent from November to December, but the average price of natural gas statewide also increased significantly--46.5 percent--during the same time period.
"Since New York relies heavily on natural gas as a fuel to generate electricity, wholesale electric prices are very sensitive to the price of natural gas," according to a statement released by NYISO. "Natural gas prices have been up over the past year."
In 2013, there was a 54 percent increase in the average cost of natural gas compared with 2012, and a 30 percent year-to-year increase in the wholesale price of electricity.
Since the electricity-generating facilities in the state mainly utilize natural gas to power the sites, these natural gas prices, in turn, are affecting the bottom line in people's utility bills.
Jennifer from Watervliet, who did not want to give her last name, said she noticed that her bills had increased the past two months for her one bedroom apartment with a den.
"Ours went up like crazy and I've seen so many other people complaining about it as well," she said. "It's insane. I feel bad that people are about to get their power shut off and can't afford food."
This increase in the market cost of natural gas in the winter months is not unusual, and the markets experienced similar price increases in January 2011 and 2013, according to NYISO. In contrast, the winter of 2012 was relatively mild, which eased the demand for natural gas, and kept prices low.
Direct natural gas prices for consumers, meanwhile, have not increased as much, since some of that supply was stored by utility companies, like National Grid, from when natural gas prices were cheaper. Electricity, on the other hand, cannot be stored as easily, explained National Grid spokesman Patrick Stella. He noted that delivery rates for National Grid have decreased 10 percent since April as some charges collected to reimburse previous costs had been paid and the company wanted to help stabilize the costs. While delivery rates, which include storm response costs, infrastructure and funding collected for energy efficiency programs implemented by NYSERDA, will remain stable for electricity service until 2016, they will increase over the next two years for gas service.
Stella emphasized that National Grid offers a budget billing program so there are no spikes in bills from month to month, and that customers who are interested in that or other repayment programs should speak with a representative by calling 1-800-642-4272.
Wholesale, on-peak electricity prices were up across the nation from 2012 to 2013, driven largely by increases in spot natural gas prices. Percentage increases in power prices were highest in the Pacific Northwest and New England, based on regional supply and demand issues in those markets, according to the U.S. Energy Information Administration.