April showers bring May flowers and this year the first full month of spring is also bringing higher electric bills thanks to a new state surcharge.
The surcharge stems from an agreement made by Governor Cuomo and state regulators with failing upstate nuclear power plants. The funds will help to pay for operational and repair costs to keep the plants running until a “green” market can be established to meet electric demand.
Last August, the New York State Public Service Commission adopted the Clean Energy Standard (CES), a result of Governor Cuomo’s 2015 State Energy Plan. The goal of the plan is to have 50 percent of New York electricity generated by “renewable” resources by 2030.
“This is a statewide mandate,” says Steve Brady, manager of strategic communications at National Grid, regarding the surcharge. “All load-serving entities are required to participate,” he explains that a load-serving entity, as defined by the state, is any end supplier of electricity. “So it includes investor-owned utilities like National Grid, municipal utilities, NYPA and energy service companies.”
Brady says National Grid will apply the surcharge to the supply portion of a customer bill across all customer classes – residential, commercial and industrial. “It is a volumetric charge, meaning it is a cost per kilowatt-hour of usage,” he says. “The rate per kilowatt-hour is the same for all customers, but clearly the more a customer uses, the larger the impact on the bill.”
The rate may change annually, Brady explains, and early forecasts are that it could rise slightly in subsequent years. “I stress those are forecasts and therefore it is not certain the surcharge will rise,” he says. “Right now, we expect the impact for the typical residential user will be about two percent on the total bill, and three to five percent for most business customers.”
For National Grid customers, the surcharge will not appear as a separate line item, but instead will be included in an existing line item on the supply portion of the customer bill.
“We have a line item called the ESRM (Electric Supply Reconciliation Mechanism) that is used to calculate a number of items,” Brady says. “CES surcharges will be included in that. If a customer wants to know what the specific rate per kilowatt hour is, however, it can be found in our tariffs on our website.” He explains that a typical residential customer using 600 kWh per month would see an additional charge of $1.98 on the ESRM line. That figure includes the approximate 2017 CES surcharge rate.
Juanita Washington, corporate communications manager at Avangrid, says RG&E and NYSEG customers will see the surcharge included in the supply charge on retail customer bills.
“The incremental monthly cost to customers that purchase their supply from NYSEG or RG&E will vary depending on the customer’s usage level,” she says. “On average, a NYSEG residential customer using 600 kWh per month will experience a total monthly bill increase of $1.97, or approximately 2.3 percent.”
She says customers can learn more about the changes here: www.governor.ny.gov/news/governor-cuomo-announces-establishment-clean-energy-standard-mandates-50-percent-renewables.
The situation is the same for customers of local municipal electric companies. “The formula is multiplied by the consumption, the more you use, the larger the cost,” Village of Spencerport Municipal Electric Superintendent Owen McIntee says. “The process is very similar for the investor owned utilities.”
In a letter sent to Village of Spencerport residents, Mayor Gary Penders writes that the State Energy Plan is meant to reduce greenhouse gas emissions by 40 percent by 2030.
“Spencerport Municipal Electric is responsible for its proportional load share of the total amount paid to subsidize the nuclear power plant generators,” Mayor Penders writes. “This rate will be multiplied by your consumption monthly. Monies collected from the CES surcharge will be paid directly to the New York Municipal Power Agency.”
The Mayor explains that the order provides for two mandated requirements for
Spencerport Municipal Electric:
•A Renewable Energy Standard (RES) requirement, in the form of Renewable Energy Credits (RECs)
•A Zero Emissions Credit (ZEC) requirement.
The situation is the same in the Village of Churchville, says Mayor Nancy Steedman. She is the current president of the Municipal Electric Utilities Association (MEUA).
“CES requires all utilities to procure a quantity of Renewable Energy Credits (RECs) through NYMPA (New York Municipal Power Authority). CES also requires us to purchase Zero-Emissions Credits (ZEC’s) from NYSERDA,” a letter to Churchville Municipal Electric Customers states. “The ZECs are basically subsidies for upstate nuclear plants.”
Churchville customers will see the REC’s and ZEC’s in their April utility bill combined as “CES surcharge.” This will appear, “as a separate line item on your bill. They will not be included in the PPAC … (Purchased Power Adjustment Calculation),” the Churchville letter states.
