First give relief. Then fix the problem that caused the need for relief.
That’s the way New York’s governor and Legislature should be looking at the state’s high energy prices.
On Thursday, the state Public Service Commission, which regulates utilities in New York, signed off on a $672 million plan to designed to help out ratepayers who accumulated debt on past-due utility bills due to the pandemic.
The program, for non-low-income residents and small businesses, offers a one-time credit on unpaid bills. It’s expected to help 478,000 residential customers and 56,000 small business.
Gov. Kathy Hochul is also supporting a proposal to provide $200 million to offset electric bills for 800,000 New Yorkers earning less than $75,000 a year and who don’t qualify for other discount programs. On top of that, last year, the state approved a $567 million bailout for low-income New Yorkers behind on their bills.
Wiping away some of the debt on old utility bills will help many New Yorkers catch up on their bills so they can continue to afford to heat and light their homes.
It’s a welcome benefit that specifically helps the lower- and middle classes get through a tough time.
But the assistance is only medicine to ease the pain.
It doesn’t address the causes of the pain – the state’s high energy prices. Without coming up with real solutions to bring down energy costs, New Yorkers will continue to struggle with this issue long after the relief funds dry up.
New Yorkers pay a high price for energy, although other states are higher. In terms of overall energy costs, New York ranks in the lower-middle of the country, with varying lists ranking it between around 30th to 40th. In terms of electricity costs, the state consistently ranks ninth or 10th in the country. New York City has the highest energy rates in the country.
Several reasons have been cited for the high costs.
First, the problem with rising costs this year isn’t limited to New York. The cost of energy across the country was up 13% in November 2022 from a year earlier. Colder temperatures and higher energy prices, particularly for natural gas, are also driving up costs everywhere.
For New York specifically, regulation and high state, local and sales taxes are blamed for much of the problem.
Another problem is regulatory policy, particularly one in which the state has vetoed expansion of pipelines that carry natural gas, stressing the distribution system and driving up prices.
The state’s older energy plants are inefficient, and some of the new ones can’t afford the gas needed to power them. The organizational structure of New York’s utilities is also often cited as another factor.
It’s good and right that the state help out overwhelmed residential and commercial users of energy to help them through tough times.
But until the state addresses the underlying contributors to the state’s high energy costs, New Yorkers will continue to struggle paying their bills.