No one expects city living to come cheap. But even as rents soar across the five boroughs and egg prices can top $10 per dozen, residents now face the prospect of another cost increase they can’t control: a jump in their electric bills.
Energy resources from Canada are now subject to Donald Trump’s tariffs. In response to those tariffs, Ontario said Tuesday it will impose 25% levies on power it sends to three states, including New York. Such costs would likely filter down to customers who already face potential rate hikes early next year from power provider Con Ed.
The utility wants state approval to raise electric bills 11.4%, starting Jan. 1, 2026. Natural gas bills would climb even more — 13.3% — if regulators agree. Con Edison says it needs the money to expand and strengthen the local power grid at a time when many new buildings use only electricity, not just for lights and appliances but for heating too.
The rate increases, combined with the potential impact of tariffs, would compound an affordability crisis that leaves many New Yorkers feeling helpless. They already pay, on average, higher prices for electricity than most Americans.
New York’s Public Utility Law Project, which helps customers understand their bills and apply for payment assistance, was fielding calls from panicked customers within hours of the tariff announcement Tuesday, said Laurie Wheelock, the nonprofit’s executive director and counsel. The threat of added costs comes just as New Yorkers are dealing with the higher monthly payments that come with winter heating.
“It’s caused a lot of anxiety,” Wheelock said of tariffs. “We’re all waiting to see what happens with the next cycle of bills.”
The levies are far from certain: US Commerce Secretary Howard Lutnick said late Tuesday that the administration could announce a pathway for tariff relief for Canada and Mexico. Representatives for Ontario Premier Rob Ford said he would only take action if the tariff situation wasn’t resolved in coming days.
The New York Independent System Operator, which operates the state’s power grid, said that the levies on Canadian electricity would likely amount to tens of millions of dollars a year. The grid operator also said there are “serious concerns” that tariffs on power would hurt reliability and wholesale electric markets.
New York imported about 6,600 gigawatt-hours of electricity from Canada in 2023, which was 4.4% of total electricity consumption in the state that year, according to Bloomberg calculations using data from the New York grid operator.
“If you’re going to increase the price of electricity, it’s going to increase the price that people see on their power bills,” said Marguerite Wells, executive director of the Alliance for Clean Energy New York, an advocacy group.
Rate Increases
Con Edison’s rate plan is part of a national trend. Utilities are moving to raise rates as growing electricity demand from data centers, factories and electric cars forces them to add expensive infrastructure. Hardening their grids against increasingly extreme weather — or fixing damage from big storms — also drives up costs at a time when consumers are also struggling with persistent inflation.
“This is a real hit on families,” New York Governor Kathy Hochul said at a press conference urging regulators to reject Con Edison’s proposal. “C’mon — how are they supposed to get ahead? This is intolerable to me.” In a February letter to the head of the state’s Public Service Commission, which sets utility rates, she said the company should “go back to the drawing board and find a better way.”
New York has long been one of the world’s most expensive cities, and the generation-high inflation that ravaged the US following the Covid-19 pandemic didn’t help. Consumer prices in the New York metropolitan area are up more than 20% since the start of 2020, according to the US Bureau of Labor Statistics. So far this year, inflation within the city is running at 4%, above the national average of 3%.
“When it comes to inflation, New Yorkers are going through the same thing everyone else is, only worse,” said Giacomo Santangelo, an economics professor at Fordham University. “Con Ed making an announcement that they’re going to increase costs only makes things worse.”
Utility regulators seldom turn down a rate-hike proposal outright, more often granting a portion of the requested increase. The balance they strike can have big consequences, both for the companies and their customers. Sempra shares, for example, suffered their biggest intraday drop ever last week after the company cut its earnings forecast, citing a decision by California regulators to limit its proposed bill increase.
In New York state, the Public Service Commission typically spends 11 months reviewing rate requests before deciding whether to approve, adjust or reject them. Con Edison’s proposal would increase the company’s annual electric delivery revenue by $1.6 billion and boost gas revenue by $440 million.
The proposal would fund an investment plan that would place more power lines underground to protect them from storms, expand the electric delivery system in places where fleets of trucks and cars are switching to EVs and add a substation in Queens to serve John F. Kennedy International Airport. In addition, about 27% of the requested increase in electricity revenue would cover rising property taxes on the company’s infrastructure.
More broadly, the transition to electricity for heating buildings and fueling transportation is driving increased demand, said Matthew Ketschke, president of Con Edison of New York. That includes a state law requiring new buildings under seven stories tall to eliminate gas hookups, starting in 2026.
“We have a responsibility to continually deliver safe and efficient, reliable energy to New York City and Westchester County and comply with all the state laws and regulations around energy policy,” Ketschke said. A Con Edison representative separately declined to comment on the tariffs or their potential impact on customer bills.
Since most utilities adjust their rates every six months based on wholesale power prices, consumers might not see the impact tariffs have on their bills until that next rate adjustment, energy consultancy Wood Mackenzie’s Devin Thomas said in an email. “If tariffs persist, though, the increased costs would eventually filter through,” he said.
Many Con Edison customers already can’t keep up with their bills. More than 439,000 residential customers are at least 60 days behind on payment, with arrears topping $904 million, according to the company’s collection activity report for January. Another 58,420 business customers are in arrears for $523 million.
“It’s pretty ugly!” Eddy Fernandez said, shaking his head and leaning back in a beige and grey barber chair. Fernandez, owner of Kike Barber Shop in Jackson Heights, said his shop’s last Con Edison bill of nearly $1,260 was one of the highest he’d ever seen. The bill landed as foot traffic in his neighborhood has dropped, with some undocumented residents fearing immigration raids following the inauguration of President Donald Trump, he said.
“Everyone is hiding,” said Fernandez, 54. “We cannot raise prices. Everything is increasing, and we cannot raise prices, because our competitors keep everything at the same price.” He said he’ll still be able to pay the power bill, even if it hurts.
Last October, Sergio Orlando Centeno entered into a two-year installment payment agreement with the utility company, triggered by a higher-than-expected bill. The 61-year-old cleaner in Jackson Heights keeps a full-time job at night and a part-time gig during the day — and still finds it difficult to make ends meet. “Eggs are very expensive, or meat or vegetables or everything,” he said.
But utility costs are pinching suburbanites as well, even before the proposed increase. Westchester County Realtor Whitney Okun said the monthly power bill for her 4,500-square-foot home recently rose from $700 to $1,200, a level she considers “insane.” Her house-buying clients ask about power bills and factor the amount into their monthly costs. “It’s alarming to me and scary financially for a lot of people,” she said.
Should the tariffs also come into play, the situation may only get worse. The levies could make Canadian power generators decide to sell their electricity domestically instead, said Wells of the Alliance for Clean Energy New York. That would force the New York grid to buy more expensive and dirtier replacement power from gas generators in New York and Pennsylvania.
“What is clear is that none of the scenarios involve power getting cheaper for New York City residents,” Wells said.
