New York commercial energy: zones and choice

New York is not one market; it is eleven wholesale zones

The New York Independent System Operator runs the state's bulk power system as a single control area divided into eleven load zones, labelled A through K. Zones A to F run west to the Capital Region and are generally closer to upstate generation; zones G to K are the load-concentrated downstate system, where Zone J is New York City and Zone K is Long Island. The two are priced differently because they are physically different, not because a regulator chose to favour one. New York also restructured: the utilities largely divested their generation and, as regulated delivery companies, generally cannot build new generation, so supply is bought through competitive wholesale markets while delivery stays a regulated monopoly. For a business the split is the whole story of what it can shop. The commodity and capacity exposure inside a supply quote are set by the zone the meter sits in; the distribution, demand and surcharge lines come from the utility's filed tariff and do not move when the supplier changes.

• NYISO prices wholesale power across eleven load zones, A to K.
• Zones A-F are upstate; zones G-K are the downstate system.
• New York's utilities largely divested their generation.
• Supply is competitive; delivery stays a regulated monopoly.
• The zone sets the supply exposure; the tariff sets delivery.

The six investor-owned utilities, and who each one serves

Six investor-owned utilities deliver electricity in New York, and each one is a separate delivery monopoly with its own tariff. Consolidated Edison Company of New York serves New York City and Westchester County. Niagara Mohawk, doing business as National Grid, serves a large upstate territory. New York State Electric & Gas and Rochester Gas & Electric cover other upstate regions, Central Hudson Gas & Electric serves the mid-Hudson Valley, and Orange & Rockland Utilities serves Orange, Rockland and parts of Sullivan counties. All six permit eligible commercial customers to buy supply from an energy service company while the utility continues delivery, distribution, outage response and billing. That universality is the limit of the promise, though: it describes investor-owned territory only. Long Island's grid belongs to the Long Island Power Authority, a public authority with its own programme, and a business inside a village or municipal system is on that system's rates with no competitive supply to compare at all.

• Con Edison serves New York City and Westchester County.
• National Grid (Niagara Mohawk) serves a large upstate territory.
• NYSEG, RG&E, Central Hudson and Orange & Rockland cover the rest.
• Each utility keeps delivery and billing whichever supplier you use.
• Long Island and municipal systems sit outside the six.

Why Zone J, New York City, carries costs you cannot shop away

Zone J is not just the biggest load pocket in the state; it is the one with a local capacity requirement. The New York Independent System Operator calculates each load-serving entity's capacity obligation from forecast peak load and an applicable installed-reserve margin, and for New York City that obligation is met substantially with capacity located in or deliverable to the city, separate from the statewide requirement. The practical effect is that electricity serving the city cannot be priced as cheap upstate generation plus ordinary transmission. When the lines feeding the city are constrained, the system relies more heavily on higher-cost generation and the locational energy price rises. The two interfaces that matter most are Millwood, Zone H, and Dunwoodie, Zone I, which sit just north of the city and feed it. Congestion at those interfaces separates the downstate price from the upstate one, which is why a fixed-price offer for a city account can exceed an offer for the same annual usage in Zone C, E or F even from the same supplier.

• Zone J carries a local capacity requirement beyond the statewide one.
• NYISO builds obligations from forecast peak load and a reserve margin.
• Millwood (H) and Dunwoodie (I) are the interfaces feeding the city.
• Congestion at those interfaces lifts the downstate energy price.
• A city quote can exceed an upstate quote for identical usage.

What a New York commercial bill actually contains

A New York electric bill splits into supply and delivery, and the two answer different questions. Con Edison describes its full-service supply charge as the Market Supply Charge, which is the underlying commodity cost, plus a Merchant Function Charge, which recovers the utility's cost of procuring supply and of billing, credit, collections and uncollectible supply-related accounts, plus a Clean Energy Standard Supply Surcharge, plus gross-receipts taxes and other supply surcharges. Delivery is the other major portion: the regulated distribution system, customer and demand charges, delivery-related surcharges and state programs. The distinction matters because of what does not move. Demand charges remain utility delivery charges even when the customer buys supply from an energy service company, so a switch replaces the supply lines and leaves every delivery and demand line exactly where it was. Reading a New York bill means separating the two before deciding whether a supplier offer is actually cheaper than the utility's own supply.

• Con Edison full-service supply is MSC plus MFC plus CESS plus taxes.
• The Merchant Function Charge recovers procurement, billing and credit costs.
• Delivery holds distribution, customer and demand charges.
• Demand charges stay with the utility even on an ESCO supply contract.
• Separate the two sides before comparing an offer.

Con Edison's service classes and the demand trigger that moves you

Which Con Edison rate a business sits on is decided by metered demand, not by revenue or headcount. Service Classification 1 is the residential rate. SC-2 is general small commercial and industrial service. SC-9 is general large commercial and industrial service, billed on demand. SC-13 is standby service for accounts with on-site generation or an alternative supply arrangement. The line between the two general classes is stated: Con Edison's tariff provides that when SC-2 metered use exceeds ten kilowatts of maximum demand in two consecutive months, the account is thereafter billed under the appropriate service classification, and an SC-9 account may return to SC-2 when maximum demand has not exceeded five kilowatts for twelve consecutive months. Standby service is a separate arrangement again. The reason to check is that the classification follows the meter's demand history, so a business that grew into a demand-billed class can still be compared on the terms of the class it is actually in.

• SC-2 is general small commercial; SC-9 is general large and demand-billed.
• SC-13 is standby for accounts with on-site generation.
• SC-2 above 10 kW for two consecutive months moves to a demand class.
• SC-9 returns to SC-2 after twelve months at or below 5 kW.
• Identify the account by its actual classification, not by being a business.

The Clean Energy Standard, Tier 4 and VDER

New York recovers its clean-energy policy through rates rather than through a single line labelled for the climate law. On the supply side there is the Clean Energy Standard Supply Surcharge; on the delivery side a Systems Benefit Charge funds energy efficiency, low-income assistance and research programs. The state's Clean Energy Standard is docketed at the Public Service Commission as Case 15-E-0302, and it includes Tier 4, a mechanism for large-scale renewable resources that deliver into Zone J, including the Champlain Hudson Power Express transmission project. Under Tier 4, renewable energy certificates are procured and each load-serving entity, including the utilities, buys them in proportion to its share of statewide load, recovering the cost through approved rates rather than invoicing the customer directly. VDER is a different thing entirely: the Value of Distributed Energy Resources tariff compensates eligible distributed resources such as solar and storage for exports by energy, capacity, environmental, demand-reduction and locational value. It is a compensation tariff for generators, not a surcharge on every commercial account.

• The Clean Energy Standard Supply Surcharge sits on the supply side.
• The Systems Benefit Charge funds efficiency and low-income programs.
• The Clean Energy Standard is docketed as PSC Case 15-E-0302.
• Tier 4 buys renewable certificates into Zone J, recovered through rates.
• VDER compensates eligible distributed-resource exports; it is not a surcharge.

Steam, gas and the rest of the building load

Electricity is not the only energy a New York building buys, and Con Edison sells more than one of them. In parts of Manhattan it provides district steam under a separate steam tariff, measured in pounds of steam, with its own service charges, demand provisions, adjustment clauses and taxes. Steam is not an electric delivery charge, and it does not sit on the electric rate schedule, even when both services appear on one consolidated Con Edison account. Gas is a third, separate decision. In the city it is delivered by Con Edison or National Grid; upstate it is National Grid, NYSEG or RG&E, Central Hudson, or National Fuel Gas. New York gas choice runs on its own rules and its own enrolled-transportation mechanics, which are covered on the natural gas pages. The point for a commercial buyer is that a building's energy spend is up to three procurement questions, and an electricity contract answers only the first of them.

• Con Edison provides district steam in parts of Manhattan.
• Steam is a separate tariff, measured in pounds of steam.
• Steam is not an electric delivery charge.
• Gas is a separate decision with its own delivery companies.
• A building's energy spend can be three separate procurement questions.

What a New York business gets if it chooses nothing, and what to gather

A business that does not shop is on the utility's default supply, which is not a fixed rate: it is a market-based charge that resets on the utility's own calendar and carries the Market Supply Charge, the Merchant Function Charge, the clean energy supply surcharge and taxes. An energy service company offer cannot be ranked against that by comparing advertised per-kilowatt-hour figures alone. Normalise the commodity, the utility supply-side charges the offer does or does not replace, the clean-energy riders, taxes, any monthly fee, the term and renewal and termination clauses, the renewable content, and whether the price covers all usage or a block. New York also regulates the seller: Public Service Law section 66-t requires an energy broker or consultant to register with the Public Service Commission and to disclose the form and amount of its compensation. Municipal Community Choice Aggregation remains under review at the Commission under Matter 14-M-0224, and even where it operates it changes supply, not delivery. Before asking for offers, gather twelve months of interval data, the service classification, the account and meter numbers, the current supply position with its end date and notice period, and your load factor. One eligibility caveat applies to every energy page on this site: competitive supply depends on the service address, the meter and the utility territory, and municipal utilities, cooperatives and some jurisdictions have no choice at all. HighGround may receive compensation from providers on completed purchases, and an inquiry places no order and switches no supplier.

• Default supply is market-based and resets on the utility's calendar.
• Normalise every charge before comparing an offer with default supply.
• PSL section 66-t requires brokers and consultants to register and disclose.
• Community Choice Aggregation is under review as Matter 14-M-0224.
• Gather twelve months of interval data and your service classification first.
• Eligibility depends on the service address, meter and utility territory.
• An inquiry places no order and switches no supplier.

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