As inflation rises, building owners across the country grapple with high electricity bills. Costly electricity puts even greater pressure on building owners preparing to finance electrification retrofits. The city’s local laws mandating carbon emission limits on residential buildings inevitably means many owners in New York City will have to electrify HVAC systems by converting to cold climate heat pump technology. High electricity costs will undoubtedly act as another financial hurdle for building owners who may already be struggling with the upfront costs of heat pump retrofitting.
It is important to understand that the current electricity pricing trends reflect the impact of several key factors. The war in Ukraine has disrupted the global supply chain for natural gas and oil, forcing utility companies to pay more for the fuels they need to burn to create electricity. Secondly, our electrical grid is outdated, the electrical grid is crumbling and currently cannot withstand the high demands of our carbon free future, a portion of rising costs reflect an effort to finance the restoration and improvement of the grid’s current capacity. Lastly, as climate change produces hotter summer months, our cooling appliances usually hike up the demand, resulting in larger bills. All of these factors combined are the reason why New York’s electricity pricing is up about 15% from last year. Read more about the country’s current energy dilemma here.
The aggressive building emission limits will increase the city’s electricity demand as more residential buildings will be converting to electric HVAC systems to avoid large fines. In order to prepare for the future electrical load in New York City, ConEd must modernize electrical transportation lines as well as holding stations. The state is slowly starting to generate more renewable energy from offshore and inland wind farms each year and you can keep up to date on the progress on NYSERDA’s clean energy standard page, but the city won’t have access to these renewable sources until the grid gets modernized equipping outer boroughs with the capability to transport and store this energy. The Reliable Clean City Project is allocating $800 million to ensure that NYC’s outer boroughs (Queens, Brooklyn and Staten Island) will soon be able to reap the benefits of clean energy capacity. All of these lines are expected to be completed by 2025, shortly after the 2024 initial phase in of LL97, you can read more about it each the specifications of the project and each line on the projects here and the projects info page.
As mentioned before the reason we are experiencing particularly high electricity bills in New York is due to the financing of these large-scale grid projects. In an attempt to lower the financial burden of rising utility costs, New York State Governor Katy Hochul recently signed the advanced Building Code, Appliance, Equipment Efficiency Standards Act ensuring $15 Billion in saved consumer utility costs till 2035. The law will also enforce new efficiency standards for electronic equipment, phasing out outdated and inefficient appliance standards. These new standards are expected to save New Yorkers $6 Billion in utility costs down the road as well, but that will not be enough.
The future of renewable generation for the city should mean cheaper electricity for consumers in the future, as renewable energy creation continuously lowers in cost and proves to be cheaper than fossil fuels. it will be interesting to monitor the timeline and growth of the city’s electric demand in the coming years alongside the implementation of stronger grid infrastructure, larger renewable generating capacity and the amount residential heat pumps installed. With the state’s and city’s ambitious climate act goals to reach large shares of renewable energy consumption in the coming decades paired with the Reliable Clean City energy project, city residents should be protected from soaring electricity bills in the future. However, this is all contingent on active and responsible policy management of the transition of utilities from fossil fuels to renewables. The cheaper price point should benefit the consumers, but only if utility companies are held accountable to price renewables fairly, a necessary step in assisting the financial burden placed on building owners in the coming years.
Brooklyn Home Management