New York Moves to Measure Utility Affordability in Future Rate Cases

New York is taking a new approach to evaluating electric and gas costs as part of an effort to keep rising utility bills from placing an excessive burden on households.

Governor Kathy Hochul announced that the New York State Public Service Commission has initiated a proceeding to establish a new Energy Affordability Index. The measure will be used to evaluate utility affordability across the state and will become part of the review process for future electric and gas rate cases.

The state’s goal is to keep household electric and gas expenses below a combined 6 percent of household income, with benchmarks of 3 percent for electricity and 3 percent for gas.

Under the new framework, each utility will be required to calculate an Affordability Index when submitting upcoming rate cases. If a utility exceeds the 6 percent affordability target, the Public Service Commission could appoint an independent Affordability Monitor to examine utility operations and spending and recommend ways to reduce costs.

The affordability measure also will be incorporated into performance incentives for utility executives and senior management, creating a direct connection between management decisions and affordability for customers.

For most utilities, the interim index will compare median annual residential electric or gas expenditures with State Median Income. For Con Edison and National Grid’s downstate service territories, Area Median Income will be used.

Utilities are required to make their first annual affordability filings by February 1, 2027. The Public Service Commission expects to issue its first statewide annual affordability report by July 1.