National Grid Touts Record Usage as Staten Islanders Question Soaring Delivery Fees and PSC Oversight

New Yorkers shivered through a historically cold winter only to be heated out of house and home by ballooning utility delivery fees, a predicament with implications beyond the city’s thermostat wars.

In the week when Manhattan’s temperature struggled to climb above freezing, National Grid announced record gas consumption by New Yorkers. But in the homes of many in Staten Island, Brooklyn, and Queens, the cold was outdone by the financial chill induced by their latest heating bills. Even for residents who kept their radiators staunchly low, monthly statements arrived laden with delivery charges that swelled to double or triple what was spent on the fuel itself.

It turns out the “record usage” touted by National Grid on Monday was notable not simply for kilojoules burned, but for New Yorkers’ near-universal reaction: outrage. Interviewed customers, like Staten Island’s Rich Candia, are asking why delivery fees—typically an assumed marginal expense—now dwarf the cost of actual gas. “My delivery rate was 67% of the total bill,” Candia told reporters, after keeping his home at a bracing 50 to 55 degrees Fahrenheit. Many share his incredulity and sense of futility.

At the bottom of every bill, the fine print tells a complicated tale. Delivery charges are a catch-all for the costs of maintaining pipes, meters, infrastructure, taxes, service fees and a bevy of line items with cryptic names, such as “Delivery Rate Adj.” or the simple but unsatisfying “Basic Service Charge.” Customers insist the fees feel arbitrary, particularly when their own consumption is minimal. Among those hit hardest are seniors living on fixed incomes and working families for whom steep surcharges smother household budgets.

But the equations behind these bills are not set by National Grid in isolation. Power and gas rates are reviewed and approved by New York’s Public Service Commission (PSC), whose five members owe their seats to gubernatorial appointment and Senate confirmation. The most recent thumbs-up for a rate hike arrived courtesy of a three-year adjustment accepted in 2022, intended to help National Grid recover infrastructure investments and higher wholesale costs, while maintaining physical and financial reliability.

The PSC, for its part, contends that the surcharges are a necessary bulwark for system-wide upgrades. Gas pipelines, maintenance crews, meter replacement—these, regulators argue, are costly undertakings that ensure service runs smoothly regardless of demand or weather. Yet, for the end-user, this infrastructure logic is little consolation when a polar vortex compels both greater heat and greater cost. The fixed fees now appear to penalise thrift, imposing hefty delivery costs on even the most abstemious of thermostat-twiddlers.

The ramifications extend far beyond monthly quasi-decipherable statements. The burden of delivery fees widens the affordability gap, particularly in neighborhoods where incomes have barely budged since before the pandemic. With rental inflation and food prices still elevated, the specter of “energy poverty” looms. Residents unable to heat their homes adequately are at heightened risk of illness, a reality that stresses public hospitals and social services in a city already under fiscal strain.

Economically, a puny explanation does little to quell the growing sense that regulation serves the utility and not the consumer. Politically, the optics are awkward for state officials who campaign on cost-of-living issues and climate action alike. Critics of the PSC’s rate-setting methods call for more transparency—and perhaps more imaginative alternatives to the existing delivery charge stew. The city’s aggressive decarbonisation goals further complicate matters; penalizing gas consumption through fees risks embittering constituents needed for the diffusion of cleaner heating options.

The chilly paradox of progress

Nationally, New York’s quandary is hardly unique. American cities from Boston to Chicago have faced similar uprisings over arcane billing and hefty service charges. Internationally, however, nations such as France and Germany tend to bundle delivery and consumption costs in more straightforward terms, often with sliding subsidies to shield the vulnerable from winter’s vicissitudes. The US model, reliant on opaque surcharges and a labyrinth of regulatory oversight, too often obscures the true cost of staying warm.

Critics might argue it is ever thus in a metropolis of bureaucratic fragmentation and decaying infrastructure, where massive capital investments lag decades behind shifting demand. But that risks excusing what is, in effect, a system that dampens consumer trust and distorts incentives for both conservation and investment in cleaner technology. If each attempt to save energy results in higher per-therm delivery charges, the moral suasion of “lower your thermostat” rings increasingly hollow.

What is to be done? Greater clarity in billing, for one, would expose which costs are genuinely infrastructure-linked and which serve budgetary padding. A shift to more progressive rate structures, as trialed elsewhere, could protect low-use and low-income households from the brunt of volatility. Above all, New York’s PSC—and by extension, all utility overseers—might reckon with the fact that public confidence ultimately underpins their mandate.

New York abides winter with a customary stoicism, but consumers’ patience with runaway delivery charges is, like rapidly cooling apartments, finite. A society that wants residents to swap gas boilers for greener, pricier heat pumps cannot afford a regime where basic warmth begins to feel like a luxury. Time, perhaps, for policymakers and regulators to reconsider where the heat stops—and the burn begins. ■