Understanding Your ConEd Commercial Bill
A NYC commercial electricity bill has two major components that move independently:
- Delivery Charges (ConEd, regulated): This covers transmission, distribution, system benefit charges, and infrastructure upgrades. ConEd’s multi-year rate plan approved by the NY PSC sets delivery increases at 3.5% in 2026, 3.2% in 2027, and 3.1% in 2028. These charges are the same whether you buy supply from ConEd or an ESCO.
- Supply Charges (competitive): This is the cost of the electricity commodity itself. If you stay on ConEd’s default supply, you pay a variable rate that tracks NYISO Zone J wholesale prices. If you switch to an ESCO, you can negotiate fixed-rate or indexed supply contracts that are often 10–18% below the utility default for large commercial accounts.
Why Zone J Costs More Than Anywhere Else
NYISO Zone J (NYC) is transmission-constrained. There is not enough transmission capacity to import cheap upstate power (Zones A-F, rich in hydro and wind) into the five boroughs. This creates:
- Locational pricing premium: Zone J wholesale LMPs averaged $100+/MWh during Q3 2025 peak periods, compared to $62/MWh in the upstate North Zone during the same quarter (Potomac Economics/NYISO).
- Gas dependency: Approximately 80% of Zone J generation is natural gas-fired, making prices highly sensitive to Transco Zone 6 basis. In winter 2024/25, Transco Z6 surged 120% year-over-year, from $2.10 to $4.64/MMBtu.
- Congestion costs: Congestion charges for power flowing into NYC can add $10–25/MWh on top of the base energy cost during peak hours.
The CHPE Factor: Will New Transmission Help?
The Champlain Hudson Power Express (CHPE) — a 339-mile HVDC cable from Québec to Astoria, Queens — is currently in testing and targets commercial operation by Q2 2026. If operational, CHPE will deliver 1,250 MW of Canadian hydropower directly into Zone J, potentially:
- Reducing Zone J congestion premiums by an estimated 8–12%
- Providing a hedge against winter gas-driven price spikes
- Supporting New York’s CLCPA clean energy mandates
However, CHPE alone does not eliminate Zone J’s structural constraint. Total in-city generation capacity remains below peak demand, meaning transmission bottlenecks will persist during extreme events.
Action Items for NYC Commercial Buyers
- Negotiate ESCO supply contracts now: ConEd’s 3.5% delivery increase is locked in — you cannot control that. But the supply component (typically 50–60% of your total bill) is competitive. A reverse-auction procurement process forces 5–10 ESCOs to compete for your volume.
- Consider dual-commodity (electric + gas): Bundled contracts across ConEd, National Grid, and Peoples Gas territories often unlock an additional 2–5% in volume discounts and simplify your billing.
- Monitor CHPE commercial operation: If CHPE achieves full output on schedule, Zone J pricing dynamics could shift in Q3–Q4 2026, making index-based contracts more attractive than locking a fixed rate today.
Connected Analysis
For CHPE project timeline, read our Champlain Hudson Power Express update. See how NY compares nationally in our 2026 commercial rate benchmark.
Source: EIA Electric Power Monthly (January 2026); NY PSC ConEd Rate Case Order; NYISO 2025 Annual Report; Potomac Economics NYISO State of the Market Q3 2025; ConEd published tariffs (coned.com).