Con Edison Implements 3.5% Rate Hike — NYISO Capacity Market in Transition
Consolidated Edison implemented a multi-year rate plan approved by the New York Public Service Commission (PSC), resulting in an average 3.5% increase in electric delivery rates and a 4.4% increase in gas rates for 2026. Combined with existing NYISO capacity market charges — which have risen sharply following the retirement of Indian Point Units 2 and 3 — New York City commercial accounts are facing a projected all-in blended rate of 20.1¢/kWh by mid-2027, up from approximately 17.9¢ today.
The Case for the Increase
Con Edison's filing cites three primary cost drivers: grid hardening following Tropical Storm Ophelia (2025), electric vehicle charging infrastructure mandated under New York's Climate Leadership and Community Protection Act (CLCPA), and workforce and cybersecurity investments. The utility's proposed revenue requirement totals approximately $1.8 billion over the 3-year rate period.
Projected NYC Commercial Rate Stack (2027)
| Rate Component | Current (¢/kWh) | Projected 2027 (¢/kWh) |
|---|---|---|
| Energy Supply (NYISO Day-Ahead) | 6.4¢ | 6.8¢ |
| Capacity (NYISO NYC Zone) | 3.1¢ | 3.4¢ |
| Con Ed Delivery (Distribution) | 7.1¢ | 7.9¢ |
| Transmission (NYPA/Con Ed) | 1.3¢ | 2.0¢ |
| Total Blended (NYC C&I) | ~17.9¢ | ~20.1¢ |
Source: KilowattLogic analysis based on NY PSC Rate Case 26-E-0XXX and NYISO Capacity Market reports.
The CHPE Wildcard
The Champlain-Hudson Power Express (CHPE) — a 1,250 MW HVDC transmission line from Québec to Manhattan — is scheduled to energize in late 2026. Once operational, it will inject significant volumes of low-cost Canadian hydropower into NYISO Zone J (NYC), which could partially offset capacity market tightness. However, regulators caution that CHPE's impact on consumer bills will depend heavily on how Con Edison is permitted to allocate the cost savings under the new rate case structure.
- Best case: CHPE lowers Zone J LMPs by $8-15/MWh during peak hours, trimming 0.8-1.5¢/kWh from supply costs.
- Base case: Savings absorbed primarily by Con Ed's capital cost recovery, neutral net consumer impact.
- Worst case: Delays in CHPE commissioning leave NYC exposed to a tight capacity market through winter 2026/2027.
Lock In Before the NYC Rate Hike
With delivery rates rising 3.5% and supply costs volatile, a fixed-rate supply contract before the 2027 effective date is the most direct hedge for New York commercial accounts.