NYSEG: Natural gas prices impact supply portion of customers' bills

NYISO: As winter sets in, high natural gas prices are once again poised to drive up both heating bills and electricity costs across state

Avangrid Press Release

New York State Electric & Gas (NYSEG) and Rochester Gas and Electric (RG&E) continue to shine the light on rising supply costs this winter caused by factors outside of the utilities’ control, such as elevated natural gas prices and increased demand.

“Cold weather increases energy demand, and when natural gas prices are high, that impact is felt directly on customers’ electric and gas bills,” said Pat Fox, senior director of New York energy services for Avangrid. “Most of the electricity generated in New York relies on natural gas. When the cost of natural gas rises, even outside the state, it drives up wholesale electricity prices. This is a nationwide challenge, not unique to NYSEG and RG&E.”

Natural gas remains the dominant fuel source for electric generation across the Northeast. As gas prices have climbed over the past year, driven by weather-related demand spikes, growing consumption from data centers, and increased load from artificial intelligence technologies, electricity prices have followed suit. For example, on Jan. 30, residential customers in NYSEG’s eastern region who allow the company to purchase supply through the New York Independent System Operator Inc. (NYISO) paid approximately 15 cents per kilowatt-hour for supply, while those in the Western region paid 12.2 cents per kilowatt-hour. RG&E customers paid 12.5 cents per kilowatt hour. These figures are more than 44% higher for NYSEG customers and nearly 36% higher for RG&E customers compared to the same date in 2025. Customers may also purchase energy from an energy service company that sets its own rate.

In January, the NYISO explained that natural gas prices are the most significant driver of wholesale electricity costs. Colder-than-expected winter weather has increased heating demand and accelerated withdrawals from national gas storage inventories, tightening supply and pushing gas prices upward. Because wholesale electricity prices are closely tied to natural gas costs, these market pressures are passed through to utilities and ultimately appear on customers’ bills. The NYISO also released a video detailing what’s behind rising electricity prices in New York.

NYSEG and RG&E do not profit from supply costs; the companies are required to bill customers what the market charges, with no markup. To help reduce price volatility, the companies take steps to hedge supply costs where allowed, which smooths out some of the supply volatility on a customer’s bill.

Help is available for NYSEG and RG&E customers. All are encouraged to visit www.nyseg.com or www.rge.com to further understand their utility bill, how to better manage energy usage, and receive financial assistance or special services.