News Summary
The New York State Assembly Energy Committee held a hearing to discuss the escalating energy costs impacting utility customers. The report by Climate and Community Institute indicates that rising expenses are primarily due to the strain on the electric grid from AI and cryptocurrency data centers. Currently, about one in four New Yorkers struggle to pay their bills. Assemblymember Barrett proposed the Accountable Costs for Data Center Act to better manage costs from large consumers. The hearing highlighted the urgent need for reforms in the energy model to ensure affordability and protect communities from financial strain.
New York – The New York State Assembly Energy Committee convened a hearing on October 24, 2025, to address the escalating energy costs facing everyday utility customers. These rising costs are increasingly attributed to the demands placed on the electric grid by new consumers, particularly artificial intelligence and cryptocurrency data centers.
A comprehensive report by the Climate and Community Institute and Public Grids has indicated that the current design of electricity rates prioritizes private profits over the need for universal public service, which has contributed to the surge in utility bills. The New York Independent System Operator (NYISO) estimates that by 2030, the state could face a shortfall of approximately 1,600 megawatts of power due to the growing demand from these large-scale consumers.
Currently, NYISO has 36 projects in its interconnection queue, which could potentially add over 10,000 megawatts of new demand. National Grid is assessing ten active requests for new demand totaling 2.28 gigawatts, comprising around 65% from manufacturing or industrial projects and 35% from data centers. Alarmingly, approximately one in four New Yorkers finds it challenging to pay their utility bills.
Recent developments, including a federal government shutdown, have also begun to impact New York’s access to essential financial support programs such as SNAP and LIHEAP. In response to these pressing concerns, there are calls for a ban on utility shutoffs to protect New Yorkers from high energy costs while underlying grid issues are addressed.
Utility representatives have stated that large new loads need to contribute to infrastructure costs to avoid passing these expenses onto residential customers. However, some advocates have criticized the “beneficiary pays” principle, arguing that costs associated with new infrastructure and rising wholesale prices still adversely impact ratepayers.
Assemblymember Didi Barrett highlighted a troubling trend where ratepayers in some states absorb over 91% of the associated costs from large energy consumers like data centers. To combat this issue, Barrett has proposed the Accountable Costs for Data Center Act, which seeks to create a new classification for sizable energy users.
Republican Assemblymember Phil Palmesano has raised concerns regarding utility companies collecting funds for green energy mandates, emphasizing the need for transparency in cost breakdowns. The Public Service Commission (PSC) and state agencies may need to disclose how much of the utility bills come from such surcharges.
Environmental justice advocates have warned that the escalating demand for energy could lead to increased reliance on polluting power plants, with a disproportionate impact on vulnerable communities. The findings suggest a need for a reassessment of the current utility model. A potential transition to public power could help prioritize affordable electricity as a public good rather than simply maximizing profits.
The stark wealth inequality in New York is evident, with the wealthiest households holding $6.7 trillion, while lower-income households face a significant energy burden. As of December 2024, more than 1.3 million New York households had overdue utility bills, collectively owing over $1.8 billion.
The report raises concerns regarding the compatibility of the ambitious goals set by the Climate Leadership and Community Protection Act (CLCPA) with the need to ensure affordability of energy for residents. Advocates recommend establishing a dedicated technical panel for large energy users in every rate case to closely monitor their contributions and impact on costs.
The New York power grid is under strain due to an aging fleet of power plants and rapid increases in demand driven by large energy consumers that exceed new construction capabilities. Interestingly, data centers have the flexibility to significantly reduce their power consumption during peak grid strain, which could play a vital role in managing overall energy demand.
In summary, as New York grapples with the challenges of rising utility costs, the Assembly Committee’s hearing highlights the multifaceted issues at play, necessitating an urgent evaluation of the current energy model and potential reforms to ensure affordable energy for all residents.
Deeper Dive: News & Info About This Topic
- Times Union: Utility Profits Impact Energy Bills
- CBS 6 Albany: New Yorkers Face Rising Energy Bills
- River Reporter: New York Cannot Afford Albany’s Energy Plan
- NNY 360: Why New Yorkers Are Paying the Price for Albany’s Energy Mandates
- Time: AI Electricity Bills and Politics
- Wikipedia: Electricity Pricing
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