Probe launched into electric companies' billing

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New York City officials are investigating whether electric companies took advantage of their customers by increasing electricity rates during the winter months.

In the course of the November/December billing period, Con Edison charged more than 4 cents a kilowatt per hour for electricity. In the following billing cycle, the rate nearly tripled, reaching 11 cents.

"Most New Yorkers don't understand how it is that their bills got to be so high," says Assemblyman Richard Brodsky. "It turns out there's a price-fixing scheme."

Brodsky is one of the officials who launched an investigation into New York Independent System Operators (NYISO), a corporation that trades in electricity. Researchers say the company works by its own set of rules and holds secret auctions to establish rates.

Brodsky wants to see the auction process becoming more transparent, but a NYISO spokesperson says the current pricing system provides "protection for customers." Addressing the mid-winter electricity rate increases, the spokesperson says the responsibility lies with Con Edison.

Natural gas prices were at an all-time high last spring, when electric companies like Con Edison bought electricity for the upcoming winter. When customers turned on their heat in the winter, it was reflected in their monthly bills.

Although in recent months the price of natural gas has decreased, experts say it is hard to predict whether it will be reflected in the cost of electricity.

According to Con Edison officials, a new billing process may be introduced in 2010, making electricity bills clearer and easier to understand. Under the new system, the billing cycle will be based on a monthly rate instead of a forecasted rate. State legislators are expected to vote on the new billing process early next year.

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