NYSEG & RG&E File for a Major Rate Increase: What It Means for Your Business’s Delivery Costs

Earlier this year, New York State Electric & Gas (NYSEG) and Rochester Gas & Electric (RG&E) submitted proposals to the state requesting double-digit delivery rate increases for electric and gas customers. So, what prompted this jump? The companies’ new “Powering New York” plan aims to fund major upgrades to aging grid and gas infrastructure, expand capacity, and meet rising energy demand and state regulatory requirements.

If you operate a business in their territory, these changes could significantly impact your monthly energy costs.

What Are Delivery Rates?

Typically, your utility bill breaks down into two main sections: supply and delivery. The supply portion refers to the electricity or natural gas itself, which you can shop for from different service providers. The delivery portion covers the costs of the pipes, wires, infrastructure, and services required to deliver energy to your building. This is significant because utilities like NYSEG and RG&E only profit from the delivery portion of your bill, and these charges have been increasing over the last several years across New York’s utilities.

How Much Are Rates Going Up?

According to filings with the NY Public Service Commission, NYSEG proposed increasing electric delivery revenues by about 35%, and RG&E by around 36%—though most businesses will see varying impacts depending on their usage profile and customer type. Gas delivery revenue hikes are also substantial, often in the 30–40% range for base delivery and service charges. These increases target grid modernization, expanded capacity, storm response, and compliance with state mandates.​

What Does It Mean for Your Business?

With these proposed rate increases, businesses are facing new challenges that go beyond simple efficiency measures. Understanding how these delivery charges work is critical for budgeting and navigating this transition, mainly since they affect every commercial customer regardless of energy supplier.

• Higher unavoidable costs: Delivery charges make up roughly one-third of your total bill. Even with efficient use or supply shopping, these costs are unavoidable if approved.
  
  
• Budget pressure for high-load facilities: Rate spikes can strain budgets, especially for facilities with high consumption, seasonal swings, multiple meters, or extended operating hours.
  
  
• No competitive market for delivery: Unlike supply, you cannot shop around for delivery prices; they are set by the PSC and applied uniformly to all customers in the utility’s territory.

Your Options as a Commercial Customer

Shop for supply: You can still choose your energy supplier for the commodity portion, finding fixed or index-based rates and contract terms to offset higher delivery costs.

Assess your usage profile: Demand charges and delivery rates depend on how and when you use energy. Lowering peak demand and increasing operational efficiency remain your best strategy for controlling costs.

Stay engaged in the regulatory process: The NY Public Service Commission holds public hearings and gathers feedback before approving increases. Participating can help share the commercial impact.

Next Steps

With delivery rate increases on the horizon, it’s more important than ever for NYSEG and RG&E business customers to plan for higher utility costs and proactively review their usage. Catalyst Power® can help by providing expert guidance on energy contracts and strategies to make the most of your energy supply options.