(The Center Square) – New York City’s electricity rates are being driven up by taxes layered onto utility bills by the city government, according to a new report by a watchdog group, which calls on the state to carve out exemptions.
In a new report, Manhattan Institute fellow Ken Girardin found that no major other U.S. city relies on its electric grid to drum up revenue as heavily as New York. The largest of the city taxes is a property tax the city charges Con Ed on its wires and other equipment, which Con Ed then passes on to customers without denoting the specific charge on their electric bills.
New York City’s policies add an effective 36% to 43% tax to electricity delivery through a property tax on Con Ed, a utility tax on its receipts, and a sales tax on customers’ bills, which are passed on to consumers, according to the analysis. Con Ed’s city property tax bill on its electric facilities more than doubled between 2015 and 2025, from $1 billion to $2.1 billion, according to the institute’s analysis.
Overall, New York taxes cost a typical single-family household almost $47 a month, or $561 a year, and a typical apartment more than $22 a month, the report said.
Compared to other major U.S. cities, New York City collects about 8 cents per kilowatt-hour through Con Ed, while Chicago and Washington, DC, collect about 1 cent through their utilities, according to the report.
For a typical NYC apartment, over $22 of last year’s $118 monthly bill went to pay city taxes, the report noted. For a single-family house, the city’s monthly take was almost $47, or $561 over 12 months. Including the property taxes paid by power plants within the five boroughs pushes that figure higher yet.
“The current tax scheme on electricity persists mainly because it is largely concealed from the public,” Giradin wrote. “New York City is an outlier among major cities, both in terms of the size of Con Ed’s property-tax liability and the extent to which those taxes are not immediately visible to ratepayers.”
He noted that the state Public Service Commission and Con Ed last year agreed to a landmark “bill transparency” provision that requires the company to itemize on customers’ bills “the dollar amount attributable to municipal property taxes.”
“This will be a good first step toward allowing New Yorkers to see the extent to which utilities have been conscripted to act as tax collectors,” he wrote. “Residential customers will at least know that they are paying three discrete taxes to the same entity, the City of New York.”
But Girardin set the transparency requirement should also be a state law, not just an agreement, and also called on the state Legislature to consider exempting electricity distribution infrastructure from the city property tax entirely and requiring Con Ed to reduce electricity delivery rates commensurately.
“To partially replace the lost revenue, the state could give the city permission to increase the sales-tax rate on electricity delivery,” he wrote. “But the city should not be allowed to surreptitiously pass along billions of dollars in tax liability to electricity customers.”
