For years Western New York has been a haven for cheap energy thanks to local hydropower from Niagara Falls and our proximity to energy production from the Marcellus Shale fields in Pennsylvania. However, in the past 12 months, New York electricity and natural gas consumers have been facing some of their largest bills in years due to volatile energy markets.
Natural gas prices are 77% higher this year than they were in 2021, while electricity prices in Western New York have nearly doubled, up 92% from their 2021 levels.
Natural gas prices have been rising since last winter as higher demand and global supply shortfalls of fossil fuels were amplified by the outbreak of Russia’s war against Ukraine. With Russia being one of the world’s largest exporters of natural gas, the effect of Western sanctions against them further constrained global natural gas supplies causing prices to rise to their highest level since 2008. Domestic supplies of natural gas have also been limited as the United States became the world’s largest liquefied natural gas (LNG) exporter in 2022.
Natural gas is used for much more than just heating homes, it is the foundation of our nation’s electric power generation. According to the U.S Energy Information Administration, natural gas is the single largest source of energy used for electricity generation in the United States, making up about 38% of the fuel mix. On peak demand days in New York state, roughly 60% of electricity is generated from natural gas. Given this direct relationship, as natural gas prices rise, electricity prices also rise.
Volatile Commodity Markets:
Consumers from the average homeowner to commercial and industrial energy users are exposed to this dramatic price increase and are now faced with managing their energy budgets which have doubled or tripled in the past year. However, not all consumers are feeling the effects of these increases on their budgets.
Many commercial and industrial energy users who elect to receive third-party supply from an ESCo (Energy Services Company) have been able to lock in a fixed price before this rise in prices. Locking in a fixed price shielded these energy users from price increases and provided them with stable budgets.
For example, customers of Pittsford-based EnergyMark, a local electric and natural gas supplier have saved over $30 million in energy supply costs over the past year.
What Local Energy Consumers are Saying:
“EnergyMark’s expertise and proactive efforts have been a great addition to the Buffalo Bills team. With strategic purchases of natural gas and electricity through EnergyMark and a fixed price agreement, we are shielded from current market volatility. The result has been budget stability and significant monthly savings,” said John Polka III, Executive Director of Stadium Operations for the Buffalo Bills.
“Working closely with the energy experts at EnergyMark while closely monitoring energy rates, Rochester District Heating Cooperative, Inc. purchased natural gas futures in 2019 for our 2023 and 2024 needs. These extremely market friendly rates allow us to provide competitive and cost-effective energy and rate stability for our customers (members) for the next few years, even during this period of unprecedented rising costs and volatility in the energy markets,” said John M. Duchesneau, General Manager for the Rochester District Heating Cooperative.
EnergyMark provides a tailored approach to energy budget management, assisting clients in a variety of industries including health care, industrial manufacturing, commercial real estate, public and private education, and municipal users.
“With energy prices for consumers becoming a concern, attention to the control of energy supply price is key. Energy markets are the most liquid and volatile markets in the world, understanding how that translates to the price you pay can make a substantial difference in your budgets. Locking prices through a reliable supplier will provide stable, secure energy costs for your business,” said Gary Marchiori, President of EnergyMark.