Natural gas prices increasing electricity costs in New York

Consumers in New York are upset about rising electricity bills. Many fear that their costs will increase even more if electric companies get the price hikes they have requested. People in Britain are facing similar frustrations with higher electricity prices. Right-wing politicians in both countries are blaming these increases on renewable energy requirements. They argue this creates problems for consumers. However, experts say that the rising prices of natural gas are the main issue. In areas with deregulated electricity markets, natural gas prices often set the overall cost of electricity. Deregulation in the U.S. was inspired by the UK market system. The UK had options for how to structure its electricity market. It could allow for direct deals between power generators and customers or create a market where all generators bid to sell electricity. The latter option has led to higher electricity prices because the last generator called into action is usually a gas-fired one. This generator sets the price for all electricity, even if other energy sources are used. Gas prices are crucial because they determine the bid price from gas-fired generators. This means that it affects the prices consumers pay, regardless of the energy source. Even if most electricity comes from non-gas sources, prices still depend on gas prices. Additionally, there is a problem with gas turbine manufacturers not producing enough units. This may be due to a lack of investment in expanding capacity. As demand for gas electricity increases, manufacturers may struggle to keep up. Overall, gas producers and owners of non-gas generators are likely to benefit from this situation in the coming years. However, the market may need to adapt, especially if new technologies emerge that could reduce the reliance on gas. For now, consumers are left to deal with higher costs.