The calculation of an electrical bill in residential cooperative buildings in New York City is usually based upon the current Consolidated Edison Company Service Classification SC-1. This is the exact same rate charged to any residential customer that is directly metered by the Con Edison Company. To fully understand the charges, an understanding of the various items used in the calculation of the monthly bills is necessary. The following description of the terms and items will explain the components used in the calculation of the monthly charges.
Energy Charge – Energy is measured in kilowatt hours (Kwhs). This charge is for the actual usage of electricity for a period of time, usually one month. ie. watts X hours divided by 1,000 = kilowatt hours. 10 – 100 watt lamps burning for 10 hours = 10,000 watt hours or 10 kilowatt hours (10 Kwhs). The Energy Charge is broken down into four separate components:
- Market Supply (or Commodity portion [COM]),
- Monthly Adjustment,
- Transmission, and
Parts (2), (3), and (4) equal the Delivery portion [T&D]. The Utility Company has a different rate each month. The actual rate charged is a proration of the number of days of each month in the billing period.
Customer Charge – There is a charge per month, regardless of the amount of usage. This charge is to cover the cost of reading the meter and billing of the account and is part of the Delivery portion of the bill. This is not to be confused with a minimum charge for a specific consumption or usage, but is a charge added to the billing for the actual use indicated on the meter. This charge varies every month based upon the number of days in the billing period.
System Benefit Charge – The System Benefit Charge is a charge used to help relieve Con Edison of its stranded costs before New York State insisted they sell their generating plants for the purposes of electric deregulation. This charge is determined by multiplying the system benefit factor by the Kwhs used in the billing period and is a part of the Commodity portion of the bill.
“MSC” & “MAC” Adjustment Factor – The adjustment factor (charge or credit) is based upon the monthly cost of fuel purchased by the Utility Company as well as the cost for purchasing power from other Utilities during periods of high use by the customers. The “MSC” Adjustment is applied to the commodity portion of the bill and the “MAC” Adjustment is applied to the delivery portion of the bill. This charge or credit is determined by adding the two adjustment factors together and multiplying by the kilowatt hours (Kwhs) used in the billing period. The changing adjustments are determined monthly by Con Edison and can be either a charge (+) or a credit (-).
Rate Adjustment – The rate adjustment is based upon the taxes that the Utility Company must pay to the City of New York and the State of New York for their operation and is also known as the Gross Receipts Tax. There are two different factors of this adjustment: one applied to the commodity portions of the bill and one applied to the delivery portions of the bill. This adjustment will vary periodically.
Sales Tax – The last item used in calculating the bill is the sales tax which is currently 4.5% of the sum of all components listed above, for residential customers.