New Yorkers to See Property Tax Breakdown on Con Ed Bills

Consolidated Edison customers in New York City will soon see a detailed breakdown of property taxes on their electricity bills, a move intended to bring transparency to a significant, previously obscured charge. This change, slated to appear on bills by early next year, will reveal that a substantial portion of the delivery charge—approximately 21% for the average customer—is allocated to Con Edison's property taxes.

The property tax alone adds about 5.4 cents per kilowatt-hour to customer bills in the five boroughs. This translates to roughly $15 per month for a typical apartment and more than $32 per month for a single-family house, according to an analysis by the Manhattan Institute. This hidden tax is a major contributor to New York City having higher residential electricity rates than other major cities in the eastern United States.

Con Edison's property tax bill for its electric system has increased substantially, rising from $1 billion in 2015 to over $2.1 billion last year. This escalation is attributed to several factors, including rising component costs used in tax calculations and upgrades to the company's grid mandated by New York's 2019 climate law, which increased its tax liability. The city's property tax system allows mayors and the City Council to shift taxes onto utility systems, with Con Edison being the largest recipient.

No other major city imposes such a significant property tax burden through utility bills. When the impending change in bill itemization was announced, a spokesperson for Mayor Mamdani accused Con Edison of "misleading" customers. This reaction suggests a potential effort by the mayor's office to resist the transparency measure, as the administration has approved legislation that allows the City Council to increase the tax burden shifted to utilities.

The Public Service Commission, the state board regulating utility rates, has previously expressed criticism regarding the high property taxes Con Edison passes on to consumers but lacked the authority to prevent it. As a next best step, the commission granted Con Edison permission to itemize these city property taxes for its New York City customers. While this provides greater clarity on the delivery charge, the same commission does not permit utilities to itemize the costs associated with various renewable energy subsidies and other climate mandates.

Last year, Con Edison's electric system accounted for the equivalent of 6% of New York City's property tax receipts, an increase from 4.4% a decade prior. The Manhattan Institute suggests the city could opt for a higher sales tax instead of the property tax on utilities, which would make such charges more apparent to consumers.