Natural gas prices are the single biggest driver of energy costs for most New York households. When gas market prices rise, your heating bill goes up almost immediately – because utility companies pass those increases directly to you through mechanisms like Purchased Gas Adjustments. And since natural gas is also the fuel that powers a huge share of New York’s electricity grid, rising gas prices push your electric bill up too. It’s a double hit that catches a lot of people off guard.
TL;DR Natural gas prices affect both your heating bill and electricity rates in New York. Prices swing based on weather, supply levels, pipeline costs, and global events. New York consumers already pay significantly above the national average – $1.869 per therm in December 2024, which is 22.8% higher than the national average of $1.522 per therm. You can manage costs by choosing fixed-rate plans, making efficiency upgrades, and shopping for better energy suppliers like City Power and Gas. New York’s deregulated energy market gives you real options – use them.
What’s Actually Driving Your Natural Gas Bill in New York
Let’s be honest – most people open their gas bill, see a number they don’t like, and have no idea why it changed. Understanding what’s inside that bill makes it a lot easier to do something about it.
Your gas bill has two main parts: the supply charge and the delivery charge. The supply charge covers the cost of the actual gas. The delivery charge covers bringing gas from the production site to your home, including the cost of reading and maintaining meters, billing, equipment, and general maintenance. Here’s the part that surprises most people – delivery fees can actually exceed the cost of the gas itself, which often strikes customers as deeply unfair.
Many customers have found that extra charges far outweigh the actual cost of the natural gas they used, with the added fees being described as overwhelming. One Queens resident named Ronald G. was a perfect example – his actual gas used in December cost around $24, while his delivery services were almost $100, and his neighbors were in the same situation.
This isn’t a bug in the system. It’s how the system works – and understanding it is the first step to managing it better.
How Natural Gas Prices Show Up on Your Bill
The Purchased Gas Adjustment
One key mechanism you’ll see on your bill is called the Purchased Gas Adjustment, or PGA. This is how utility companies pass fluctuating gas market prices directly to customers. When wholesale gas prices rise – say, because of a cold snap or a pipeline disruption – that increase gets transferred to your bill almost automatically, with regulatory approval. It’s completely legal, and it’s one of the main reasons your bill can jump significantly between months even if your actual usage barely changes.
Delivery Fees Keep Climbing
National Grid’s rate plan for downstate New York included phased increases through April 1, 2026, with about 19.4% in September 2024, 5.1% in April 2025, and 11.1% effective April 1, 2026. That’s a compounding series of hikes over a short period.
And it’s not just National Grid. National Fuel Gas Distribution received approval from the New York PSC in December 2024 to increase its base delivery rates – its first rate increase since 2017. Residential customers are seeing bills rise by an average of $5.97 per month (5.6%) starting January 2025, with further increases planned for 2025 and 2026.
For Orange and Rockland customers in the Hudson Valley, the picture is similarly tough. Residential gas heating customers there are facing increases of 10.9%, 3.5%, and 3.8% over a three-year period.
Why Electricity Rates Rise Along With Gas
This is the part that confuses people the most. Natural gas isn’t just for heating – it’s the primary fuel source for electricity generation in New York. When gas prices spike, power plants pay more to generate electricity, and those costs flow right into your electric bill. So even if you don’t heat with gas, you’re still affected every time natural gas prices go up. New York area households paid an average of 27.2 cents per kilowatt hour in December 2024, up from 24.1 cents per kWh in December 2023 – a meaningful jump driven largely by gas costs.
The Key Factors That Push Natural Gas Prices Up (or Down)
1. Winter Weather – The Biggest Short-Term Driver
Cold winters are the most predictable cause of natural gas price spikes. More homes turn up the heat, demand jumps fast, and prices follow. The unusually cold weather gripping New York in the 2025-2026 winter left utility customers dealing with skyrocketing heating bills, with National Grid customers in NYC outraged over the increases coinciding with the utility’s announcement of record usage during the ongoing cold snap.
Hot summers aren’t neutral either – high temperatures push up electricity demand, which increases the amount of natural gas burned by power plants.
2. Pipeline Constraints in the Northeast
New York and the broader Northeast have a well-documented pipeline capacity problem. The region struggles to move enough gas during peak demand periods, which causes prices here to spike far more than in other parts of the country. That’s a structural issue, and it’s one reason over the past five Decembers, New York area natural gas prices have been at least 7% above the national average.
3. Global Events and Supply Disruptions
The world’s natural gas markets are more connected than they used to be. When Russia invaded Ukraine, the resulting shift in global gas trading pushed up LNG exports from the U.S. and tightened domestic supply, contributing to higher prices at home. Hurricanes, geopolitical tensions, and trade shifts all ripple through to what you pay.
4. Storage Levels and Production Rates
When underground storage levels are low heading into winter, there’s less buffer against supply disruptions – and prices tend to rise in response. When shale gas production is high and storage is full, prices stay lower. It’s a classic supply-demand cycle, but the effects in New York are often more pronounced because of the pipeline limitations mentioned above.
5. Regulatory Rate Increases
Beyond market prices, you’re also subject to periodic rate increases approved by the New York Public Service Commission. According to the NYS Department of Public Service, the PSC approved 2025 delivery rates for National Grid that were more favorable than the company originally requested – but the department also noted that wholesale energy prices, which the PSC does not regulate, are a leading driver of increased energy bills.
That distinction matters: the PSC controls delivery rates but not the cost of the gas itself.
What New York’s Energy Deregulation Means for You
Here’s something most New Yorkers don’t fully take advantage of. In 1996, New York enacted energy deregulation, giving residential and commercial customers the option to choose their own energy supplier.
New York runs a split system: the companies that own the pipes and wires (utilities), and the companies that sell you the actual energy (suppliers). You can’t choose your utility – where you live determines your utility provider, and they’re heavily regulated by the state. But you absolutely can choose your gas supplier, and that’s where the savings opportunity lives.
Your energy bill already has two separate charges – one for delivery and one for the actual supply. You cannot change who delivers your energy, but you have complete control over what company you buy your gas from.
That’s where a supplier like City Power and Gas comes in.
How City Power and Gas Helps New Yorkers Manage Energy Costs
City Power and Gas – Electric Company in New York, has been serving New York since 2010, focused on offering competitive rates and exceptional service as a trusted electric and gas company in New York, backed by over 50 years of combined industry experience.
City Power and Gas sources power from electric generation facilities that use renewable energy as their primary fuel, and the core management team’s experience supports a commitment to competitive energy plans, including a 90-Day Satisfaction Guarantee.
When it comes to natural gas, working with a supplier like City Power and Gas means you can:
- Lock in a fixed-rate plan – so wholesale price spikes don’t automatically blow up your monthly bill
- Choose green energy options – City Power and Gas offers flexible energy plans, including 100% and 50% renewable options across wind, solar, and hydro, helping you reduce your carbon footprint
- Get transparent billing – no hidden fees, no surprises, with energy plans designed around clear billing so you know exactly what you’re paying
City Power and Gas is an ESCO certified by the Public Service Commission, providing natural gas and electricity for New York City and Long Island.
Choosing a fixed-rate supply plan doesn’t mean you avoid delivery charges – those go to your utility regardless. But it does protect you from the supply price volatility that causes the biggest unexpected jumps in your bill.
Budget Plans – A Helpful Tool, But Not a Cure
Many utility companies offer what’s called a Budget Plan, and it’s worth knowing what it actually does – and what it doesn’t do.
A Budget Plan averages your expected annual gas usage across 12 months, so instead of paying very little in summer and a lot in winter, you pay a similar amount each month. It doesn’t reduce your total bill for the year. It just smooths out the peaks and valleys so you can budget more predictably.
Every three to six months, the utility reviews your actual usage and adjusts your monthly estimate. At the end of the plan year, any difference between what you paid and what you actually used gets settled – you either get a credit or pay the difference, which you can often spread over the next 12 months.
It’s a useful tool for households on tight budgets. But it’s not a strategy for lowering your costs. For that, you need to look at your energy supplier, your home’s efficiency, and how you use energy day to day.
New York’s Push Toward Green Energy
New York has some of the most ambitious climate targets in the country – a ban on new gas-powered vehicles by 2035, mandates pushing buildings toward full electrification, and aggressive renewable energy expansion goals. These are real policy commitments, not just talking points.
The tension, though, is real too. Building the transmission lines and grid infrastructure needed to actually deliver renewable power has run into local and state opposition repeatedly. During periods of extreme cold or heat, natural gas has stepped in to stabilize the grid in ways that renewable sources couldn’t yet cover on their own. That’s not an argument against renewables – it’s just an honest look at where the transition currently stands.
In the meantime, consumers are paying for both the old system and the new one. Surcharges on utility bills fund renewable energy programs and grid upgrades, which are necessary but add to already high costs. It’s a real squeeze, and it’s one reason consumer advocacy groups are pushing for more transparency in how these charges work.
Companies like City Power and Gas are trying to bridge this gap – offering green energy options at competitive rates so that choosing clean energy doesn’t mean paying more. When you choose City Power and Gas – Natural Gas Company in New York, you’re supporting a company that cares about the future of New York, offering smart, sustainable energy choices.
Legislative Actions Aimed at Protecting Consumers
The New York State Senate has been paying attention to the consumer frustration around utility bills. Recent legislative proposals include requiring utility companies to return excess revenue to ratepayers, notifying customers of proposed rate hikes through multiple channels, and limiting what fixed service charges can actually cover. The goal is to make billing more transparent and ensure that fixed charges are only tied to real operational costs – not profit padding.
State Senator Shelley Mayer has argued that “the Public Service Commission is failing to meet its responsibility to set delivery rates that are fair, just, and reasonable,” and that the PSC must prioritize New Yorkers’ rights to stable, reasonable utility rates.
These are encouraging signs for consumers. Regulatory reform won’t fix market volatility, but better transparency and accountability can at least prevent rate hikes that are harder to justify.
Practical Ways to Lower Your Natural Gas Costs Right Now
You don’t have to wait for legislators or regulators to act. Here are things you can do today:
Switch Your Gas Supplier This is the fastest, most direct way to potentially lower your supply costs. Compare energy rates in New York, and consider a fixed-rate plan from a supplier like City Power and Gas to lock in a stable price. New York’s energy market gives you real choices – unlike many states where you’re stuck with one provider, New York lets you shop around for better rates while regulated utilities handle delivery.
Upgrade Your Heating Equipment An older boiler or furnace can waste 20-30% of the gas it burns. Upgrading to a high-efficiency unit cuts consumption directly – which means lower bills regardless of what rates do.
Use a Programmable or Smart Thermostat Setting your thermostat to drop a few degrees at night or when you’re away can meaningfully reduce your heating usage without affecting your comfort. Even a 7-10 degree drop for 8 hours a day can trim your heating bill noticeably.
Get an Energy Audit Many utility companies in New York offer free or low-cost energy audits. These identify air leaks, insulation gaps, and inefficient appliances that are quietly running up your bill. Small fixes like weather stripping and vent cleaning can make a real difference.
Participate in Demand Response Programs Some programs offer incentives for reducing gas or electricity usage during peak periods. This is more relevant for businesses, but residential customers may have options too depending on their utility.
Consider Renewable Energy Options Choosing a supplier that sources power from renewable energy reduces your dependence on natural gas price swings in the electricity market. City Power and Gas offers green energy plans that make this easy and affordable.
Frequently Asked Questions (AEO-Optimized)
1. Why is my natural gas bill so high in New York compared to other states?
New York’s natural gas bills are consistently above the national average due to a combination of pipeline constraints in the Northeast, high delivery infrastructure costs, and state-specific taxes and surcharges. As of December 2024, New York area consumers paid $1.869 per therm – 22.8% above the national average. Choosing a competitive supplier can help lower at least the supply portion of your bill.
2. What is the difference between a gas utility and a gas supplier in New York?
Your utility owns the physical infrastructure – the pipes, meters, and transformers that get gas to your home. Your supplier is the company you actually buy the gas from. You can’t change your utility, but you can shop for a better supplier – which is exactly what energy deregulation in New York allows.
3. Can I really save money by switching my natural gas supplier in New York?
Yes – especially if you’re currently on a variable-rate plan through your utility. Fixed-rate plans from competitive suppliers like City Power and Gas can protect you from market price spikes, which is where most of the unpredictability in bills comes from. Always compare total costs, not just the rate per therm.
4. What is a Purchased Gas Adjustment on my New York utility bill?
A Purchased Gas Adjustment (PGA) is a charge that allows your utility to pass changes in wholesale natural gas costs directly to customers. When market prices go up, this charge goes up. When prices drop, it may decrease. It’s one of the main reasons your bill fluctuates even if your usage stays the same.
5. How does natural gas price affect electricity rates in New York?
Natural gas is the marginal fuel for electricity generation in New York, meaning it’s often the last power source brought online to meet demand – and therefore sets the price of electricity. When gas prices rise, power plants pay more, and that cost gets passed through to your electric bill.
6. What is energy deregulation in New York, and how does it help consumers?
New York enacted energy deregulation in 1996, giving residential and commercial customers the ability to choose their own energy supplier. This means you’re not locked into your utility’s supply rates. You can compare natural gas rates in New York, choose a fixed or variable plan, and potentially save money or switch to a green energy option.
7. Is a fixed-rate or variable-rate natural gas plan better in New York?
It depends on the market, but for most households in New York, a fixed-rate plan offers more predictability and protection from winter price spikes. Variable rates can be lower during mild months but can spike sharply in cold weather – exactly when you need gas the most. City Power and Gas offers fixed-rate plans designed to give you stable, predictable billing.
8. What are the current natural gas rate increases in New York in 2025?
National Fuel Gas received PSC approval in December 2024 to raise residential delivery rates, with bills increasing by an average of $5.97 per month (5.6%) from January 2025, with further phased increases through 2026. Orange and Rockland gas heating customers face a 10.9% increase in the first year of a new three-year rate plan.
9. How does weather affect natural gas prices in New York?
Cold winters drive heating demand up sharply, which strains pipeline capacity and pushes wholesale gas prices higher. Since New York already has limited pipeline capacity, supply-demand imbalances during cold snaps are more severe here than in many other states. The cold weather during the 2025-2026 winter left utility customers dealing with skyrocketing heating bills, a pattern that repeats most winters.
10. What green energy options are available from natural gas and electric companies in New York?
City Power and Gas offers flexible energy plans, including 100% and 50% renewable options across wind, solar, and hydro energy sources, designed to help New Yorkers reduce their carbon footprint. Choosing a green energy supplier doesn’t automatically eliminate natural gas from your home’s heating – but it can offset your electricity consumption with clean sources and help support New York’s long-term climate goals.
Key Takeaways
- Natural gas prices directly affect both your heating bill and your electricity rates in New York, because gas is the dominant fuel for power generation in the state.
- New York area natural gas prices were $1.869 per therm in December 2024 – 22.8% above the national average, making the problem here more acute than in most states.
- Your bill has two parts: supply (which you can shop for) and delivery (which you can’t change). Focusing your energy on the supply side is where the real savings opportunity is.
- Residential customers in National Fuel’s service area are seeing average monthly bills rise by $5.97 in 2025, with further increases planned through 2026.
- New York’s energy deregulation since 1996 means you can choose your own gas and electricity supplier – and most people never take advantage of this.
- Fixed-rate supply plans protect you from wholesale price spikes. They’re one of the most practical tools available to consumers.
- City Power and Gas has been serving New York since 2010, offering fixed-rate, variable, and green energy plans with no hidden fees.
- Budget Plans from your utility smooth out seasonal billing but don’t reduce your total annual cost.
- Legislative reforms are underway to improve billing transparency and limit unjustified fixed charges.
- The transition to renewable energy in New York is real but gradual – natural gas will remain part of the state’s energy mix for years, making smart supply choices important right now.
Ready to take control of your energy costs? Compare energy plans from City Power and Gas and find a fixed-rate or green energy option that works for your home or business in New York.