My electric bill went up about 40% since the beginning of 2010 and it never went back to the price I paid before. I did called Con Edison, my electricity company to find out what is going on? They said that I used more electricity than before. However, I only added one extra computer in the house that year, nothing else. I did some searching on the internet to figure out how much electricity a single computer uses for one hour. The result told me that the electricity usage of one computer is not possible to push my bill up 40%.

I get my electric bill today, May 2012, but the amount on the bill is little bit lower than previous month, I am wondering what is going on again. Therefore, I take a close look at my bill again and do some searching on the internet again.

Guess what I find out:

The electric bill has two kinds of charges: Delivery charge and Supply charge.

The total of bill = delivery charges + supply charges

The delivery charge is fully controlled by Con Edison since the electricity system is monopoly. However, Con Edison cannot raise the delivery charge whatever they want since the electricity system is regulated. That means, in order to raise the price, Con Edison must have the permission from the local government.

According to this articles http://cityroom.blogs.nytimes.com/2009/01/07/con-ed-rate-increase-moves-forward and http://cityroom.blogs.nytimes.com/2009/04/21/regulators-approve-con-edison-rate-increase/, the local government give the permission to Con Edison to raise the delivery charge. The interesting question is why the local government gave the permission to Con Edison to raise the price? The main reason was the blackout and the explosion event before the permission is granted.

Con Edison said that it was hard to maintain a reliable system without raise the delivery fee. That is why there are blackouts. So obviously, if the local government does not allow it to raise the price, it will let you have the blackouts.

Another interesting question, why Con Edison needs to and wants to raise the delivery charge? The main reason is the supply charge. Since the supply charge of the electricity is not monopoly, Con Edison has to complete with other suppliers, therefore, Con Edison unable to raise the supply charges to make as much profit as before. In order to make up the same profit as before, Con Edison use the blackouts to force the local government to grant the permission to raise the delivery charges to make up the profit from the lost of supply charges.

I compare my old bills from the year of 2008 and the bill of 2012, the supply charge is little bit lower, but the delivery charges is up more than 40%. As everyone knows, the supply charge is related to the price of commodities. Since the supply charge does not change that much, therefore, the increase price of commodities does not cause the increase our electric bills.

Finally, I realize that, it is not the extra computer I got, it is not the blackout, it is not the increase price of the commodities make our electricity bills so high, it is the delivery charge which is monopoly.