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How Monday’s storm sparked a 1000 percent jump in electricity costs — how YOU’LL pay

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NEW YORK — One effect of the fierce and wide-ranging thunderstorms that hit the tri-state area on Monday will be felt by many local residents in their next utility bill.

While the charge may be not be enormous, it's still an unforeseen extra expense that underscores how New York's power grid relies in part on power suppliers located far from the five boroughs. That fact indicates that the grid system is easily susceptible to market forces as well as weather effects.

The storm, which blew across the region from around 4:00 to 8:00 P.M. Monday, brought torrential rain, high winds, and lightning strikes. The lightning, though, was the only free electricity from the big storm.

Instead, according to the New York Independent System Operator, or NYISO, the organization that oversees the state's electrical grid, the cost of electricity launched into the stratosphere.

The average cost that utilities pay for electricity is about $32.00 per megawatt hour, according to NYISO. One megawatt powers about a thousand homes. In Monday's heat, because of air conditioning and other electricity demands, utilities paid about $94.00 per megawatt hour during the business day. However, about an hour before the close of business, the storm clouds rolled in. Just before the storm hit here, the electricity price surged to $1042.37.

NYISO confirms to PIX11 News that that cost gets passed on to the customers of local utilities.

"I don't want to pay no extra money," said Valerie Johnson of Astoria, Queens. She said that she was disappointed to hear about the extra expense, because she tries to conserve at home.

Charles Cohn, a Bronx resident, said that the surge pricing is indicative of a larger problem.

"I think we need to increase electricity generating," Cohn said.

Electricity comes to the New York City area from a variety of locations, some as far away as Quebec, Canada. Monday's storm made receiving power from those more distant sources more difficult, a NYISO spokesperson told PIX11 News.

That, in turn, required New York area utilities, such as Con Edison, National Grid and PSE&G, to rely on local power generation only. The result was the supply of electricity shrinking, causing the cost to rise significantly, but temporarily. The cost surge lasted at least three hours, probably longer, according to Bloomberg News, which first reported on the surge pricing.

"It's unusual, but it's nothing to be alarmed about," said Paul Patterson, an analyst in the energy sector analysis firm Glenrock Associates.

"It's important to understand," he said in an interview, that "the power you're using right now to cool your home, to watch TV was created an instant ago."

Grid-generated electric power, Patterson pointed out, cannot be stored ahead of time, before it's sold. That results in electricity being sold as soon as it's both available and demanded.

"Since there's not a lot of inventory," Patterson said, "prices can get very expensive."

He also pointed out that large, institutional customers of utilities, such as corporate headquarters, or government complexes, are given access by utilities to information that can help an institution know if a potential surge event is on the way. That advance knowledge helps major customers conserve electricity before a surge, freeing up power for other customers and saving the institutional customer money in the process.

In the not-too-distant future, Patterson told PIX11 News, "there will be technology available that allows households" to know of a possible surge pricing event beforehand. Exactly how soon that will be available is not entirely clear.

Meanwhile, the cost to individual customers of Monday's price surge is minimal. NYISO would not give a specific figure, but PIX11 estimates the amount to be less than a dollar per customer.