Why New Yorkers Are Paying More for Gas Even as They Use Less

As a cold snap grips the region, many households are bracing for higher gas bills—even if they’re doing everything they can to conserve. A recent analysis shows that the culprit isn’t higher gas consumption, but the rising cost of maintaining and expanding gas pipelines across New York.

Jamie Van Nostrand, policy director at the Future of Heat Initiative and former chair of the Massachusetts Department of Public Utilities, explained the disconnect in a recent interview on Radio Chatskill.

“It’s helpful to point out that the price of gas really hasn’t changed much over the last decade or so,” Van Nostrand said. “It’s the cost of delivering that gas that’s driving up bills.”

According to the analysis, about three-quarters of a typical New York gas bill comes from delivery charges—not the gas itself. “The cost of the gas itself is only about one quarter of the bill,” Van Nostrand said.

Why Delivery Charges Are So High
These delivery charges largely reflect the money gas companies spend replacing pipelines—the primary way they earn profits. “They don’t make any money on the gas itself,” Van Nostrand explained. “The asset base for gas companies has increased from $17 billion to $37 billion over the last 10 years, and most of that is replacing pipes. Then there are profits and financing costs associated with that work.”

This structure creates a strong incentive for utilities to overspend on infrastructure, which in turn drives up bills for customers. “One of the biggest things we can do to address affordability is to get gas company spending under control,” Van Nostrand said.

Future of Heat Initiative’s Role
The Future of Heat Initiative, a nonprofit focused on energy affordability, works with state regulators to address these issues. “Across the country, natural gas sales are going down, yet spending on the gas system is going up. It’s just simple math: less sales, fixed costs rising—delivery charges go up,” Van Nostrand said.
He emphasized that while safety is essential, utilities often choose the highest-profit options for pipeline work rather than the lowest-cost solutions for customers. “Rather than replacing the pipes, which is where they make the most money, you could repair or reline them and keep them in service longer,” he said.

A longer-term solution, according to Van Nostrand, is electrifying homes and decommissioning parts of the natural gas system. “As sales go down, we need to be shrinking the gas system, otherwise rates are going through the roof,” she said.

The Role of State Regulators
In New York, the Public Service Commission sets utility rates. Utilities must file cases to increase rates, which regulators review carefully. “This is where regulators can really ask the tough questions: Is this replacement necessary? Is there a lower-cost solution? Should you repair rather than replace?” Van Nostrand explained.
She stressed the importance of addressing delivery charges to help customers. “It’s a source of real frustration. People are reducing gas use, but the delivery portion of the bill doesn’t change much,” he said.

Looking Ahead
As more New Yorkers switch from gas to electric heating, Van Nostrand warns that the cost of maintaining an oversized gas system could fall on consumers. “If we can’t reduce the cost of the system itself, bills are going to be much higher,” he said.

Future of Heat is advocating for regulatory changes to allow utilities to substitute electric service for natural gas, which would enable pipeline decommissioning and reduce unnecessary spending. “The legislature could help by giving the commission the authority to authorize utilities to move customers off gas and onto electricity,” Van Nostrand said.

Image: The Transcontinental Gas Pipe Line Company natural gas pipeline, a network of 10,000 miles of pipeline stretching from South Texas to New York City, is seen in South Amboy, N.J., at Raritan Bay on Monday, Nov. 17, 2025. (AP Photo/Ted Shaffrey)