Rate vs tariff: the distinction every NY customer should know
Rates (set by National Grid)
What you pay the utility for delivery and (optionally) supply. The PSC reviews and approves them in a rate case, typically every 3 years.
- ·Basic service charge (fixed $/month);
- ·Delivery service charge ($/kWh);
- ·RDM, transmission revenue adjustment, legacy transition charge;
- ·Default supply + Merchant Function Charge.
Tariffs (set by the state)
State and municipal add-ons. National Grid collects them and passes them to the right agency. Sometimes called "state surcharges".
- ·System Benefits Charge (SBC) for efficiency programs;
- ·Renewable Portfolio Standard (RPS);
- ·Temporary state assessment surcharge;
- ·State and local sales tax.
Service classifications: SC-1, SC-2 and beyond
Your Service Classification controls which rate schedule applies. National Grid keeps about 9 active classifications in its PSC 220 electric tariff:
| SC code | Who it covers |
|---|---|
| SC-1 | Residential and farm service (most homes) |
| SC-1C | Residential and farm with optional large Time-of-Use rate |
| SC-2 | Small general service (small commercial) |
| SC-3 | Large general service |
| SC-3A | Large general service, Time-of-Use |
| SC-4 | Customers taking Niagara Project power (defined territory) |
| SC-6 | Purchase of electricity from qualifying on-site generators |
| SC-7 | Standby service for customers with on-site generation |
| SC-12 | Special contract rates |
See our dedicated service classification guide for cancelled rates and re-classification tips.
Delivery rate components, explained line by line
- ·Basic service charge: flat $/month, covers meter reading, billing and overhead. Constant regardless of usage.
- ·Delivery service charge: per-kWh or per-therm cost of transporting the energy.
- ·Revenue Decoupling Mechanism (RDM): tiny refund or surcharge against National Grid's PSC-approved revenue target. Encourages efficiency by removing the link between volume sold and utility revenue.
- ·Transmission revenue adjustment: same logic as RDM, for transmission revenues.
- ·Legacy transition charge: refund or recovery of pre-2001 power-supply contracts and the NYPA hydropower discount.
- ·Reliability Support Services (RSS): payment for stand-by generation that can ramp up when transmission is congested.
Supply rate components (only if you stay on default supply)
- ·Market price supply charge: the actual wholesale-cleared cost National Grid pays each month.
- ·Merchant Function Charge (MFC): utility's procurement fee. Drops to zero when you switch to an ESCO.
- ·Electricity Supply Reconciliation Mechanism (ESRM): smoothing line for cold-month wholesale spikes. Can be positive or negative on any given bill.
State surcharges (tariffs)
- ·NY State Assessment (NYSA / TSAS): state-mandated charge funding utility-service oversight under Section 18-a of the Public Service Law.
- ·System Benefits Charge (SBC): funds NY's energy-efficiency, low-income and clean-energy programs.
- ·Renewable Portfolio Standard (RPS): funds the state's renewable-energy targets.
- ·State and local sales tax: rate varies by municipality.
More detail at our NY state surcharges guide.
How the most recent rate case shaped 2024-25 bills
National Grid's upstate Niagara Mohawk subsidiary and its downstate gas subsidiaries (KEDNY in NYC, KEDLI on Long Island) file multi-year rate cases with the NY PSC on a rolling basis. The most recent settled rate plans raised the delivery side of bills in two main ways:
- ·Higher basic service charge: the fixed monthly portion of the delivery rate rose, weighting bills slightly more on the always-on side and slightly less on the per-kWh side.
- ·Storm-hardening and clean-energy capex riders: rate-case-approved capital investment in storm hardening (post-Sandy upstate) and decarbonisation showed up as new line items.
- ·EAP delivery discount expansion: income-qualified Energy Affordability Program discounts widened, reaching more SNAP and HEAP-eligible households automatically.
For the current effective tariff in your zone, check the PSC document portal at documents.dps.ny.gov or the National Grid rates page.
Frequently asked questions
Page 2 of the National Grid bill, in the electric or gas delivery block, shows the rate code (for example "Electric SC1 Non Heat"). Most residential customers are SC-1.
Only marginally. Delivery is regulated, not negotiated. The fastest way to lower the bill is to reduce kWh and therms, or shop the supply line against an ESCO. See electric supply prices.
For households that can shift big loads to overnight (EV charging, dishwasher), yes. For most homes with predictable evening use, the savings are small.
Each subsidiary files its own 3-year cycle. Check the PSC docket portal for the latest Niagara Mohawk, KEDNY and KEDLI cases.
Most likely a rate-case effective date. Open the bill's message center on page 1; rate-change notices usually flag a "new tariff effective" date.
More U.S. states with energy choice
Same playbook, different utility. Pick another deregulated state to compare utilities, suppliers and switching rules.
