The familiar hum of refrigeration units at Crooked Cattle, a small butcher shop in Syracuse, could soon become a more painful sound for owner Will Fudge. Like thousands of other New York small business owners, Fudge is bracing for yet another financial hit as National Grid’s proposed rate increases loom on the horizon.
“We’re already paying $1,500 a month just to keep our coolers running,” Fudge explains, gesturing toward the well-stocked meat cases that are essential to his business. “If rates go up another 20 percent, that’s easily hundreds more each month that comes directly from our bottom line.”
National Grid’s proposal before the New York Public Service Commission would raise electricity rates by approximately 20% over three years, with the first increase scheduled to take effect in 2025. For businesses operating on thin margins, this represents far more than a minor adjustment to operating costs.
At Flower Skate Shop in Syracuse, owner Jason Kringer is equally concerned. “Every extra dollar we pay toward utilities is money we can’t invest back into inventory or our staff,” Kringer says. His shop, which has become a community hub for local skaters, already allocates roughly 15% of monthly operating expenses to energy costs.
Economic data confirms these small business concerns aren’t isolated cases. According to the U.S. Energy Information Administration, commercial electricity rates in New York are already approximately 46% higher than the national average, placing New York among the five most expensive states for business energy costs.
The timing couldn’t be worse for many small businesses still navigating post-pandemic recovery. The Federal Reserve Bank of New York’s Small Business Credit Survey released in March reveals that 65% of New York small businesses reported their financial condition as “fair” or “poor,” compared to 58% nationally.
“We’re seeing a troubling convergence of challenges,” notes Dr. Eleanor Weiss, senior economist at Syracuse University’s Maxwell School. “Rising energy costs, persistent inflation in other expense categories, and tightening credit conditions are creating a perfect storm for small businesses with limited cash reserves.”
For consumers, these increases will eventually translate to higher prices. Gary Decker, owner of Creative Corner, a craft supply store operating in Onondaga County for over two decades, explains the difficult calculus: “We’ve absorbed three rounds of supplier price increases in the last year alone. The energy hike means we’ll have no choice but to raise prices again, and I worry about losing customers who simply can’t afford it.”
The proposed rate structure has drawn criticism for its disproportionate impact on small commercial users compared to larger industrial customers. Analysis from the Consumer Power Advocates, an organization representing institutional energy consumers, indicates that small commercial customers could see effective increases of up to 25% when all fees and surcharges are factored in.
National Grid defends the increases as necessary infrastructure investments. In testimony before the Public Service Commission, company representatives cited aging equipment, clean energy transition costs, and grid modernization as driving factors behind the rate proposal.
“We understand the impact on customers and have worked to moderate the size of the increase while still making critical investments in the safety and reliability of our systems,” said Madison Chen, National Grid’s regional director of customer services, in a statement provided to local media.
But for business owners already struggling with a challenging economic landscape, the justifications ring hollow.
“I’ve had to cut my own salary twice in three years just to keep my staff employed,” says Rebecca Ling, who owns a small flower shop in Camillus. “How are we supposed to absorb thousands more in annual energy costs when we’re already stretched to the breaking point?”
The New York Small Business Development Center reports fielding a surge in calls from business owners seeking advice on energy efficiency measures and financial planning strategies to offset the anticipated increases. Their data shows energy costs typically represent between 10-20% of operating expenses for retail businesses in the region.
“We’re advising owners to conduct energy audits, explore potential tax incentives for efficiency upgrades, and carefully model cash flow projections that account for these increases,” explains Thomas Moretti, a business advisor with the center.
Some business owners are considering more drastic measures. A survey conducted by the Greater Syracuse Chamber of Commerce found that 28% of responding small businesses would consider reducing staff hours or positions if utility costs increase significantly, while 18% said they might explore relocating to areas with lower overhead costs.
Public hearings on the rate proposal continue through October, with the Public Service Commission expected to render a decision by early 2025. For business owners like Fudge, the waiting period is filled with difficult planning discussions.
“Do we raise prices and risk losing customers? Cut staff hours? Reduce inventory? There are no good options here,” he says, checking the temperature gauge on a refrigeration unit that now represents both his livelihood and a growing financial burden.
As small businesses across New York prepare for these difficult decisions, many owners share a common sentiment: they’ve weathered economic challenges before, but the relentlessness of rising costs on multiple fronts is testing even the most resilient entrepreneurs.
