LIPA 2014 budget includes rate freeze, say officials

Power lines seen at sunrise in Melville on Power lines seen at sunrise in Melville on Jan. 11, 2013. Photo Credit: Newsday / Karen Wiles Stabile

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The Long Island Power Authority will present its 2014 budget, which will include a rate freeze, at a workshop in Uniondale Tuesday, officials said.

In the weeks leading up to the budget's release this week, LIPA officials said they were working to keep costs in line to make good on Gov. Andrew M. Cuomo's promise of a rate freeze for the next two years.

The freeze applies only to the delivery-charge, the fixed cost of getting energy to customers, which represents about half of LIPA bills. The power supply charge, covering fuel and energy purchases, constitutes the other half. Trustees will vote on the budget Nov. 26.

"The only thing you can do when revenue doesn't go up is cut your costs and that's something we continue" to do, said LIPA chairman Larry Waldman.

Waldman called achieving the 2014 rate freeze a "definite challenge" given that LIPA saw revenue decline about 1 percent this year. Next year's budget calls for an increase in sales, but of less than 1 percent.

Waldman became LIPA chairman in December in superstorm Sandy's wake, and is credited with helping stabilize the utility amid leadership and financial problems. He said he has told Cuomo he will step down as chairman next month. Cuomo and legislative leaders will appoint a new nine-member board in December.

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Waldman said LIPA in 2014 expects to achieve savings from refinancing some $1.5 billion in bonds at lower interest rates, while looking to its new electric grid manager, PSEG-Long Island, to find operational efficiencies.

A spokesman for Cuomo said the rate freeze was a priority because LIPA customers were "paying too much for too little." His administration helped by getting $72 million to fortify power substations, a cost ratepayers otherwise would have borne.

The rate freeze is "a key part of giving Long Islanders a utility that serves its customers effectively and is ready for future disasters," Cuomo spokesman Matthew Wing said in a statement.

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The LIPA sales decline for 2013 limited available revenue to help pay for new expenses, such as unreimbursed Sandy costs, Waldman said. One LIPA trustee expressed concern as late as Monday that the need to cut would disproportionally impact green-energy programs.

"I'm very concerned that there may be an effort to make cuts in renewables and efficiency" programs, trustee Neal Lewis said.PSEG-Long Island, the Newark-based company that is taking near-total control of the LIPA system beginning in January, has been working with LIPA on the budget and will be at the work session Tuesday, said Karen Johnson, PSEG spokeswoman.LIPA will unveil the budget at a 2 p.m. session at its headquarters in Uniondale; two "public input" sessions, one in Nassau the other in Suffolk, will follow Thursday.

Ratepayers can attend Tuesday's workshop and the input sessions, but will be permitted to provide comments only at the latter. The public input sessions are to be held from 10 a.m. to noon at the H. Lee Dennison Building, 100 Veterans Memorial Hwy., Hauppauge; and from 6 to 8 p.m. at LIPA headquarters, 333 Earle Ovington Blvd. (fourth floor board room), Uniondale.

Ratepayers can submit comments on the budget via email at 2014budget@lipower.org.

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