Rising winter fuel costs will lead to a spring increase in Long Island Power Authority bills for the second month in a row, an official told authority trustees Thursday.
LIPA controller Kenneth Kane said the authority would begin to make up a $76 million "shortfall" in its fuel and purchased power budget beginning in April. It follows LIPA's implementation of an 8.6 percent bill increase in March tied to $32 million in higher fuel costs in January. That amounted to a $13-a-month increase for customers with a $150 monthly bill.
LIPA last October switched to monthly adjustments in its power supply charge, after years of doing it annually and then quarterly. The switch means bills can drop or rise month to month in amounts not previously seen on annually fuel-adjusted bills.
LIPA in an email said it has not yet calculated how much bills will increase in April, if at all. Bills are mailed to customers on the first of the month.
The increase at LIPA comes as National Grid's natural gas division said it expects the cost of gas for its Long Island customers to decline by a nickel for each decotherm of gas used starting in April. National Grid spokeswoman Wendy Ladd last month said the decline follows an increase of 13 cents per decotherm from February to March. Average monthly bills in March were around $162, she said.
Meanwhile, LIPA faces new costs after deciding this week to switch gears on a new computer system for tracking outages during storms and other events on the electric grid. At the trustees meeting, LIPA chairman Lawrence Waldman said LIPA would move ahead with a recommendation by PSEG to use that company's outage management system when PSEG takes over the electric grid in January.
Waldman said the cost of the PSEG system would be between $20 million and $30 million. He said he didn't have an estimate of how much LIPA had already spent on implementing a new system from another supplier. LIPA for more than a year has been working to install a system from Georgia-based software company Efacec Advanced Control Systems. Rob Sadler, marketing manager at Efacec, said, "We've not yet been informed of any official decision on LIPA's part to change direction."
Waldman said there would be "no direct rate impact going forward" for switching to the PSEG system, saying the one-time cost would be factored into the PSEG transition budget, which is $14 million. He said PSEG's system would "help improve the information available to customers" in storms and ultimately result in "better customer satisfaction."
For 2013's storm season, LIPA will continue to use the highly criticized system National Grid and its predecessors have long used. Waldman said the system, "coupled with other improvements" was "adequate" for the upcoming storm season.
Trustees also approved a plan for LIPA to recover some $80 million in costs from superstorm Sandy from ratepayers starting next year. LIPA expects 90 percent of the $800 million plus in uninsured costs to be picked up by federal disaster aid. The $80 million, to be recovered over 10 years, will amount to around 30 cents a month on average bills, LIPA said.