LIPA raises rates for second time this summer

Power lines seen at sunrise in Melville on

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

The Long Island Power Authority has raised customer bills for the second time this summer, this time by just over 4 percent for September, citing higher energy costs during the high-demand air-conditioning season.

Ratepayers who use 770 kilowatt hours -- the average for a single-family residence -- will see a $6.21 jump in their September bill. That comes on top of an average $5.71 bill increase in August. All told, bills have risen by more than 8 percent over the two-month period, although LIPA notes that bills have fallen in five of the past eight months.

The increase will register as an 8.7 percent jump in the power-supply portion of customer bills, which make up around half the monthly total. This month it jumps to 10.06 cents a kilowatt hour, from 9.25 cents last month.


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Summer months tend to be the highest usage months for most of LIPA's 1.1 million customers, so the higher power rate isn't sitting well with some.

"It never ends," complained ratepayer Richard Warren, 69, of Coram, a retiree on a fixed income who said lung problems force him to keep his air conditioning on nearly full time in the heat. "You get killed with the central air. It's bad."

The power supply charge changes monthly, fluctuating with the costs LIPA pays for fuel and energy. Prices for energy generally increase during the summer, even as costs for natural gas have stabilized or fallen.

LIPA spokesman Mark Gross said the power supply charge is a "direct pass-through for power purchased on behalf of our customers," and that other utilities in the state do the same. LIPA previously adjusted for fuel costs annually, but frequently over-collected to make sure it wasn't caught short.

Gross said the cost of oil was a major factor in this month's increase.

"The power supply charge for September primarily reflects the use of higher-cost oil-fired electric generation facilities that were necessary during July," he said of plants on and off Long Island.

Gross also noted that July had four days that were among the top 12 for usage in LIPA's 15-year history.

The good news? LIPA's power supply charge has declined for most of this year, and Gross predicted relief could come as soon as next month.

"As we anticipate moderate weather ahead, we will continue to monitor the energy markets and look forward to having some good news for our customers next month," he said.

The September bill increase is the second monthly jump since Gov. Andrew M. Cuomo signed a LIPA reform bill in July. A three-year rate freeze, including for 2013, was a "goal" of the legislation, which turns near-total control of LIPA to PSEG of Newark beginning in January.

Administration officials have said the rate they referred to was the delivery-charge portion of bills, which makes up most of the rest of customers' monthly bills.

LIPA's delivery charge has remained steady for most of LIPA's history, with only two increases of no more than 1.9 percent each, in 2011 and 2012.

While LIPA faces certain new costs next year, including non-reimbursed costs for superstorm Sandy, the authority may also see some budget savings in 2014 depending on whether it decides to fund home solar rebates.

Last week, LIPA announced that the 2013 budget for the program had run out, and it suspended rebates for the balance of the year. It said it may eliminate the residential rebates entirely next year if systems continue to sell well this year without rebates. That would allow LIPA to save around $28 million in next year's budget, when it must begin paying new costs, such as $80 million for superstorm Sandy, that are not likely to be reimbursed by the federal government.

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