The state Department of Public Service has begun a review of the Long Island electricity market with the aim of addressing the region’s relative lack of retail competition in a market controlled by LIPA.

The state agency, in a filing last week, said it will investigate the “potential benefits” of competition in the Long Island Power Authority service territory and the “barriers” that have blocked energy service companies from expanding here as they have elsewhere in the state. DPS will seek comments from interested parties, including ratepayers, through April. (Comments can be emailed to secretary@dps.ny.gov)

“While the rest of New York state electric customers already have the option to participate in a competitive retail marketplace, retail customers in the LIPA service territory face barriers that have prevented competition from developing,” the PSC said in a recent filing. The agency intends to “investigate potential benefits to customers and examine what reforms, if any, are needed to achieve them.”

dataSearch LIPA payrollSee alsoRead the PSEG report on LIPA's excess power supply

Advocates for service companies welcomed the department’s review, which will include “interactive discussions” and a set of recommendations to the LIPA trustees.

“There’s a lack of meaningful competition on Long Island,” said Bryan Lee, spokesman for the Retail Energy Supply Association, a national group of energy service companies. “It just doesn’t exist.”

The group represents dozens of so-called ESCOs, or energy service companies, which have operated nationwide and across the state in the aftermath of the degregulation of electricity markets.

advertisement | advertise on newsday

More than a million New York homes and businesses use energy service companies to supply electricity or natural gas services. Some offer special fixed rates, others offer green-energy options and other services. On Long Island, only seven companies are listed in PSEG’s “Long Island Choice” program, where ESCOs have long complained that LIPA’s structure makes competing difficult or impossible.

Lee of RESA said a primary limitation is the utility bill, which he said doesn’t break out enough information for customers to make an informed decision on whether to switch to an ESCO. For one, it doesn’t specifically break out the cost of purchasing generated energy. The power supply charge on PSEG bills encompasses a range of charges, including capacity, energy and fuel costs.

Lee said energy service companies also have had difficulty getting information about customers and their usage patterns in a way that would allow ESCOs to design offerings and compete.

“To level the playing field, the suppliers need to have access to information that is only available to the utility right now,” he said.

PSEG Long Island spokesman Jeff Weir said the company was “eager to work with everyone to improve the Long Island Choice program,” but declined further comment until the end of the comment period. A DPS official declined to comment and a LIPA spokesman couldn’t be reached.