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LI can't afford LIPA-PSEG rate hike: AARP study

A request by LIPA and PSEG to hike

A request by LIPA and PSEG to hike electric rates will further stress a core of Long Island's aging population, AARP said in a study released Monday, June 29, 2015. Credit: Newsday / Thomas A. Ferrara

LIPA and PSEG's request for an average 3.2 percent rate hike over three years will further stress a core of aging Long Island customers who are already struggling to pay the nation's third highest electric rates, AARP said in a study released Monday.

Members of AARP are expected to rally at LIPA and PSEG Long Island's Uniondale headquarters Tuesday to protest the hike. Nonprofit AARP advocates for seniors older than 50, and claims more than 600,000 members in LIPA's territory.

AARP is calling for the LIPA board to reject LIPA and PSEG Long Island's average 3.2 percent rate increase for 2016-18, arguing that the Department of Public Service's recommendation to chop the rate hike by 37.2 percent should be "a starting point" for further cuts.

In a study prepared with watchdog New York's Utility Project, AARP found that the economic circumstances of more than 160,000 homes in the LIPA territory have "deteriorated sharply" between 2009 and 2013, with more on public assistance and unemployment up 45 percent. It found more than 250,000 LIPA-territory households -- around a quarter of the total 1.1 million customers -- earned less than the statewide median income of $58,003.

"People on Long Island cannot afford this rate hike," said AARP New York's legislative representative, Bill Ferris.

Nearly 130,000 residential customers, or more than 12 percent of LIPA's home customers, had accounts in arrears for more than 60 days as of Dec. 31, 2014, owing a total of $90 million, or an average $700 per customer, AARP said. That's up from the $68 million owed in 2009, or $520 per customer.

PSEG hadn't seen the study and declined to comment on it, but said it has already provided "significant detail" on why a "modest" rate hike is needed. PSEG said the hike will help provide "safe and reliable" service while allowing for infrastructure and customer service improvements.

AARP also wants the LIPA board to reject a planned doubling of the fixed monthly service charge for ratepayers, saying it would hit smaller users harder. AARP also wants LIPA to curtail plans to recoup fixed costs when sales decline and to place a $15 million cap on another recouping mechanism called a delivery service adjustment.

AARP noted that more than 17,000 LIPA residential customers were terminated in 2014, or around 46 accounts per day. Many are reinstated after working out payment plans. The group also found the average residential account balance subject to a deferred payment agreement rose 20 percent between 2009 and 2014 to $510.

The total dollar amount owed by customers on deferred payment plans also rose 20 percent in that time, to $65 million from $55 million. Older customers make up around a quarter of LIPA's service territory, and those on public assistance jumped 42.8 percent between 2009 and 2013, to 84.1 percent, according to AARP, citing government statistics.

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