LIPA proposing menu of new rate options to discourage peak usage

Long Islanders willing to shift their electric use to off-peak hours could soon have five new rate plans to choose from to lower their bills under a proposal being considered by LIPA trustees.

The new plans, which also work to discourage peak-hour use by raising the rates during peak-usage times, could save customers upward of $75 a year, LIPA and PSEG Long Island said. Bills can increase, however, if customers don't stick to the plan and use too much power during peak times.

The newly proposed time-of-use rates offer discounts by hour, and by season, for ratepayers who can delay a portion of their electric use to the off-hours to receive discounts on off-peak rates. Peak-hour rates, however, increase correspondingly, in some cases nearly double normal rates.

The proposal must be approved by LIPA's board, after public hearings, and could be in place next year.

"This is an opportunity to offer customers more choices," said LIPA chief executive Tom Falcone, adding the utility was just "at the beginning of it. Over time you'll see us have more" time-of-use plans.

According to PSEG figures, a customer who shifts just 6% of peak energy use to off-peak would see savings on the delivery portion of their bills of between $36 and $45 a year; those who shift 10% could save between $62 and $75 a year.

PSEG already has a more restrictive time-of-use offering called Power to Save, but it's been lightly subscribed, in part because the off-peak period was too limited, and the potential costs to customers greater. The program contains a caveat that customers can end up paying more under the program, depending on total usage during the peak and off-peak times.

"In addition to giving customers more options [to] control their energy use, these rates will also help in reducing the peak load of the utility," LIPA said in a written proposal. Cutting peak-time usage helps lower costs by reducing the need for electricity from plants and other sources when it’s most expensive.

Three of the four new residential time-of-use rates and the single small-commercial rate will have three separate daily periods: peak, off-peak and super off-peak. All will vary over three seasons: summer, spring-fall, and winter, with the summer peak rate the highest.

LIPA will also add a fourth residential rate that has just two daily rate periods: daytime and nighttime, with no seasonal distinctions for rates. That rate is designed to address electric vehicle owners, to encourage charging overnight.

The new rates, years in the making, are being rolled out as PSEG has installed some 700,000 smart meters to LIPA’s 1.1 million customer base.The smart meters give the utility the ability to precisely monitor when customers are using electricity, essential for time-of-use rates.

The most costly electricity under the new rates is for between 3 and 7 p.m., during the summer months. Off-peak hours generally last from 7 to 10 or 11 p.m., and there’s also a "super" off-peak for those willing to shift use to the overnight hours of from 10 or 11 p.m. to 6 or 7 a.m.

Rates for peak-hour summer usage would be around 1.8 times higher than the off-peak rate, while the super off-peak rate would be about 0.6 times lower than the standard off-peak rate. Specific rate amounts weren't listed because they can vary with power supply charges during the year.

PSEG's existing Power to Save rate has a winter/summer peak rate of 47 cents a kilowatt-hour, and an off-peak rate of 15 cents/kwh. The peak period runs year-round from 2 to 7 p.m. On weekends, the rate shifts to 15 cents all day, year-round. Regular customers pay around 21 cents per kwh for power.

Through 2023, PSEG expects to spend around $19 million implementing and operating the program, which has been reviewed by the state Department of Public Service.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.