PSEG Long Island will end the year with another increase in the power supply charge, hiking average bills by around $10.50.
The December charge jumps to 10.7 cents a kilowatt-hour from November's 9.4 cents, a 14 percent increase. For the year, the charge averaged 9.4 cents, and ratepayers saw increases in seven of the past 12 months. Last year, the power supply charge averaged 9 cents.
Ratepayers who use 775 kilowatt-hours will see the power supply charge portion of their bills jump to $82.93 this month, from $72.45 last month. The power supply charge makes up about half the bill. The delivery charge is expected to remain the same through 2015, but it is largely expected to increase when PSEG makes its three-year rate application to the Department of Public Service in February for the 2016-18 period.
The December increase follows a combined hike of more than 50 percent in the previous two months and is based largely on what LIPA said were prior months' undercollections. The charge had dropped to an all-time low of 5.9 cents in September.
LIPA had maintained previously that the power supply charge was a pure pass-through of fuel and power costs, but in recent months has acknowledged that undercollections from prior months and a cooler than expected summer played a role in the increase.
LIPA trustee Matthew Cordaro said use of the charge to make up for prior months' undercollections wasn't intended when LIPA moved to month-to-month power supply charge adjustments. LIPA previously altered the charges annually, then quarterly.
"I'm still surprised at how they've been able to manipulate this charge after the fact," he said. "The design was always to keep it in step with . . . [fuel and power costs] as they changed. It was never intended as a tool to play catch-up months down the line."
In a statement, PSEG said the "single biggest driver" in monthly adjustments to the charge was the price of natural gas.
"The second biggest driver is the balancing credit or surcharge based on actual customer usage and the associated actual cost of the electricity purchased to meet that demand," which "ensures that customers will only pay for the actual costs incurred," PSEG said.