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Customers pan LIPA billing plan

Peter Manger and Rosanne Manger sit with their

Peter Manger and Rosanne Manger sit with their LIPA bills in their Lae Grove home in Lake Grove. (April 6, 2013) Credit: Ed Betz

Peter Manger of Lake Grove doesn't like the idea of gambling on his electric rate.

Yet that's how he views the way LIPA is applying a recently enacted monthly billing plan that fluctuates widely up and down based on the authority's cost of fuel.

LIPA reads his meter only once every 60 days, and bills him for an estimate in the first month. So there's a good chance that at least part of his bill will be based on an incorrect rate -- too high or too low -- when LIPA reconciles the usage in the second month after reading the meter.

For example, a customer with bimonthly estimated billing pays for 500 kilowatts of usage at the November power supply charge of 7 cents based on an estimated reading. He then gets a December bill showing 1,500 kilowatt hours of actual (metered) usage -- the amount not previously billed in November, plus all of the December usage.

The problem: There's no way to know how much of the usage took place in November and should have been charged at the lower rate. So the entire amount is billed at the December rate of 8.5 cents. LIPA said most customers have their meters read every 60 days.

For Manger, the issue is that if rates are higher when the meter reading is done, customers wind up paying a higher rate for what should have been lower-cost usage in the previous month. "For some people it could be a substantial amount of money," Manger said. "This whole system is really unfair."

LIPA last week acknowledged that the estimated bills are an issue with the monthly change. LIPA said it applies a series of algorithms to its bill calculations to minimize the impact and to get as close to actual usage based on history as possible. In any case, LIPA said the divergence can just as often work in customers' favor -- the rate can be lower in the month when the meters are read.

But Manger isn't buying it. "I don't gamble on my electric bill -- this isn't a casino," he said. "I want to pay for what I use."

From November 2012 to this month, the power supply charge rose in four months and dropped in one.

After LIPA reps at National Grid were unable to satisfactorily address his complaint this week, he was advised to call in a meter reading himself -- something he said he'll do from now on.

The problem became apparent when LIPA switched to monthly adjustments for fuel last October. Newsday this week showed that LIPA has experienced wide price swings in applying the power supply charge -- with the rate leaping more than 50 percent between November and March. LIPA blamed the fluctuations on spiking fuel costs.

LIPA said that it follows Public Service Commission protocol in meter readings that span two- or three-month periods, and that "all utilities have this billing issue for every customer." LIPA also said it does a level of averaging so that bills are not entirely skewed.

"It is true that LIPA has no way of knowing how much was used in each calendar month, just as we don't know that for almost all of our customers," spokeswoman Elizabeth Flagler said in the email. "So for customers like Mr. Manger, we estimate his usage in the 'off-month' based on his historic usage patterns and the weather conditions. That is the best estimate we are able to prepare, absent a meter reading, and we think it's more accurate than the simple pro-ration based on number of days."Flagler added, "We want Mr. Manger and all of our customers to know that the situation flows in both directions. There will be months where the power supply charge is falling, and there might be an allocation to the less expensive month."On average, she said, "LIPA believes that the situation will balance out over a calendar year and there is no inherent bias in the process."

Flagler said LIPA has considered eliminating the problem entirely by moving to monthly meter readings for all customers -- which would incur large costs.

"This would approximately double the number of reads we need to perform each month, and add millions of dollars to our costs, which would have to be paid for by our customers," she said. Because meters are read on 20 different days each month, and billing dates vary through a month, it averages rates for each month based on the billing date."Between any two meter readings or billing dates, we count the number of days in each month or period, and then average the appropriate rates based on the number of days in each month,"the utility said.

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