Hearings on LIPA's planned rate hike set

Ratepayers across Long Island Wednesday will get the chance to weigh in on LIPA's $3.73 billion operating budget for 2012 -- one that proposes a 1.5 percent rate increase.

Bills for average residential users would jump $2.24 a month starting next March if the increase is approved.

In presentations in Uniondale and Central Islip, LIPA officials will make their case for the rate increase, citing a $51.7 million increase in property taxes in Nassau and Suffolk, $25 million more on energy efficiency and renewable energy programs, and a $6 million increase for storm response.

The budget also includes an increase of $24.4 million for National Grid to manage the local electric grid. In all, LIPA customers will pay National Grid $751.9 million next year for grid management, power plants and energy management.

The hearings Wednesday are at 10 a.m. at the Omni Teleconference Center, 333 Earle Ovington Blvd., Uniondale; and 7 p.m. at the Touro Law Center Auditorium, 225 Eastview Dr., Central Islip. Additional hearings are scheduled for Dec. 6.

LIPA in budget documents said the "relatively modest increase results primarily from the significant growth of costs that are largely contractual or regulatory in nature."

Next year's proposed bill increase comes despite an $87 million drop in the anticipated cost of fuel next year, mostly natural gas. (Last year's fuel costs were offset by $39 million resulting from the National Grid purchase of KeySpan.)

Because of required hearings, ratepayers won't see an increase until next March, when the fixed portion of the delivery charge will jump 1.68 percent, negating the 0.49 percent cut in the power supply charge reduction in January.

Comments about the budget can be emailed to LIPA at: 2012budget@lipower.org.

The budget includes around $1 million for six new employees for LIPA's already budgeted 107-staff roster, and some $17 million to transition to a new business model. It also includes costs for outside consultants to review a list of 45 new energy projects proposed for the region. LIPA expects customers to use 3.9 percent more electricity next year, to 20.6 million megawatt hours.

One watchdog group said the budget would spend too much on programs it deems ancillary.

The LIPA Oversight Committee of the Suffolk Legislature suggested "belt tightening" is in order at LIPA, starting with efficiency and renewable programs. "In the midst of a recession-damaged economy and [with LIPA] having among the highest utility rates in the nation, can Long Islanders really afford this?" the committee said Tuesday in a published note, referring to additional spending in the budget.