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LIPA asked to broaden energy choice program

A national association of energy supply companies Monday formally asked LIPA to investigate and fix a "moribund" program that is supposed to offer electric ratepayers "meaningful" competitive choices to the utility.

In a petition filed with LIPA, the Retail Energy Supply Association asked the authority to conduct an expedited investigation of the existing program, called Long Island Choice. As it stands, the petition says, the Choice program "offers little in the way of choices for Long Island consumers and lags far behind the successes" the companies have seen elsewhere in the state.

Deregulation of the state energy markets in the 1990s paved the way for energy service companies, also known as ESCOs, to offer customers options to established utilities such as LIPA. The service companies use the wires and gas pipelines of the primary utility, but can sometimes offer discounts by buying power or fuel in different ways than the existing utility. Some offer fixed-rate plans; others purchase renewable-energy assets.

The service companies have long complained about barriers to competition on Long Island, which some attribute to the utility's dependence on high fixed costs and long-term power supply contracts. Two years ago, the association filed comments with the state Department of Public Service when the agency audited LIPA as mandated by state law. The audit, according to association spokesman Bryan Lee, didn't result in material changes to the program.

"Consumers and businesses on Long Island face very high electricity costs and have been economically harmed by their inability to access competitively priced electricity," Christopher Wentlent, the association's New York chairman, said in a statement. Without changes to the program, he said, it is "highly unlikely that a robust market of third-party providers offering electricity services and products to customers will ever develop in the LIPA service territory."

The PSEG Long Island website for the Long Island Choice program lists four energy companies offering residential service. PSEG spokesman Jeff Weir said the utility "will be reviewing" the association's petition and "will respond, as necessary, after our review." A LIPA spokesman didn't respond to a request for comment.

Twenty-three service companies are in the association, including Consolidated Edison Solutions, NextEra Energy Services and PPL Energy Plus.

The association in its petition said deregulation of New York energy markets has led to competition elsewhere in the state, but not Long Island. About 214 electric service companies are eligible to provide electricity service in the state. As of June, they were providing 56.1 percent of the state's electrical service, according to association figures. On the natural gas front, some 70 percent of the market on Long Island was provided by service companies as of April 2012.

The service companies aren't without their blemishes. Lee acknowledged that soaring natural gas prices last winter led service company prices to soar, and customers without fixed contracts experienced inordinate increases.

Last February, the state Public Service Commission imposed a series of measures on energy service companies to improve the transparency of the programs for residential and small business customers. The changes were aimed at allowing better price comparisions, curtailing "inappropriate" energy company marketing activities, and addressing a concern that the programs didn't benefit low-income customers.

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