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LIPA OKs 2018 budget, solar compensation plan and borrowing

Trustees approved a budget that calls for $3.52 billion in revenue and an increase in delivery and related charges on customer bills of $7.41 a month.

LIPA trustees on Tuesday approved a 2018 rate increase, gave the thumbs-up to a new method for compensating commercial solar energy projects and greenlighted a plan to issue up to $880 million in borrowing next year, when authority debt is projected to exceed $8.1 billion.

In a sometimes-spirited board meeting, trustees approved a 2018 budget that calls for $3.52 billion in revenue — a decline of $65 million from the 2017 budget — and an increase in delivery and related charges on customer bills of $7.41 a month. The utility expects power-supply charges could decrease an average $4.06 a month next year, lowering LIPA’s projection for an overall bill increase to around $3.35 a month, or 2 percent. In all, LIPA projects the average monthly customer bill next year will increase to $158.61, compared with $155.26 this year.

The relatively routine measure appeared ready to sail to approval when one board member, Matthew Cordaro, indicated he would vote against it, saying he was “disappointed the process couldn’t come up with a way to eliminate” the increase.

Several other board members and a LIPA official said that while they did not favor an increase, the “modest” hike was a small price to pay for the authority’s ambitious 2018 plan for projects such as automated meters, grid upgrades and customer satisfaction measures, all while increasing LIPA’s standing with Wall Street.

“We did try that method” of compromising customer service for lower rates, said LIPA chief executive Tom Falcone. “It did fail utterly and completely,” landing LIPA with poor customer satisfaction grades that were “bad, back to the beginning of surveys.”

On another subject, trustees ultimately sided with a LIPA recommendation to adopt a new plan to compensate commercial customers for the green energy they produce using a complex set of calculations instead of the popular net-metering scheme currently in use.

In recent weeks, LIPA staff had worked with the Long Island Solar Energy Industry Association and others to delay adoption of the new scheme by four months, to May 1.

While representatives of several solar-energy firms at the meeting spoke in favor of the delayed rollout, just as many were opposed, including Scott Maskin, chief executive of SUNation Solar Systems, one of the region’s largest solar installers.

“It will cost jobs and it will crush the commercial solar market,” Maskin said. “We need time . . . May 1 is not enough time.”

Trustee Jeff Greenfield offered a measure that would push introduction to July 1. It was defeated, with the board ultimately approving the resolution to roll out by May 1, with the caveat that trustees would review progress of state tools for the program at their March board meeting.

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