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LIPA: Natural gas price spike will boost electric bills


A "spike" in the cost of natural gas will trigger an average $13 increase in the average electric bill next month, LIPA said at a trustees meeting. (Nov. 12, 2012) Credit: AP

A "spike" in the cost of natural gas will trigger an average $13 increase in the average electric bill next month, LIPA said at a trustees meeting Thursday.

"The March charges for fuel and purchased power will reflect a pass-through adjustment of $13.16 per average residential customer compared to February, which primarily reflects natural gas price spikes experienced by all regional utilities over the last two months as a result of the unseasonably cold weather," the company said in a statement in response to Newsday.

LIPA didn't formally announce the increase at the meeting, but controller Kenneth Kane mentioned it in response to a question by trustee Matthew Cordaro. Fuel costs were up $40 million.

The authority continues to work to recoup customer payments as bills for superstorm Sandy come due. To date, National Grid has filed around $274 million in invoices for the storm that LIPA has begun to screen and pay. Total arrears are $146 million, and about 221,600 customers are behind in paying their bill, most 90 days late.

"We have some issues with our customer receivables," Kane said.

LIPA Thursday said the storm's cost was about $906 million, down from the previous estimate of $933 million. Insurance coverage could also lower the cost by as much as $100 million.

But LIPA is facing a tighter cash position. LIPA at February's end had $280 million in cash, and it plans a $500-million credit offering this month.

National Grid said at the meeting it is preparing a set of guidelines for LIPA to work with local governments to inspect homes if flooding leads the utility to shut off power.

Trustee Laurence Belinsky expressed concern that the 2013 storm season was approaching and LIPA/National Grid hadn't already finalized the procedures and communicated them to local governments.

"If we have another storm surge, we leave ourselves open to criticism that it's a year later and we haven't gotten closer to closure on this," Belinsky said.

Nicholas Lizanich, vice president of LIPA, said National Grid has provided a "draft of a proposed process that they would like to see us follow and have discussion with the various counties. But the discussions have yet to take place." He said the goal is to have them in place by June 1.

During Sandy, LIPA was forced to devise a plan to inspect potentially flooded homes after de-energizing 100,000 of them, mostly on the South Shore. Many homes without damage remained without power for a week or more.Michael Taunton, LIPA's chief operating officer, said LIPA would review the proposed plan when completed. Asked if he expected municipalities to accept it, Taunton said, "We hope so."

Belinsky said, "We can't go into another storm season relying on LIPA and National Grid" to do the inspections. "It's not our expertise."


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