LIPA power supply charge to increase 27% in Nov.

The power supply portion of electric bills will jump 27 percent in November following a 24 percent increase last month as LIPA and PSEG Long Island work to recover prior months' undercollections.

The increase will add about $15.30 to average bills. The power supply charge will jump to 9.34 cents a kilowatt hour from 7.36 cents. LIPA said most of the 2- cents-per-kilowatt-hour increase in the charge was attributable to undercollections from previous months.

At a trustees meeting Thursday, LIPA officials said the utility was $133 million over budget on fuel and purchased power costs for the year. Chief financial officer Tom Falcone said the utility also is dealing with $38 million in lower electric sales following a cooler summer and LIPA's cash on hand was lower than projected. As a result, LIPA will move up to this month a $675 million debt offering originally planned for early next year.

"That will bring us back above target" for cash on hand, Falcone said, adding LIPA expects to end the year with about $7.7 billion in debt.

At least one trustee was surprised to hear of the power supply increase.

"It appears we are going back again and collecting money we should have collected a couple of months ago," trustee Matthew Cordaro said. "It's a surprise to me because I thought we were keeping pace with the variation of fuel cost."

PSEG declined to comment on the increase.

Meanwhile, LIPA officials said they will conduct an internal review of a large solar project contract in Shoreham, after trustee Marc Alessi raised questions about the process of awarding it. Alessi, a former assemblyman who lives in Shoreham, noted that the signed contract with LIPA and developer sPower incorrectly listed the project's location as Calverton and that the contract was signed by National Grid electric president John Bruckner on Dec. 31, 2013, the last day of LIPA's contract with National Grid.

"I want to know about that because that concerns me," trustee Jeff Greenfield said of National Grid's signature.

"Communities were caught off guard" by the Shoreham project, said Alessi, who has been criticized by the LIPA board after he suggested LIPA or Brookhaven Town could be sued as a result of the project, which the town planning board approved this month.

The trustee meeting was packed with wind-farm supporters who want LIPA to approve a 35-turbine project 30 miles from Montauk Point. State legislators, including Assemb. Steven Englebright (D-Setauket), urged LIPA to move ahead with the Deepwater Wind project to increase the region's renewable energy alternatives.

One speaker, commercial fishing advocate Bonnie Brady of Montauk, spoke against the project, saying it would reduce fishing grounds and scar the sea bottom.

LIPA trustees will vote on a proposal for 280 megawatts of renewable power, which could include the wind farm, in December. Officials said no decision had been made.

Trustees approved a measure to allow LIPA to contract with 12 consulting firms for a range of services, including oversight of contractor PSEG. Cordaro asked that if LIPA spent more than the anticipated $400,000 annually over five years on the contracts, it report back to the board. Staff agreed, and the measure was unanimously approved.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.