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LIPA bills are projected to rise about 2% next year

The majority of the increase is tied to storm costs that were higher than budgeted levels.

PSEG/LIPA power lines in Commack on Dec. 2,

PSEG/LIPA power lines in Commack on Dec. 2, 2014. Photo Credit: Newsday / J. Conrad Williams Jr.

LIPA bills for 2018 are projected to rise around 2 percent, or $3.35 more a month for average residential customers, as the authority budgets more for storms and infrastructure improvements amid lower consumer usage and sales.

Total revenue for the utility in 2018 will decline to $3.52 billion, a reduction of $61 million from budgeted 2017 levels. LIPA projects sales of electricity to decline by 0.7 percent over the next two years, reflecting customer efficiency measures and additional rooftop solar.

The proposed hike includes an increase from a three-year rate plan approved by trustees and the state in 2015, running from 2016 through 2018.

Several annual adjustments on the LIPA bill are behind the largest increases. Of the $3.35 increase, the majority is tied to storm costs above budgeted levels, LIPA said, comprising around $1.92 of the expected increase. LIPA budgeted for $34 million for storm costs this year, but expects to spend more than $59 million by this year’s end. Next year’s proposed budget for storm restoration is $34.8 million.

LIPA customers also will see an increase in the revenue decoupling portion of the bills, which is intended to help the utility pay its costs even as sales decline because of green-energy measures, among other factors. The revenue decoupling charge will add $2.39 to average customers’ monthly bills next year, LIPA projects.

But other charges are expected to decline and help offset some of the increases. LIPA is projecting that the power supply costs, including fuel and power from plants, to decrease next year by $116 million, and another $8 million in 2019. The utility cited lower projected costs for natural gas and power. While power supply charges this year have averaged 10.25 cents a kilowatt hour, LIPA projects it will average 9.9 cents next year.

LIPA plans a number of infrastructure improvements next year that also will influence rates. It will mark the next phase of a proposed smart-meter implementation plan that will see all customers with the advanced meters by 2022. The impact next year for some 50,000 meters is expected to be $312,000, or 2 cents a month, LIPA said.

LIPA next year projects increasing its energy efficiency and renewables budget to $99 million from the $91 million projected for last year (of which the utility wound up spending only $83 million).

LIPA’s three-year rate plan increased the delivery portion of bills a cumulaitive 5 percent from 2016 through 2018. In responses to Newsday questions, the authority said it does not expect to file a new rate case next year, and likely won’t consider a new rate filing until 2019 for 2020.

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