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LIPA to consider rule change on contested rates

Jamie Hirsch, president of Structural Industries, shows his

Jamie Hirsch, president of Structural Industries, shows his PSEG Long Island bill at his office in Bohemia, on July 14 2015. Credit: Ed Betz

LIPA will consider a board member's request to review and possibly change its rules to allow hundreds of customers stuck in a contested rate class to be switched to a more appropriate one to avoid overcharges.

In a statement, the authority said it would consider making the change even as it noted there was "analysis required" to determine if a short-term fix was "technically and legally feasible."

Small businesses and schools in the contested rate class 285 are barred by a "no-exit" clause from ever being assigned a new rate, even though some don't meet its minimum power-use requirements. Misclassified customers say the utility owes them tens of thousands of dollars in refunds, which PSEG, which manages the grid for LIPA, is contesting.

On Monday, LIPA trustee Jeffrey Greenfield said he was surprised to first read about the rate controversy in Newsday on Sunday, and requested that it be reviewed and possibly changed expeditiously, as early as an Aug. 7 board meeting. More than 600 customers may be misclassified and forced to pay a $10 daily fixed charge.

The state supports changing the rules.

"Going forward, everyone agrees that removing the no-exit clause makes sense," said Julia Bovey, director of the Long Island office of the Department of Public Service.

One electric customer who said he strongly supports the rule change is Jamie Hirsch, owner of Structural Industries, a Bohemia frame-maker. When a slowdown in business left the company in arrears of around $20,000, PSEG in February cut off electric service to the building, Hirsch said.

He attempted to work out a 12-month payment plan, but he said PSEG representatives were unresponsive, so he contacted Bovey's office.

That agency found that Structural had been placed on the wrong rate, instructed PSEG to transfer Hirsh to the correct one and credit him for six years of overcharges. PSEG is contesting the finding.

"We don't believe he was misclassified," PSEG spokesman Jeff Weir said.

Hirsch said the fact that he was shut off for improper costs that likely exceeded his arrears was "absolutely disgraceful. It's hard enough to be in business and to manufacture on Long Island," he said.

Responded Weir, "We take every customer complaint seriously and we do everything in our power to provide our customers with satisfaction."

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