LIPA to cut 4.3% from electric bills

The Long Island Power Authority will chop a record 4.3 percent from electric bills next month, putting an average $6.59 back in the pockets of typical ratepayers thanks to falling natural gas prices.

The reduction will more than eradicate a 1.5 percent hike in March, and bring overall rates to their lowest level in five years, said chief operating officer Michael Hervey.

"The real drivers are a plentiful gas supply and mild winter," resulting in natural gas prices that are "very, very low right now," Hervey said.

The biggest on-Island power plants can operate on both natural gas and fuel oil, but they've operated mainly on gas for more than a year as oil prices have surged.

The reduction helps reverse several years of spiking fuel surcharges during the mid-2000s -- increases that angered customers and helped drive LIPA rates to among the highest in the country.

A business with a $2,000 LIPA bill would see a cut in excess of $85 a month, while residential customers with $150 monthly bills would see a drop to around $143.40.

One customer who has grown accustomed to increases expressed a level of wariness.

"I'll believe it when I see it," said Pat Raynor, a resident of Leisure Knoll, a retirement community in Ridge whose residents have electric heat -- and high LIPA bills. "Usually they give us a reduction, then raise the bills a month later. I don't get too excited anymore."

LIPA, which adjusts bills based on fuel and other costs quarterly, will soon examine the prospect of month-to-month adjustments for the power supply, something most other utilities in the state already offer, Hervey said. LIPA used to adjust rates annually, often overcollecting more than $100 million from ratepayers, only to return it incrementally the following year.

The 1.5 percent increase in March, which shows in the fixed service portion of the delivery charge on bills, was largely driven by higher taxes. LIPA in the past year has filed tax grievances for all its properties and National Grid plants -- a measure it hopes could drive down those costs, too, over time.

Hervey urged customers who continue to see high or spiking bills to consider energy efficiency programs and to closely monitor the energy usage of home appliances. The authority has rolled out new programs that give commercial customers rebates on 75 percent of power-saving measures such as efficient lighting.

LIPA also in recent weeks replenished its budget for commercial solar installations with a $3 million infusion. Rebates for the popular program have fallen to $1.30 a watt from a previous $1.75 a watt due to its popularity.

Separately, in a development that could help cut storm restoration costs over the long term, LIPA is expected to get new funding for its efforts to strengthen the local electric grid following large-scale system damage from Tropical Storm Irene.

The Federal Emergency Management Agency is reviewing LIPA's request for a 75 percent reimbursement for the $176 million storm restoration cost without "any significant problems or issues," said Christopher Holmes, chief of public assistance for New York State Emergency Management Office.

"They may get some additional funding on top" of the Irene reimbursement, to strengthen the system, said Holmes, who declined to specify an amount. The objective: "To prevent it [the Long Island grid] from being damaged more next time."