LIPA to reduce power supply charge by 6 percent

Lower-than-projected natural gas prices will lead the Long Island Power Authority to reduce its power supply charge by 6 percent to its lowest level in five years.

Effective June 1, average bills will see a reduction of around $5 a month, LIPA said last night, the equivalent of a 3 percent total bill reduction.

It's the third power-supply charge reduction by LIPA in the past year.

Outgoing LIPA chief executive Kevin Law said the utility's 1.1 million customers are benefiting from natural gas prices that have stabilized at lower levels than it projected when the 2010 budget was drawn up last November. "It's good news for our customers," he said. "They're getting the benefit of lower fuel costs."

Fuel oil has been somewhat volatile this year and last, but because most regional power plants have dual-fuel capability, they have operated on natural gas almost exclusively for more than a year.

For LIPA customers, the bill reduction amounts to between $4.70 and $5, Law said, reducing the average bill to around $151 from $156.