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LIPA trustees briefed on new time-of-use rate plans

LIPA workers become part of a pattern of

LIPA workers become part of a pattern of wires, poles and cranes as the sun sets behind them on Jericho Turnpike in Woodbury. Credit: Julia Gaines

LIPA trustees last week were briefed on programs that could save the utility and its customers big bucks by making it cheaper and easier for ratepayers to shift electric use to off-peak periods.

LIPA hasn’t yet proposed new pricing schemes, which would update its decades-old and tepidly used programs aimed at getting customers to use less energy during expensive peak periods. A LIPA spokesman in a statement downplayed the session as “just part of a larger series of briefings the trustees requested on industry trends.”

But utilities across the county are exploring and implementing various new time-of-use schemes — including some that shorten the window for peak pricing to give consumers more flexibility to save on rates. California is expected to mandate programs as soon as next year.

Only around 2,000 residential LIPA customers have signed up for current time-of-use rates. A form of time-of-use rates are mandatory for the biggest commercial customers.

The newest time-of-use rates are designed to accommodate a new wave of electric customers, including those who charge electric car batteries at night, have smart homes that can pinpoint when specific appliances run, or have home storage batteries that can charge at night and provide their own home power during the day.

One rate now available to PSEG Long Island customers reduces the summertime cost of power to 4 cents a kilowatt hour in the off-peak hours of 8 p.m. to 10 a.m. — a fraction of the nearly 28 cents a kilowatt hour power costs during the rest of the time. PSEG manages the grid for LIPA, which owns the system and sets policies and rate structures.

The idea is to dissuade customers from using appliances during the peak demand times. The rate also includes a special 10-cents-a-day meter charge. (Winter off-peak energy charges go to around 3 cents a kilowatt hour, and peak around 8 cents).

During the briefing, LIPA officials suggested that shortening the peak to between 2 p.m. and 7 p.m. could increase customer participation and satisfaction. A PSEG spokesman said the utility is working with LIPA to study best practices and formulate new rate designs to let customers “save money and use energy more efficiently.”

When Newsday first reported on time-of-use options in Oct. 2009, LIPA’s switchboard lit up . Some customers who hadn’t been aware of the programs wanted to sign up. Others were shocked to discover they’d been time-shifting their electric use for years hoping for a discount, but to no effect: they were on fixed rates.

LIPA used a Con Edison rate calculation to show that a customer could see annual savings of around $442 under time-of-use rates that shifted 70 percent of the use to off-peak. When users shifted 80 percent of their use to off-peak times, they could see annual savings of around $800.

While LIPA has no specific plans for new time-of-use rates, New York State has been eyeing various time-of-use schemes as part of its Reforming the Energy Vision proceedings.

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