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LI state senators unanimously oppose electric rate hike

A PSEG Long Island crew performs work on

A PSEG Long Island crew performs work on Montauk Highway in West Islip on July 10, 2014. Credit: Newsday / John Paraskevas

The Long Island State Senate delegation on Thursday came out unanimously against a rate-hike request by PSEG Long Island and LIPA, saying the average 3.2 percent increase is too high even as LIPA's $7.6 billion debt burden also rises.

In a letter to top officials at the state Department of Public Service and the utilities, the nine Republican state senators from Nassau and Suffolk counties opposed the three-year increase, and asked for an extension of rate proceedings that now are concluding so more hearings and comments can be submitted.

"Ratepayers on Long Island simply cannot afford these increases," the letter states.

The potential impact of the letter on the rate proceedings was unclear.

While public comments in the rate case will be accepted through Saturday, most formal submissions concluded this week. Two administrative law judges are expected to issue a draft recommendation on the rate request in the coming weeks, and LIPA trustees will vote on a recommendation before year's end.

Sen. Kenneth LaValle (R-Port Jefferson) said he and the other senators had worked on the joint letter since the end of the legislative session in June. The letter has been submitted as part of the rate proceeding, and LaValle said he expects it to be considered by the judges.

"I don't know how you do not consider what nine senators are saying," LaValle said.

The letter also was signed by Senate Majority leader John Flanagan (R-East Northport), Sen. Thomas Croci (R-Sayville), Sen. Phil Boyle (R-Bay Shore), Sen. Carl Marcellino (R-Syosset), Sen. Kemp Hannon (R-Garden City), Sen. Jack Martins (R-Mineola), Sen. Michael Venditto (R-Massapequa) and Sen. Dean Skelos (R-Rockville Center).

PSEG Long Island spokesman Jeff Weir said, "We take the concerns of our legislative leaders seriously. We will review the letter in detail and will respond as appropriate."

A LIPA spokesman declined to comment.

The letter takes issue with mechanisms the utilities have built into the rate proceeding that will allow them to recover certain costs over the next three years if future conditions differ from current assumptions.

For instance, if storm costs, savings from a planned debt offering and negotiations with unions over a future contract change from the current budget, the utilities would be able to increase rates to recoup those costs.

Concerns about rising debt prompted the senators to note that they didn't agree to the creation of a new debt authority for LIPA "merely to allow LIPA to refinance existing debt. The goal was to rein in LIPA's overall debt to reduce pressure on rates."

The Senate voted unanimously to pass the Reform Act in 2013.

PSEG is seeking to collect $375 million in total revenue from ratepayers from 2016 to 2018 through rate hikes of 3 percent to 3.4 percent. Weir said the "modest" increase "will create a safer and more reliable, resilient and efficient electric system."

The state Department of Public Service has requested an $85 million reduction in that amount, arguing that PSEG and LIPA have requested too much for items like utility pole inspections and tree trimming than is necessary.

DPS Long Island director Julia Bovey said the senators' letter "will be reviewed" as part of the department's consideration of the rate request. "The issues the letter raises will be considered by the department in the development of its final recommendations due to be submitted to the LIPA board by Sept. 28 as required by the LIPA Reform Act," she said.

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