The New York Power Authority, responding to complaints of spiking electric bills from Long Island businesses in its ReCharge New York discount power program, said it has instituted a measure to stabilize bills.
But some businesses said the measure didn't go far enough.
NYPA, a supplier of wholesale power to municipalities, businesses and nonprofits throughout the state, administers the program for Gov. Andrew M. Cuomo. It was introduced last year as a way to encourage business growth by cutting power costs. They saw unexpected spikes in their bills in the winter, and said power costs had become unpredictable.
In a letter to businesses Wednesday, NYPA said it would institute a new cap on price increases to help stabilize bills. "Any costs beyond a specific limit would be recovered during those months when commodity prices are lower," NYPA senior vice president James F. Pasquale explained in the letter. "These measures will help even out monthly charges."
About half the energy available for businesses in the July 2012-launched program comes from cheap, stable upstate hydroelectric power sources. The other half comes from state electricity markets, which saw prices spike last winter.
While NYPA has said it would examine other measures, including financial hedging, to lower bills, some said the new cap won't reduce costs.
"Simply leveling out or spreading the [state market power] costs does nothing to lower the eventual costs," said Diamond Kongoletos, president of Holbrook-based County Energy Services, which represents more than a dozen Long Island recipients of ReCharge New York. "This 'balanced billing' approach does not provide true hedging to provide stable pricing and achieve the overall goal of ReCharge NY."
The more than 100 Long Island companies in the program saw winter electric prices jump tens of thousands of dollars and complained of the unpredictable nature of the program. After a stable spring and early summer, energy costs are spiking again, NYPA said.
"While it is encouraging that NYPA has taken steps to cap our monthly charges, no steps have been taken as of yet to limit the total electricity costs," said Michael Petrucelli, chief financial officer of Uncle Wally's, a baked goods company in Shirley. "The market component of the ReCharge NY program is still uncertain for businesses when forecasting their annual costs, particularly during the peak demand."Richard Wenner, president of Wenner Bread, a baked goods company in Bayport, said that even with the lower volatility, NYPA has not met the projections for lower-cost power initially promised with the program.
"Even though NYPA is leveling out the wholesale grid charges, they are still not meeting their original costs to us, which they indicated prior to signing up with the ReCharge New York program," he said.