LIPA predicted electric bills would drop $6 a month — that's not going to happen this month

Long Island customers expecting a reduction in their PSEG bill in the new year aren’t likely to see it this month, as the utility announced a Jan. 1 increase in the power supply charge by just over 3%, a figure compounded by other increases.

Despite projections during its budget process that its 1.2 million customers are likely to see total average bill declines of as much $6.53 a month this year, most Long Islanders are apt to see slightly higher January bills — as much as $6 higher — when the mailing comes next month. That's chiefly because of the higher power supply charge, along with new annual hikes in delivery charges and the daily service charge.

LIPA in its 2026 budget forecast the delivery and system charges portion of bills would increase for average customers by $3.12 a month, along with smaller increases in the renewable-energy charge (34 cents) and a revenue decoupling (42 cents).

But LIPA also projected that power supply charges would decrease an average $8.64 a month this year, and that, coupled with projected lower customer usage, would more than offset higher delivery charges for a $6.53 reduction. Usage is often driven by weather, particularly in the summer months, so any projection of lower usage is largely outside of LIPA’s control, particularly when the need for air conditioning drives usage higher.

“I know I’m not going to cut back on furnace usage in winter or air conditioning in the summer,” said Plainview ratepayer Richard Siegelman.

LIPA in a statement in response to Newsday questions said despite the January power-supply increase, its overall expectation of bill reductions for customers this year “have not changed.”

“LIPA’s 2026 budget continues to project lower overall customer bills for the year,” the authority said in a statement. “Based on our full-year outlook, the typical residential customer bill is expected to be approximately $6.50 lower per month in 2026 compared to 2025, primarily driven by lower projected power supply costs and reduced usage. Short-term or line-item increases do not change that full-year bill projection.”

Siegelman, whose last PSEG bill in 2025 showed he was paying a record-high all-in cost for electricity at 29.68 cents a kilowatt hour, said that while the increases this month probably won’t break his bank, “I don’t doubt that it will be felt by a lot of people on Long Island” for whom “every penny or every dollar counts.”

On Jan. 1, PSEG Long Island, which runs the grid under a new $493 million five-year contract extension, posted a new power supply charge that is 3.4% higher than it was in December, at 12.9 cents a kilowatt hour. It’s also a 4.6% increase from the January 2025 power supply charge of 12.4 cents. The charge fluctuates month to month, tied mainly to natural gas and power costs.

The increases of a tenth of a penny may seem small but can add up when customers include usage of more than 719 kilowatt hours — the figure LIPA expects users to accumulate each month.

Customers across nearly all rate classes also will see an increase in the fixed system charge of 2 cents per day starting this month, from 54 cents last year to 56 cents this year, according to PSEG rate information.

While the power supply charge varies month to month, delivery charges generally stay the same during the year. For the standard time-of-day rate published by PSEG, the new off-peak charge is 9.29 cents a kilowatt hour for the October through May period, and 10.93 cents in summer. That’s an increase from last year’s 8.91 cents in the October through May period and 10.49 cents per kilowatt hour in the June through September period last year.

The peak power charge (for usage logged from 3 to 7 p.m. weekdays) for standard time-of-day customers will see a jump to 18.85 cents a kilowatt hour in the winter months (compared with 18.09 cents last year), and 21.17 cents a kilowatt hour in the summer months (compared with 21.27 cents in the summer of 2025). 

Other time-of-day delivery charges saw similar increases.

PSEG’s standard flat rate increased to 10.64 cents a kilowatt hour in the winter months, from 10.21 cents last winter. In the summer months those customers pay 10.64 cents for the first 250 kilowatt hours, then 13.48 cents for usage in excess of 250 kilowatt hours, compared with 2025 charges of 10.21 cents and 12.94 cents, respectively.

Seasonal changes in winter costs for natural gas may be part of the explanation. Most National Grid customers, for instance, are seeing their cost for natural gas jump to 72.134 cents a therm this month, from 70.77 cents last month, according to published figures. Gas prices have been climbing since October.

For LIPA, the January jump is not expected to be a long-term trend, though the utility last year also under-projected power supply costs and customer bills. . 

“LIPA is still projecting a $219 million decrease in power supply costs, primarily due to lower commodity costs resulting from less on-island generation, and the typical bill projection also reflects decreased customer usage,” the utility said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.