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LIPA plans standard time-of-use rate; Eichhorn to retire

PSEG LI President Dan Eichhorn addresses the Superstorm

PSEG LI President Dan Eichhorn addresses the Superstorm Sandy Committee in the Nassau County Legislative chambers on Monday, Aug. 17, 2020 in Mineola. Credit: Howard Schnapp

LIPA and the state's top solar-industry group on Monday reached a tentative agreement to develop a road map that would make time-of-use electric rates a standard offering on Long Island within three years, while phasing in a new fee for first-time solar customers over three years instead of one.

LIPA chief Tom Falcone called the prospect of a new standard time-of-use rate, which would provide discounts to those who shift electric use away from peak-demand times, crucial to cutting carbon emissions while reducing costs — savings that would be passed on to ratepayers.

The New York State Solar Energy Industries Association, which has been pushing hard in recent weeks for a rollback of what some members called a solar tax planned for Jan. 1, is expected to vote on the plan on Tuesday, said NYSEIA board chairman, David Schieren.

Separately on Monday, PSEG announced that Dan Eichhorn, president and chief operating officer of PSEG Long Island, will retire next year.

Eichhorn, who has held the post since 2017, had presided over the company's much-criticized response to Tropical Storm Isaias. The storm left more than 535,000 customers without power for up to a week, and subject PSEG to withering criticism over failed computer, telecom and storm readiness plans. PSEG said in a statement that Eichhorn will remain in place through a transition and a replacement has been chosen. Eichhorn has spent 32 years at PSEG.

PSEG in a statement said Eichhorn "has chosen this time to retire giving a new leader the opportunity to make their mark on the future" of the company. PSEG chief operating officer Ralph LaRossa said Eichhorn "helped place the PSEG Long Island workforce in a position to move into its next chapter with the right tools, team and dedication to serving every customer."

Concerning the standard time-of-use rate, which already is in place in such areas as California, Falcone said it would "reduce the number of power plants we need on Long Island, but also encourage people to use energy when it’s cheaper and cleaner."

PSEG already offers five time-of-use rates with discounted off-peak use, a complement to smart meters it has installed in the past three years. PSEG's new contract with LIPA calls for the company to more aggressively market those rates.

LIPA trustees on Wednesday are to vote on that contract, which places more than half the company's $80 million in annual pay at risk if it doesn't meet a long list of new performance targets. The company also has agreed to provide greater autonomy for the Long Island office, including its computer department.

LIPA trustees have been briefed on the utility's new plan to work with the solar industry on the three-year phase-in of the new rates and the so-called customer benefit contribution, which had originally called for a 89-cent per kilowatt charge per month for new solar customers starting Jan. 1 — about $5-$10 per month for average new solar customers. Under the new arrangement, the fee would be cut to around 30 cents per kilowatt for each of the next three years.

The agreement also calls for LIPA to continue to offer incentives for customers who purchase new solar systems with battery storage units, which derive widespread benefits from properly tailored time-of-use rates. Customers, for instance, could recharge their batteries at night at lower rates, and discharge the batteries for home or grid use during the day.

Schieren, who is chief executive of EmPower Solar of Island Park, said the three-prong plan will help "unlock market-driven growth" for solar and battery systems, while saving customers money.

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