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LIPA delivery charge on electric bills will increase $2.16 a month

LIPA power lines along Motor Lane in Bethpage

LIPA power lines along Motor Lane in Bethpage on March 8. Credit: Newsday/Steve Pfost

Residential PSEG Long Island customers next year will see an average $2.16 monthly increase in the delivery charge portion of their electric bills, but the increase could be offset by declines in other portions of the bill, LIPA said Tuesday.

The delivery charge, which represents around half of customer bills, will increase 2.45% next year, slightly below the point that would require the Long Island Power Authority to file a full rate-hike request with the state Department of Public Service.

At the same time, LIPA is projecting a decline in the power supply charge portion of bills, tied primarily to its expectation of lower natural gas prices. LIPA chief executive Tom Falcone said customers could “take to the bank” the “vast majority” of that expected decline in the power supply charge. Customers also will see declines in the revenue decoupling charge portion of bills, while seeing a slight increase in the renewables, or distributed energy, charge, leading to what LIPA projects could be a net monthly bill increase of around 43 cents.

Customers who use more than the average 770 kilowatt-hours will pay more than $2.16 a month for delivery, and any unexpectedly extreme weather and higher usage could send bills up.

Among the factors leading to the increased costs next year are $31.8 million more in debt payments, a $4.5 million increase in wages for primarily PSEG workers, including unionized workers who recently negotiated a new contract, a $5.1 million increase in the budget for storm response, $11.5 million in property taxes for plants and the electric grid, and $1.8 million in new initiatives.

The utility will wrap up a $730 million federally funded storm hardening program by March, Falcone said, then embark on a LIPA funded continuation of the program using $200 million of ratepayer funds over four years. The program will harden circuits to continue to limit outages and keep a workforce of contractors on the Island in case big storms hit.

LIPA also is launching a new solar program aimed at providing low- to moderate-income customers whose homes or budgets cannot accommodate solar panels to the discounts other solar customers receive. The program, called Solar Communities, will be run by LIPA and PSEG, unlike the Community Solar program that is administered in part by outside solar installers.

Solar installers, environmentalists and public officials held a rally Wednesday to protest LIPA's plan to apply a complex and less generous state formula for compensating community solar starting Jan. 1. They also expressed concern that LIPA's new Solar Communities program would compete with outside installers who said their Community Solar program would be "devastated" come Jan 1.

"LIPA, you're headed in the wrong direction," said Lisa Tyson, executive director of the Long Island Progressive Coalition. 

State Sen. John Brooks (D-Seaford) said keeping the existing community solar program under its current pricing scheme was "critical" for the nascent field to "get off the ground."

 "LIPA should not be a deterrent to the process," he said.

"I hope it's not going to mean we're competing directly with our own utility," said Jim Brennan, chief growth officer of SUNation Solar Systems of Ronkonkoma, about LIPA's new Solar Communities program.

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