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Portion of 2011 LIPA bill likely to rise

A file photo of LIPA employee working on

A file photo of LIPA employee working on Hampshire Road in Great Neck. (June 26, 2010) Credit: Kathy Kmonicek

As Long Island Power Authority trustees gather Friday in Uniondale to present the utility's proposed 2011 budget, at least one portion of next year's bills appears set to rise.

While bills overall could remain stable or even decrease, LIPA chairman Howard Steinberg already has telegraphed the delivery charge on bills could increase. The delivery charge, which represents costs not associated with fuel purchases, but rather the costs of getting electricity to homes and businesses, makes up about half the bill.

At a trustees meeting last week, Steinberg said the authority probably would have "good news" overall for customers, because natural gas prices, which account for 99 percent of the utility's fuel usage, have come down.

"I do need to point out, though, that we have not had an increase in our delivery charge in 12 years," Steinberg said. "Virtually all other competitors and peer utilities in our region have had significant increases over that period of time."

Martin Cantor, director of the Long Island Economic and Social Policy Institute at Dowling College, said he hopes any increase is used to bring customers long-term savings.

"If they increase it to begin reducing some of the outstanding [$7-billion] debt, that ultimately will reduce rates and that's fine," Cantor said. "But if it's done for operating expenses, it's really just a backdoor rate increase."

LIPA already has indicated it would nearly double its 2011 budget for storm response, given this year's huge storm expenses. So far this year, LIPA has exceeded its $27-million storm budget by about $170 million. Next year's could be increased to between $40 million and $50 million, LIPA has said.

LIPA also has recently indicated it will attempt to save money by challenging the assessments of National Grid-owned power plants, for which LIPA pays around $180 million in taxes annually. LIPA already has filed tax petitions for the Northport and Port Jefferson plants, and will file more in coming months.

The trustees "workshop" Friday will be held at LIPA headquarters in Uniondale at 3 p.m. and is open to the public.


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