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PSEG customers facing rising electric bills

PSEG-Long Island trucks in Hicksville on Jan. 1,

PSEG-Long Island trucks in Hicksville on Jan. 1, 2014. Credit: Newsday / J. Conrad Williams Jr.

PSEG Long Island customers dealing with January's electric-bill sticker shock face another jump in February, and likely another in March, the company said, as the power supply charge rises to its highest level since at least 2005.

Rising natural gas prices tied to the polar cold snap are to blame for the increases, which will raise typical residential bills by around $5.25 next month after a January spike of $17. PSEG on Thursday said the power supply charge for February will rise to 0.1159 cents a kilowatt hour, the highest level in LIPA records dating back to 2005, when it was 0.1068 cents.

The February power supply charge is a jump from January's 0.1091 cents a kilowatt. The $5.25 increase applies to residential customers who use 775 kilowatts of electricity. Businesses and local governments that use more will see a proportionately bigger jump.

"This bill just killed me," said William Jones of Wading River, referring to a January PSEG bill that jumped to $435 from $179 last month. "My bill almost tripled since they took over," he said.

Jones has electric heat, an expensive proposition as usage and rates climb together in cold weather. He said he's trying to offset it. "Right now I'm burning wood like crazy. I don't know what my next bill's going to be."

The 10-year high had been previously set in January 2009, when the charge hit 0.1098 cents. PSEG Long Island spokesman Jeff Weir said the utility is projecting that the wholesale cost of natural gas will go up another 30 percent in February, and "there could be another increase in March," he said.

Robert Buscavage of Moriches said he still hadn't recovered from the surprise of a January power supply charge that doubled from $27 to $55. "When does it end?" he said.

Gov. Andrew M. Cuomo promised a three-year rate freeze following passage of his LIPA reform act last year, but the freeze applies to the delivery-charge part of bills, which has rarely changed.

Natural gas, in high demand for heating and electric generation as record cold blankets much of the country, fuels most of Long Island's power plants. "The persistent cold has driven up the cost of natural gas," Weir said. "That's making electricity more expensive to both generate and purchase."

For Charlotte Grande, an 81-year-old ratepayer from Port Jefferson Station, the increase in her PSEG and National Grid bills means "I cut back on other things." She lives mostly on Social Security.

"It's frustrating," she said, but "at this point in my life I'm not getting my knickers in a knot over this. I'm either going to pay it or they're going turn off my electric. So I'll pay it."

The power supply charge, which makes up around half of customer bills, includes the utility's cost of providing fuel to power plants and buying energy. Prices have climbed since December.

LIPA adjusts the power supply charge each month based on actual costs, with a level of forward projection. When projections are off, LIPA must recoup in future months. An under projection last November led LIPA to recoup around $41 million through January's increase, raising typical consumer bills by around $17.

Before 2013, LIPA made only annual or quarterly changes in the power supply charge, and sometimes socked ratepayers with a so-called surcharge to pay for fuel. The move to monthly adjustments meant LIPA didn't hold overcollections that sometimes weighed in at upwards of $200 million.

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