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PSEG Long Island: Reduced power supply charge could mean lower electric bills

PSEG electric transmission lines on Waltress Road in

PSEG electric transmission lines on Waltress Road in Ronkonkoma on Jan. 29, 2015. Credit: Heather Walsh

Electric bills could see another drop in May as PSEG Long Island cuts the power supply charge 22 percent -- the fifth straight month of reduction.

For average customers using 775 kilowatt-hours a month, the move could lower electric bills by around $13.

In a statement Thursday, PSEG said the reduction was a "direct result" of the company's "ability to procure gas at prices that were lower than projected," and by its decision to use oil rather than natural gas "when it was more economical during the first quarter of the year."

Most Long Island power plants can operate on oil or natural gas.

The power supply charge makes up about half of customer bills.

The other half, called the delivery charge, has been frozen for the past three years as part of Gov. Andrew M. Cuomo's LIPA Reform Act, but PSEG and LIPA are seeking to increase it about 4 percent for each of the next three years.

That increase is subject to state review and LIPA board approval.

The power supply charge for May is 6.03 cents per kilowatt-hour compared with 7.74 cents this month. In May 2014 the charge was 10.6 cents. It hit a recent high of 10.7 cents in December.

While lower power supply charges generally translate to lower bills, monthly bills vary with customer usage, which tends to increase during the hotter summer months.

The power supply charge is adjusted monthly as fuel prices change, and as the utility reconciles past months' estimates.

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