PSEG Long Island in September will raise the “decoupling” portion of electric bills for average customers to $4.30 a month from its current $1.69, a 154 percent increase.
The charge, initiated in March, allows the utility to recoup expenses when revenue falls short of projections. The utility can increase (or reduce) the charge based on how several factors affect revenue collections, including weather and the effects of green-energy initiatives, which reduce customer usage.
Decoupling mechanisms were designed to give investor-owned utilities incentives for green-energy programs, even though such programs could affect their revenue. LIPA trustees approved the public authority’s use of the charge last year. PSEG noted the charge is purely to pay its costs and doesn’t increase its profits.
The increase in the decoupling charge comes as the power supply charge has risen 35 percent for the first six months of 2016, following two years of general declines.
The decoupling charge was $1.69 for average customers using 770 kilowatt-hours a month starting in March.The charge increases or decreases with usage.
After increasing by 154 percent in September, the charge will amount to 2.83 percent of customer bills, bringing the total additional amount to $4.30 a month until the charge is reassessed early next year, PSEG said.
PSEG spokesman Jeff Weir noted the decoupling mechanism isn’t always a charge — it can decrease if revenues come in above projections and expenses.
In any case, he said, the mechanism removes a barrier that could discourage energy efficiency measures.
“It allows us to continually support and push forward programs that help customers use less energy and be more efficient,” he said, adding such measures can “help customers lower their electric bills.”