PSEG to drop August power costs to near-record low
The first fleet of PSEG logo service trucks come out from the service yard to begin work under the new utility at National Grid in Hicksville on Jan. 1, 2014. Credit: Newsday / J. Conrad Williams Jr.
One of the heaviest periods for electricity use also will see among the lowest costs for customers as PSEG Long Island this summer cuts the power-supply charge portion of bills to a near-record low.
After months of increases in their electric bills through a cold winter, Long Island ratepayers who use around 775 kilowatt hours could see an average $13 reduction in their bills this month as lower demand for natural gas leads to a break in prices.
The power supply charge fell 20 percent for August to 6.78 cents a kilowatt hour -- the lowest it has been in at least a year -- from 8.5 cents last month.
The charge reached record highs this winter, topping 12.3 cents in March, as cold weather led to soaring demand and prices for natural gas. Eight of the last 13 months have seen power-supply charge increases.
The cooler weather is playing an equal part in this month's sharp decline, PSEG said.
"It's a result of the cooler weather," PSEG spokesman Jeff Weir said. "It's resulted in lower usage, and lower demand, and thus, lower natural gas prices."
He noted that fuel costs are "a direct pass-through" to customers and "any savings as a result of a [lower] cost is a savings in the customers' bills."
The power supply charge makes up about half of customers' bills. The other main portion, the delivery charge, has rarely increased over LIPA's 16-year history, but PSEG and Gov. Andrew M. Cuomo have said it will remain frozen until 2016.
