LIPA acknowledges over-collecting $136M

The Long Island Power Authority over-collected $136 million in fuel costs last year -- even after twice lowering rates -- and that cash pot was one major reason for the 4.6 percent bill reduction in 2011 announced in January.

LIPA by law must return all fuel-related over-collections but then must return any surplus. In budget hearings last year, LIPA said lower anticipated fuel costs for 2011 and unspecified 2010 over-collections were behind the January reduction. The $136 million was disclosed in a 2010 financial statement approved Thursday by LIPA trustees.

And while the money works its way back to consumers, LIPA, which now calculates future fuel costs quarterly, rather than yearly, signaled Thursday the new method won't result in any additional reduction this April 1, the start of a new quarter.

"While LIPA is very concerned about world events and how it might affect future fuel costs, our April 1 quarterly fuel adjustment is flat as compared to the beginning of the year," spokeswoman Vanessa Baird-Streeter said.

She noted that a separate 1.9 percent bill decrease will kick in next month related to another overcharge: $231 million stemming from a faulty formula for projecting "lost" energy costs. The State Senate has scheduled a public hearing April 7 at Farmingdale State College to review LIPA's handling of the overcharge.

LIPA explained that adjusting for fuel costs quarterly rather than annually is the standard.

"As you know, in 2011 LIPA instituted a quarterly adjustment of its fuel and purchased-power charge to better conform to other New York State-regulated utilities and to better address the issue of under- or over-collection of fuel and purchased power costs," Baird-Streeter said.