LIPA board during their monthly meeting. (Feb. 24, 2011)

LIPA board during their monthly meeting. (Feb. 24, 2011) Credit: Howard Schnapp

The 1.9 percent LIPA rate increase had already been approved in its 2011 budget - all that remained was for trustees to approve a change in LIPA bylaws to make it official.

That's when trustee Neal Lewis raised what turned out to be a controversial question.

At a regular monthly meeting of trustees Thursday, Lewis asked LIPA vice president Bruce Germano whether LIPA intentionally kept the increase to under 2.5 percent to avoid an automatic rate review by the state Public Service Commission, required in LIPA's rules.

The issue is significant because Long Island lawmakers have long pushed bills seeking PSC review of LIPA rates.

Germano responded, "No," indicating that the PSC trigger had not been considered.

But LIPA chief operating officer Michael Hervey quickly clarified LIPA had "an eye on that 2.5 percent," but did not keep the rate increase lower because of it. In fact, he noted, LIPA under-collects on its delivery charge. If it collected all its costs, he said, the charge would average $15 rather than the $8.25 it was recently increased to (from a prior $5.37).

After the vote, LIPA chairman Howard Steinberg said that in his 12 years on the board, he has never known any LIPA employee to act with anything but "complete integrity."

Lewis, a supporter of PSC review of LIPA rates, later expressed surprise at Steinberg's statement. "I felt it was a very heavy-handed attempt to chill trustee discussion of a PSC review," said Lewis, who was the single trustee to vote against the 1.9 percent increase.

Trustee Gemma de Leon, who noted the increase represented a 60 percent jump in the fixed portion of the delivery charge, abstained.

The increase, which takes effect next week, passed.

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