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Electric bills set to increase in January after LIPA approves three-year rate hike

Electric bills will likely start increasing next January, due to a $325 million, three-year rate hike that was approved yesterday by the Long Island Power Authority (LIPA).

The rate hike is lower than LIPA’s original request in January to increase revenue by $441 million, which the state rejected last month in favor of a lower rate hike that would only total $325 million.

LIPA’s board yesterday voted to approve the state’s recommended three-year rate hike of $325 million, which for the average residential customer will amount to a 0.8 percent increase in 2016, a 2.1 percent increase in 2017 and a 2.1 percent increase in 2018.

Some of LIPA’s board members, however, still felt that the rate hike should be lower, according to a report by Politico New York – but the board has to raise very specific objections about the state-recommended rate hike in order to postpone the vote and schedule further hearings.

LIPA’s board was unable to provide any objections that met the law’s criteria, Politico New York reports, so the rate hike was voted through.

“[This rate proposal] will negatively impact Long Island’s ability to compete economically,” Assemblyman Fred Thiele said in a press release today, “as we again send a message to the nation and the world that companies on Long Island will continue to face the highest utility rates in the nation.”

The increase, which amounts to about 5 percent over the next three years, will apply only to the electric bill’s delivery charge, which makes up about half of the total bill.

“LIPA increased the delivery charge only twice over the last 16 years, both times by less than 2 percent,” Thiele said. Compared to the 5 percent increase recommended by the state and approved yesterday by LIPA’s board, the rate hike is the “largest increase in the delivery charge in the history of LIPA,” Thiele said.

The rate hike comes after eight months of public hearings and state public service department review, which are now required by the LIPA Reform Act in order for LIPA to increase electric bill rates.

The LIPA Reform Act was enacted in 2013 in the aftermath of Superstorm Sandy, which caused widespread and prolonged power outages across Long Island and prompted a fierce public and political backlash against the electric utility company.

The new legislation gave PSEG Long Island authority over the management of the operation and maintenance of Long Island’s electric utility system, and it also froze electric rates for three years – a freeze that will end in just a few months.

This past January, LIPA made its first rate hike request, which under the LIPA Reform Act requires state public service department review.

But opponents of the rate hike like Thiele argue that even the state’s recommended rate increase is too high.

“PSEG-LI should have been subject to the same cap local government and school districts face for property taxes, which would be less than one percent this year,” he said. “PSEG-LI should have been required to live with the same fiscal discipline as the state and local government.”

With the board’s approval yesterday, the road has been paved for LIPA to adopt the rate increase when it adopts it 2016 budget in December.

“Today, it is clear to all that the LIPA Reform act is not about reform,” Thiele said, “but guaranteeing the financial interests of a private utility company.”

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Katie Blasl
Katie, winner of the 2016 James Murphy Cub Reporter of the Year award from the L.I. Press Club, is a reporter, editor and web developer for the LOCAL news websites. A Riverhead native, she is a 2014 graduate of Stony Brook University. Email Katie