Pressure on to Block LIPA Rate Hikes

A three-year rate increase approved in 2015 by the Long Island Power Authority's board will result in a cumulative 7.3-percent increase in the delivery portion of LIPA bills.

Carissa Katz

Jan. 25, 2018

Christopher Walsh

Assemblyman Fred W. Thiele Jr. and Senator Kenneth P. LaValle introduced state legislation last Thursday that would require the Long Island Power Authority’s board of trustees “to protect the economic interests of its ratepayers and the service area” when proposing rate increases. An amended Long Island Power Authority Rate Reform Act also would prohibit LIPA from increasing rates to offset revenue losses due to ratepayer energy conservation efforts.

In 2015, LIPA’s board approved the largest rate increase in the utility’s history. The three-year increase, implemented between 2016 and 2018, resulted in a cumulative 7.3-percent increase in the delivery portion of LIPA bills and raised more than $287 million in new revenue.

Under current law, LIPA trustees are limited in what they can consider in a rate case. An appropriate consideration is whether State Department of Public Service recommendations are consistent with sound fiscal operating practices, existing contractual obligations, and safe and adequate service.

The proposed legislation would modify the LIPA Reform Act by directing the utility to consider the economic impact of a rate increase, in addition to the criteria already enumerated in the statute.

“In 2015, the flaws in the LIPA Reform Act saddled ratepayers with a three-year increase, the largest in LIPA history,” Mr. Thiele said in a statement. “LIPA trustees implored us to fix the law. We should do so now before LIPA and PSEG-Long Island can ask for another rate increase.”

Under federal tax legislation, “Long Islanders are already facing a significant economic loss which will cost residents billions in taxes due to lost income tax deductions,” Mr. Thiele said.

“At the same time, utility companies could see a windfall in tax reductions. Ratepayers and taxpayers are the same people. It is imperative that the LIPA Reform Act be amended so that LIPA considers the economic impact of electric rate increases. In addition, Long Islanders are successfully working hard to reduce energy consumption. They should get the financial benefit of the efforts to conserve and not be punished with higher rates,” Mr. Thiele’s statement read.