New legislation would require LIPA to consider economic impact of rate increases

01/23/2018 6:00 AM |

In Albany, East End representatives have introduced legislation that would require the Long Island Power Authority Board of Trustees to consider the economic impact of rate increases before customers see higher bills. 

New York State Senator Ken LaValle, who represents the East End, and State Assemblyman Fred Thiele Jr., who represents Shelter Island Town and the South Fork towns, introduced amendments that they said would fix the Long Island Power Authority Rate Reform Act last Thursday.

The power authority board would have to consider how a rate increase would affect ratepayers in order “to protect the economic interests of its ratepayers and the service area,” and not just the interests of the utility company, a press release from Mr. Thiele’s office said. The legislation would also prevent LIPA from raising rates to offset revenue losses due to ratepayer energy conservation efforts.

The proposal comes nearly three years after the LIPA board made the largest rate increase in LIPA’s history. The increase resulted in a cumulative 7.3 percent rate increase in the delivery portion of LIPA bills, according to Mr. Thiele.

Current law limits what LIPA board members can consider in a rate increase. The lawmakers said LIPA cannot consider the economic impact of a rate hike on customers or the Long Island economy, the press release said.

“More than ever, it is critically important that the financial impacts on customers are considered when LIPA deliberates any cost increases. This measure will enable more community input by mandating a public hearing when considering rate changes,” Mr. LaValle said. “In addition, this legislation would provide the Trustees with the tools necessary to reject rate increases that would cause additional financial burdens on Long Islanders.”

“In 2015, the flaws in the LIPA Reform Act saddled ratepayers with a 3-year increase, the largest in LIPA history,” Mr. Thiele said.

He said LIPA Trustees asked legislators to adjust the law.

“We should do so now before LIPA and PSEG-LI can ask for another rate increase,” he said. “Under the federal tax bill, Long Islanders are already facing a significant economic loss which will cost residents billions in taxes due to lost income tax deductions. At the same time, utility companies could see a windfall in tax reductions.”

The assemblyman also noted that Long Islanders should not be penalized for reducing their energy consumption.

“They should get the same financial benefit of the efforts to conserve and not be punished with higher rates,” he said.

When the rates increase in 2015, the executive compensation for PSEG-Long Island’s top officials was not made public, as the company claimed the information was exempt from disclosure under the LIPA Reform Act, passed in 2013, Mr. Thiele and Mr. LaValle said.

Last month, the legislators sponsored a law, which was approved, that requires PSEG-LI to make public all compensation, including executive pay, that is connected to a rate increase request.

“Our new economic impact legislation will build upon that legislative success by providing ratepayers with a fairer and more transparent ratemaking process that serves the public interest,” they said.

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