LIPA Board Votes on Multi-Million Dollar Package
June 26, 2008
(Brookhaven, NY) - The Long Island Power Authority (LIPA) Board of Trustees today gave the go ahead to begin the administrative process to implement a multi-pronged rate mitigation package which will allocate more than $140 million in reserve funds to residential and small business customers and create a special $10 million fund aimed at low-income senior citizens struggling to pay their electric bills.
The “Low-Income Senior Energy Assistance Program” is a $10 million dollar fund which will provide financial assistance to qualifying seniors in paying their LIPA bills.
“The number one request that comes across my desk since taking over LIPA is from senior citizens on fixed incomes begging for rate relief,” said LIPA President and CEO Kevin S. Law. “Given the staggering rise in oil and natural gas prices and a sluggish economy, lowering rates for everyone is simply unrealistic. But whatever help I can extend to our low-income senior population to help ease the burden is worth the effort.”
Law anticipates that the program would be administered by a local not-for-profit organization or possibly in conjunction with the Nassau and Suffolk County Departments of Aging and/or Social Services.
The rate mitigation package will be funded through $200 million in monies realized largely through a settlement of disputed payments under a previous Management Services Agreement (MSA) with KeySpan and through savings extracted under a renegotiated MSA with National Grid after its announced merger with KeySpan.
In addition to the $10 million “Low-Income Senior Energy Assistance Program”, the package will allocate more than $140 million in reserve funds to residential and small business customers over a 30 month period, $25 million to pay down debt on the Shoreham Nuclear Power Plant, $1 million for expert evaluation of a recently issued RFP to secure the largest block of solar energy in the State of New York and to kick off LIPA’s Commercial Net Metering program, and $1 million to fund a repowering analysis for six power plants in National Grid’s generation fleet.
As a result of skyrocketing fuel prices the Long Island Power Authority also today announced a 3% rate hike effective July 1st, 2008. The typical LIPA residential customer will see an increase of about $4.44 on their monthly bills.
As oil and natural gas prices continue to rise at record rates, with more than 55% of LIPA’s nearly $4 billion budget going for fuel and purchased power costs, a rate increase is inevitable. Utilities across the country are grappling with this problem and have increased rates as much as 30%.
The price of a barrel of oil increased from $92.18 at the beginning of the year to $138 as of this morning. That’s almost a 50% increase. In that same period natural gas has increased from $8.11 to $13.30, a 64% increase. Without LIPA’s fuel hedging program which allowed it to lock in 85% of its fuel costs the rate increase would have been 22.5%. LIPA’s hedging program, if current contract prices hold, will save LIPA ratepayers more than $400 million this year.
“I recognize the harsh reality that the energy crunch is having on our customers,” Law added. “And as I have been saying since I took over at LIPA, I cannot control the cost of fuel, but whatever costs can be controlled, I remain committed to doing what’s best for the ratepayers and that’s why I will be further cutting discretionary spending by 3.5%.”
The LIPA board also approved the 2008/09 capital budget which allocated $300,000 toward a smart meter pilot program in Hauppauge and Bethpage.
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LIPA, a non-profit municipal electric provider, owns the retail electric Transmission and Distribution System on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens. LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered. In 2006, LIPA outperformed all other overhead electric utilities in New York State in all three major reliability categories. LIPA does not provide natural gas service or own any on-island generating assets. More information about LIPA can be found online at: http://www.lipower.org
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Hello
I am trying to get help with my Lipa bill, I owe $169.38.. I am a senior and disabled and housebound. I have called all agencys to no avail. I receive SSI.
Catholic Charities told me to contact LIPA again that their is a program with Adult Protective ?. I also put in for the 200.00 credit and have not heard, it’s about 8 weeks now. My electric is going to be shut off, can someone help me? If you look at my record I have paid my electric bill promptly for 40 yrs, this is the first time I got backed up. I just need help with this bill, I will be able to pay the rest. please
Thank you
Marie KRavette
846-1392
- Posted by: Marie Kravette