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Legislators push for community input on rate hikes

COURTESY PHOTO | PSEG trucks on the job.
COURTESY PHOTO | PSEG trucks on the job.

Following the largest rate increase in the Long Island Power Authority’s history, two state legislators are moving to force consideration of the economic impact on ratepayers.

Their legislation would be an add-on to a recently enacted bill that requires PSEG to make public its employee compensation, including executive pay and all fees paid to consultants and contractors. With the raise granted in 2015, that information was requested but not provided after PSEG maintained that those details were exempt from state scrutiny or public disclosure under the existing LIPA Reform Act.

Assemblyman Fred Thiele Jr. (I-Sag Harbor) and Senator Kenneth LaValle (R-Port Jefferson) have introduced bills in their respective chambers that would require the LIPA Board of Trustees “to protect the economic interests of its ratepayers and the service area” in addition to the interests of the utility company.

“Our new economic legislation will build upon that legislative success by providing ratepayers with a fairer and more transparent ratemaking process that serves the public interest,” the two men said in a written press release.

“We will review the bill,” said PSEG Director of Communications Jeffrey Weir. He pointed out that while some utility companies pay federal taxes LIPA is a nonprofit public utility for which PSEG is the service provider. As such, there are no federal taxes assessed.

“We continue to make investments in our energy efficiency programs, as we are always looking for new ways to help our customers lower their monthly bill,” Mr. Weir said.

In 2015, LIPA imposed a 7.3 percent rate increase in the delivery potion of the fuel bill with the increases to be implemented over a three-year period. The increases amount to a more than $287 million hike in revenues for the company that in recent years has contracted with PSEG to manage its electric system, according to the two legislators.

Under existing law, LIPA trustees are able to consider only whether requested rate hikes are consistent with  sound fiscal operating practices, existing contractual obligations and safe and adequate service. The LIPA Reform Act providing those criteria for considering a rate hike were endorsed by five LIPA trustees appointed by Governor Andrew Cuomo while two other trustees voted against the increase and one abstained.

The legislators quoted those who voted against the rate hike in 2015 as believing the criteria for a raise were too narrow and State Comptroller Thomas DiNapoli was critical of the lack of regulatory oversight of LIPA and PSEG.

In a written statement, Mr. Thiele said after the last hike, LIPA trustees recommended a fix to the law that affected considerations of  rate increases.

“We should do so now before LIPA and PSEG can ask for another rate increase,” he said.

The change would enable more community input by mandating a public hearing, Mr. LaValle said. He noted that the lack of oversight on rate hikes comes at a time when the state is trying to help taxpayers by imposing its 2 percent tax cap.

“Electric rates on Long Island are among the highest in the country but there appears to be no end to the increases,” Brookhaven Town Supervisor Ed Romaine said, thanking the two state legislators for their efforts.

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