Ratepayers could foot $401M bill for PSEG pensions
The changeover from LIPA to PSEG could cost ratepayers much more than previously thought: a staggering $401 million more.
When Gov. Andrew Cuomo brokered a deal last year to have PSEG replace National Grid as the manager of LIPA's electric grid, there was a question surrounding who would pay for the pensions of PSEG Long Island's employees. Now it looks like LIPA will have to foot the bill.
Matthew Cordaro, an energy expert who sits on LIPA's board, says he believes rates will have to go up to pay for the pensions, although he was not speaking for the board in his remarks to News 12. Cordaro says any potential hikes wouldn't go into effect for the next year or so because Cuomo has made a commitment to a rate freeze through 2015.
LIPA declined to comment directly on the pension costs, instead issuing a statement saying, "LIPA is planning to keep delivery service charges flat in 2014 and 2015." It's unclear what will happen to power rates after that time.
News 12 Long Island contacted the governor's office for comment on the pension debt, but has yet to receive a response.
Power customers who spoke to News 12 are unhappy with the possibility of a rate hike. "Our rates are already among the highest in the country, so I think we deserve a break," says Krissy O'Connell, of Rocky Point.