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LIPA proposes to expand surcharge to cover additional costs

LIPA has proposed to expand the surcharge on the delivery service adjustment so it can cover additional costs.

News 12 Staff

Nov 12, 2020, 1:55 PM

Updated 1,319 days ago


LIPA has proposed to expand the surcharge on the delivery service adjustment so it can cover additional costs.
The delivery service adjustment allows LIPA to recover cost overruns from storms, debt and interest rate-related expenses.
According to a recent filing, LIPA wants the surcharge to also cover non-storm related emergencies, like COVID-19, unpaid customer bills and PSEG LI pension and benefit costs.
The delivery service adjustment fluctuates as the utility's needs change. According to the proposal, this modification would prevent spikes in customers' bills.
Hofstra economics professor and longtime LIPA watchdog Martin Melkonian says this only amounts to an increase in rates at a time when many are struggling.
"It would be a disaster for the Long Island economy," Melokian says. "I think it's a terrible idea to try and raise rates for consumers that are currently under great stress."
News 12 reached out to LIPA to get comments from board members, but a spokesperson says the proposed change would prevent unexpected spikes in customer bills.
The utility says that's because residents would pay one flat rate all year for cost overruns. And if spending comes in below budget, refunds would be issued.
LIPA in a statement says, "The tariff proposal changes that LIPA is seeking... will mitigate future bill volatility and ensure that customers pay no more than LIPA's costs to provide electric service."
It's not clear exactly how bills would change if the proposal is approved, which leaves some residents wishing they knew exactly where their money is going.
"I would prefer it all broken out individually, as opposed to one blanket surcharge. At least then you know what you're paying for," says Jeff Nogid, of East Meadow.
Under the proposal, a different charge, which already exists, would be capped at 5%.
The public will be able to comment on the proposal at LIPA board meetings next week.
A vote is expected to be held in December.

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