PSEG rates are back on the rise
The average Long Islander’s electric bill is expected to increase more than $15 next month due to a 27 percent hike on the power supply charge in their bills.
The increase in the power supply charge — which accounts for about half of users’ bills and covers the cost of buying electricity from other providers to help run its power plants — is due in part to increased natural gas prices.
That, and revenues that came in lower than expected have put PSEG-LI and LIPA behind in covering the cost of buying the natural gas.
The supply charge will jump from 7.37 cents per kilowatt hour in October to 9.34 cents in November. Last year’s November rate was 7.78 cents per kilowatt hour.
PSEG-LI spokesperson Elizabeth Flagler said the average residential ratepayer uses about 775 kilowatt hours per month.
Ms. Flagler said Tuesday that PESG-LI — which operates LIPA’s distribution and transmission system — does not determine the power supply charge.
“We don’t have control of it,” she said. “When market prices change, that is directly passed through to customers … it’s estimated monthly, and we try to keep it as close to what customers are using.”
Over the summer, PSEG-LI wrote to customers that due to limited use of electricity, it was “pleased to be able to pass along those savings.” Power supply charges fell five months in a row, from May through September, falling at their lowest to 5.95 cents per kilowatt hour in August.
But those lower charges were underestimated, according to LIPA’s monthly financial reports.
Due to milder temperatures, weather-adjusted demand for power was 2.7 below projections in August and 3.7 percent lower in September. Costs to purchase the electricity were higher than projected as well.
So far this year, LIPA is in a $133 million hole in its fuel and purchase power costs.
According to Ms. Flagler, LIPA is moving a debt offering for $675 million up until this fall, selling the bonds to make up the shortfall.
LIPA’s Board of Trustees had adopted a revised version of its Power Supply Hedging Program at its August meeting, which promised an increased focus on “mitigating the volatility of LIPA’s month-to-month power supply charge.”
Editor’s note: An earlier version of this story misspelled Elizabeth Flagler’s name. We regret the error.
