LIPA Proposes 2010 Operating & Capital Budget Which Stabilizes Rates in
Volatile Energy Market and Expands Investment in Energy Efficiency and Renewable
Energy
LIPA decreases power supply charge again, maintains delivery charge at 2009
level
Law reinforces his strong commitment to investing in energy efficiency,
clean renewable technologies and smart grid efforts with programs that will
assist customers in lowering their bills
New and increased taxes lead to modest 1.5% ultimate bill impact to the
typical residential customer
Proposed budget highlights include: continued funding for Low Income Senior
Energy Assistance Program and largest Solar Project in New York State; new
Incentives for Plug-in Electrical Vehicles and Solar Thermal Projects and;
expanded funding for Smart Meters, Smart Grid and Solar and Wind Power Programs
Uniondale, NY – The Long Island Power Authority (LIPA) today released
its proposed 2010 Operating and Capital budgets that lowers the power supply
charge, maintains the delivery charge and increases its investment in energy
efficiency and renewable energy programs.
“We need to operate in a fiscally conservative environment while continuing
to invest in energy efficiency and renewable energy,” said LIPA’s President and
CEO Kevin S. Law. “We worked diligently in these challenging times to hold the
line on controllable expenses while making sure we maintain our high standards
of electric service reliability.”
Continuing to refund the benefits of lower priced natural gas in 2009 and
forecasting prices to remain at moderate levels in 2010, LIPA projects its fuel
and purchased power costs to decrease next year allowing for another reduction
in the Power Supply Charge by 4% which, when added to the 6% reduction in May
2009, equates to a 10% reduction in the past year. These cuts also follow a bill
credit customers started to receive last week as a result of lower fuel costs.
As in prior years, LIPA’s Delivery Charge will not increase and unfortunately
will not decrease because LIPA has been burdened with rate pressures from a
number of areas including higher property taxes and energy capacity costs and
lower revenue due to the poor economy.
Almost thirty cents of every dollar customers pay to LIPA goes to service
debt and other capital costs as well as for numerous taxes imposed on LIPA. The
Authority has almost $7 billion of outstanding debt and LIPA pays more than $492
million in taxes to the state, the counties, towns and villages and local school
districts on Long Island, all of which must be recovered from LIPA’s customer
base. “If we are ever going to provide permanent rate relief to our customers we
must reduce both our debt and tax burden and thus I will continue to work with
the LIPA Board of Trustees, our elected officials and business and civic leaders
to examine ways we can do so,” added Law.
New Charges on Bills
A new Efficiency and Renewable Energy Charge will be on bills in January. It is
intended to provide our customers with clarity on the amount they contribute for
these programs which used to be included in the Delivery Charge. Equally
important is the fact that since this new charge is based on individual electric
usage, customers will be able to see how their own efficiency efforts are
helping to lower their electric costs.
Also, a new New York State Assessment will appear on the bills in 2010, which
is a direct pass-through of a new assessment imposed by the State on all
utilities. This new assessment will amount to a monthly charge of $1.75 for the
average residential customer. “Customers can reduce their own cost of the
assessment by taking advantage of the Efficiency Long Island Programs and
reducing their usage,” said Law.
While LIPA is not increasing its Delivery and Power Supply rates, the new tax
assessment along with an increase in property taxes will require an adjustment
of 0.4% to the typical commercial customer monthly bill and 1.5% to the typical
residential customer’s monthly bill. The combined increase will be approximately
1% for all customers. Thus, the typical residential customer will pay $2.25 more
per month effective January 1st, which is $3 less than what they paid in January
2009 and is virtually at the same level a typical customer paid in January of
2006.
Investment in Our Future
Under Law’s direction, LIPA continues to be a leader among public and investor
owned utilities in pursuing energy efficiency and renewable energy. The
Authority is increasing its proposed spending on Efficiency Long Island by 65%
over the 2009 levels and is increasing its investment in Renewable Energy
Programs by 26%. LIPA is again increasing funding for its successful Solar
Pioneer, Solar Entrepreneur and Backyard Wind Power programs and is continuing
to invest in its Smart Meter and Smart Grid efforts. Law is also introducing two
new renewable technology programs providing customers with incentives for
solar-thermal installations and rebates for the purchase of plug-in electric
vehicles, (when commercially available).
“If we are ever going to move toward a clean energy economy and reduce our
carbon footprint, we need to become smarter about the energy we use and how we
use it,” said Law. “We will continue to help our customers through education and
incentives to lower their bills, while reducing our dependency on fossil fuels
and creating clean-energy jobs and stimulating this sluggish economy.”
Proposed Budget Highlights
- Substantial increase in funding for Efficiency Long Island
- Substantial increase in funding for Renewable Programs including:
- Residential Solar Pioneer Program
- Commercial Solar Entrepreneur Program
- Backyard Wind Power program
- New Solar Thermal Initiative
- New Plug-in Hybrid Electric Vehicle (PHEV) Program
- Funding for 50 MW Solar Project (largest solar initiative in NY state)
- Substantial increase in funding for Smart Meters and Smart Grid
- Unprecedented federal funding for Solar and wind initiatives
- Continues funding for Low Income Senior Energy Assistance Program
- Funding for asset revenue enhancement study
- Continues funding for strategic business model review
- Includes funds to pursue competitive bids for management services of its
Transmission and Distribution systems.
Public Participation
Continuing his efforts to make LIPA more transparent, Law has released LIPA’s
budget earlier than ever before and will be holding several morning and evening
public sessions on the 2010 budget.
LIPA’s proposed 2010 Budget will be available on LIPA’s Web site at
www.lipower.org this afternoon.
Four public comment sessions on the budget will be held on the following
dates:
November 17th
- 10am - Lower Level Teleconference Center, Omni Bldg.
333 Earle Ovington Blvd., Uniondale, NY
- 7pm – Sheraton Long Island Hotel,
110 Motor Parkway, Hauppauge, NY
December 9th
- 10am - H. Lee Dennison Bldg,
100 Veterans Hwy., Hauppauge, NY
- 7pm - Lower Level Teleconference Center, Omni Bldg.
333 Earle Ovington Blvd., Uniondale, NY
Comments on the budget may also be submitted by e-mail via LIPA’s Web site
and will be accepted through December 17th.
It is anticipated that the LIPA Board of Trustees will consider the adoption
of the proposed 2010 budget (and the new charges for the state assessment and
energy efficiency and renewable programs) at its December 17th, 2009 meeting,
which is also open to the public and will be held at LIPA’s headquarters at 333
Earle Ovington Boulevard in Uniondale beginning at 11AM. |
