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.

LIPA, a non-profit municipal electric provider, owns the retail electric Transmission and Distribution System on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens. LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered. In 2010, LIPA outperformed all other overhead electric utilities in New York State for frequency of service interruptions, and ranked second for duration of service interruptions. LIPA does not provide natural gas service or own any on-island generating assets. More information about LIPA can be found online at: http://www.lipower.org.

Media Contact Information
Mark Gross
Phone - (516) 719-9892
Media Pager - (516) 229-7248
media.relations@lipower.org

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