LIPA’s Board of Trustees approved LIPA’s 2025 Budget at its December 18th meeting. The 2025 Budget reflects months of effort by LIPA and PSEG Long Island staff, starting with initial budget and performance metric proposal reviews and resulting in detailed line-item and project-level reviews. The development of LIPA’s budget starts with its Board of Trustees, who define our purpose and vision and set expectations for the strategic outcomes that management is expected to deliver in the areas of reliability, customer experience, clean energy, affordability, information technology, and fiscal sustainability. These objectives are then outlined into 5-year roadmaps, detailing the annual deliverables for LIPA to achieve across each department of the utility. LIPA’s management is responsible for managing its internal work plans and overseeing the operations of its service provider, PSEG Long Island in annual performance metrics, as shown in Figure 1.
Figure 1: LIPA’s Key Policy Objective Structure
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2024 Performance & 2025 Budget Highlights
2024 Highlights
- South Fork Wind Farm, the first commercially operated offshore wind farm in the U.S. became fully operational, providing over 130 MW of clean energy to Long Island. Two additional offshore wind farm projects are now in development (Sunrise Wind and Empire Wind 2).
- New York reaches 6 GW of distributed solar, marking the early accomplishment of the Climate Act’s 2025 goal for distributed solar.
- Time-of-Day rates becomes LIPA’s standard rate with nearly 100,000 customers enrolled and a 99% retention rate to date.
- LIPA receives a $425 million Mitigation grant FEMA for Tropical Storm Isaias for storm hardening.
- Fitch Ratings upgrades LIPA to A+ with Stable Outlook
- LIPA offered two UDSA bonds (Series 2024A and Series 2024B) exceeding $1 billion to support system improvements, storm hardening, and debt refinancing efforts.
2025 Budget Highlights
- Despite increases in labor costs and overall inflation, productivity and other cost savings initiatives provided offsets to allow LIPA to remain relatively flat in operating costs while ensuring sufficient funding to maintain and operate the electric system
- While average residential electric bills are projected to moderately increase in 2025 (due mostly to debt service coverage, power supply costs, and increased usage), rates remain below the rate of inflation and 29% below the highest-priced regional utility, as shown in Figure 2.
- Despite increases in labor costs and overall inflation, productivity and other cost savings initiatives provided offsets to allow LIPA to remain relatively flat in operating costs while ensuring sufficient funding to maintain and operate the electric system
- While average residential electric bills are projected to moderately increase in 2025 (due mostly to debt service coverage, power supply costs, and increased usage), rates remain below the rate of inflation and 29% below the highest-priced regional utility, as shown in Figure 2.
Figure 2: 2024 System Average Rates
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Transmission & Distribution Reliability
Above all, customers prioritize and deserve reliable and resilient electric service, and the LIPA Board has established ambitious goals to meet these needs. Since 2010, LIPA has committed a record $9.4 billion – triple the investment rate from a decade ago, as illustrated in Figure 11. This unprecedented investment is driving improvements in reliability, boosting resilience, and integrating cutting-edge system designs and technologies to deliver exceptional value to customers.
LIPA’s investment in reliability has led to significantly improved outcomes, including a 38% reduction in customers experiencing power outages, as shown in Figure 3.
Figure 3: System Reliability Results
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Power Supply & Clean Energy
LIPA is committed to meeting the goals of New York’s Climate Leadership and Community Protection Act “Climate Act.” LIPA has initiatives underway that directly contribute to the state’s clean energy goals in such areas as solar, storage, offshore wind, energy efficiency, electric vehicles (EVs), and building decarbonization, as described in the sections below. Figure 4 below shows progress towards Long Island’s portion of the state’s Climate Act goals, while Figure 5 shows the clean energy projects under development that will be added to Long Island’s electric grid by the early 2030s.
Figure 4: Progress Towards Long Island’s Portion of New York State’s 2025 Clean Energy Goals*
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Figure 5: Long Island Clean Energy Projects in Service by the Early 2030s
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