Ratepayers oppose PSEG-LIPA rate hike proposal at hearing in Riverhead

Ratepayers spoke out against the PSEG-LI and the Long Island Power Authority three-year rate plan last night at a public hearing in Riverhead.

It was the first of four public statement hearings being held this week on the proposed plan, filed with the state Department of Public Service on Jan. 30, that calls for increases in the utility’s delivery rates of approximately 2 percent per year beginning in 2016.

The plan would increase revenues over the three-year period by about $221 million to cover expenses associated with infrastructure and technology improvements, PSEG-LI says.

According to the utility, the rate increases would increase the total bill of a “typical residential customer” by an average of $3.25 per month in 2016, by an average of $3.30 per month in 2017 and by an average of $3.30 per month in 2018.

Assemblyman Fred Thiele blasted the rate plan, which he called “the largest increase in the delivery charge in the history of LIPA.”

“Equally disturbing is the increase in indebtedness,” Thiele said in a statement read by aide Laura Tooman, who said Thiele was in Albany. “LIPA plans to borrow up to $400 million in each of the next four years with an anticipated debt load of at least $8.6 billion by the end of 2018, which would saddle Long Island with the highest debt load in the history of LIPA.”

LIPA’s total indebtedness was nearly $6.9 billion at the end of fiscal year 2013. (Audited financial statements for 2014 are not yet available on the LIPA website.)

The proposed rate plan would invest $30.8 million — of the $221 million in revenue to be raised over the three-year period — in debt reduction, according to PSEG-LI’S Jan. 30 cover letter to Public Service Commission secretary Kathleen Burgess.

Debt reduction will help to improve LIPA’s currently low bond ratings, which will lower future costs and consumer rates, PSEG lawyer Matthew Weissman said last night during the information session that immediately preceded the public statement hearing, which began at 6:45 p.m. at Riverhead Free Library.

Thiele called on LIPA to prepare an economic impact statement for the plan. “Long Island is only just coming out of “the great recession,” he said, and “economic conditions remain fragile and uncertain.” An electric rate increase would be “a drag on the recovery” and “will further impact negatively Long Island’s ability to compete.”

“Rather than sending glossy mailers to its customers crowing about customer satisfaction when it is ranked 95th out of 95 in the nation, PSEG-LI could better use existing dollars to stabilize rates, reduce debt and keep its commitment to renewable energy,” Thiele said.

Thiele criticized LIPA for extending its contract for upstate nuclear power costing $159 million last year, while at the same time reducing its plan to build 280 megawatts of clean energy to 122.1 megawatts and rejecting offshore wind energy plans.

Renewable energy advocates joined Thiele’s call for PSEG and LIPA to build more clean energy to meet Long Island’s needs.

“The earth is entering a period of severe and detrimental climate change caused by our burning of carbon-containing fossil fuels releasing greenhouse gases, particularly carbon dioxide, in ever-increasing amounts,” said L.I. Sierra Club chairperson Jane Fasullo. “To limit the extent of this climate change, we must rapidly move from carbon-based energy to carbon-free energy such as that which comes from wind and solar.”

LIPA lags far behind in its adopted goals for renewable energy production as per its 2010 plan, which is still in effect, Fasullo said. That adopted plan incorporated a 2009 N.Y. state goal of reducing greenhouse gas emissions to 80 percent below 1990 levels by 2050 — the “80 by ‘20 plan.”

PSEG’s rate case makes no mention of this mandatory transition to renewable energy sources, Fasullo said. It does not mention replacing fossil fuel power with renewable energy on any scale large enough to meet the state’s or LIPA’s own goals, she said. Further, PSEG plans to bring new fossil fuel generation facilities on line, which Fasullo called “simply not acceptable.”

Other ratepayer opponents of the plan questioned PSEG-LI’s commitment to Long Island and wondered if the utility is more concerned with its own power generating plants in New Jersey and Connecticut.

Gail Lynch-Bailey of Middle Island, who described herself as “an advocate for Caithness” [a company that operates a 350 mw gas-fired power generating facility in Yaphank, where it proposes to build a second, 750 mw gas power plant] said, “We need a smorgasbord of energy that is both renewable and reliable, because the sun always doesn’t shine. Sometimes it snows and it’s dark a lot, especially in winter.”

“There have been no assurances that PSEG-LI is in it for Long Island,” Lynch-Bailey said, “and not the plants they have in Connecticut and New Jersey. Is that what this delivery rate increase is all about?” She urged rejection of the proposal.

Daniel Tomaszewski, president of the Longwood Central School District Board of Education, accused PSEG-LI of “protecting jobs and tax base in New Jersey and Connecticut instead of right here on Long Island.”

He accused the utility company of “deceiving” ratepayers “by asking us to pay more for power from PSEG plants in New Jersey and Connecticut as the company delays new efficient clean energy that would serve Long Islanders here on Long Island,” he said, referring to the Caithness II proposal.

“After all, wouldn’t our energy costs be less if we purchase power from a plant like Caithness II rather than paying more for imported electric power?” Tomaszewski asked. “It makes me wonder if PSEG-LI is simply acting in its own interests.”

Patchogue resident Paul Lozowsky, director of the Utility Consumer Advocacy Project said, “L.I. ratepayers pay 22 cents per kilowatt hour, compared to 8 cents to 15 cents in other places — before the debt and before the surcharges,” he said.

“This deal is a disaster.”

Don Dailey of International Brotherhood of Electrical Workers Local 1049, which represents employees of PSEG-LI and National Grid, was the only person who spoke in support of the rate plan, which he called “a sound investment in the future of Long Island.”

LIPA trustees, not PSC, have final say over rate plan 

Although the Public Service Commission will conduct hearings and collect written comments on the rate case, it is the nine-person LIPA board of trustees — not the Public Service Commission — that will ultimately decide whether to approve the rate plan proposed by PSEG-LI and the authority’s own staff.

Public Service Commission staff will make recommendations on the proposal to the LIPA trustees, Julia Bovey, director of the Long Island branch of the state’s Department of Public Service, said during a question-and-answer period prior to the beginning of the public statement hearing held last night at Riverhead Free Library.

DPS recommendations must be made to LIPA trustees by Sept. 27 and LIPA trustees will have 30 days to disagree with the recommendations. If they do disagree, they must hold a public hearing within 30 days of notifying DPS of their disagreement and must announce their final decision within 30 days after the hearing period.

“We’re very confident that the LIPA board of trustees will accept our recommendations,” Bovey said.

That the LIPA trustees have ultimate authority on a proposed rate plan advocated by their own paid staff did not sit well with Aquebogue resident Joan Zaniskey.

“What’s the point of all this?” she asked.

Additional hearing dates/places

In addition to last night’s session, the Department of Public Service has scheduled the following information forums and public statement hearings:

Tuesday, March 3, 2015
William H. Rogers Legislative Building
Legislative Auditorium
725 Veterans Memorial Highway
Smithtown, NY 11787
Information Session: 6 p.m.
Public Statement Hearing: 7 p.m.

Wednesday, March 4, 2015
Queens Library at Seaside
116-15 Rockaway Beach Blvd.
Rockaway Park, NY 11694
Information Session: 1 p.m.
Public Statement Hearing: 2 p.m.

Wednesday, March 4, 2015
Theodore Roosevelt Executive & Legislative Building
Legislative Chambers
1550 Franklin Avenue
Mineola, NY 11501
Information Session: 6 p.m.
Public Statement Hearing: 7 p.m.

Review the rate plan proposal

A copy of PSEG Long Island’s three-year rate proposal may be viewed on the Department’s website by searching Matter 15-00262 (at www.dps.ny.gov, enter Matter 15-00262 in the box labeled “Search by Case Number”) or by clicking here.

How to submit written comments

Written comments may be submitted until July 1. Comments should be addressed to DPS Secretary Kathleen H. Burgess and should refer to “Matter 15-00262 PSEG-LI Electric Rates.”

By email: secretary@dps.ny.gov

By mail or delivery:
Hon. Kathleen H. Burgess, Secretary
New York State Department of Public Service
Three Empire State Plaza
Albany, New York 12223-1350.

All written comments will become part of the record considered by the Department.