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Long Island Power Authority Rate Reform Act

State Sen. Ken LaValle (R-Port Jefferson). File photo

New York state Sen. Ken LaValle (R-Port Jefferson) wants to make it more difficult for LIPA to increase rates for its customers.

LaValle and Assemblyman Fred Thiele (I-Sag Harbor) introduced the Long Island Power Authority Rate Reform Act in January, a bill drafted to require the not-for-profit public utility’s board of trustees to “protect the economic interests of its ratepayers and the service area,” in addition to the interests of the utility company when considering a rate increase proposal, according to a joint press release from the lawmakers. The bill would also prevent LIPA from increasing rates to offset revenue losses associated with energy conservation efforts, like the installation of energy-efficient appliances and lightbulbs. If passed, it would be mandated the board hold public hearings within each county overseen by LIPA prior to finalizing rate plans.

Currently, LIPA’s board is required to consider three criteria when a rate increase is proposed by the State Department of Public Service: sound fiscal operating practices, existing contractual obligations and safe and adequate service, according to the press release.

“While we have been working to keep Long Island affordable by implementing measures like the 2 percent property tax cap, LIPA approved the largest rate increase in its history,” LaValle said in a statement, citing a three-year rate increase approved by the board in 2015. “This measure will enable more community input by mandating a public hearing when considering rate changes. In addition, this legislation would provide the trustees with the tools necessary to reject rate increases that would cause additional financial burdens on Long Islanders.”

Brookhaven Town Supervisor Ed Romaine (R) and Port Jefferson Village Mayor Margot Garant each voiced support for LaValle’s bill.

“The record amount of investment in reliability, customer service and clean energy all come at a time when electric rates have remained roughly flat for decade,” LIPA Trustee Tom McAteer said in a statement through spokesman Sid Nathan. “Customer satisfaction is significantly higher and customers see PSEG Long Island crews tree-trimming and storm-hardening the electric grid throughout the year. Those are the facts. Not opinion. The Reform Act is working for our customers.”

The LIPA Reform Act was enacted in 2013 to revamp the utility’s operations, including empowering the board to decide on proposed rate increases. PSEG Long Island — which operates LIPA’s distribution systems — Media Relations Specialist Elizabeth Flagler said in a statement the company is reviewing the legislation and will be monitoring its status.

The proposed legislation comes as municipalities continue settlement discussions pertaining to lawsuits filed by Port Jeff Village and Port Jefferson School District — both in LaValle’s home district — in addition to the Town of Huntington and Northport-East Northport School District against LIPA to prevent the utility’s challenges to property value assessments at the Port Jeff and Northport plants. The result of the lawsuits could have a dramatic impact on Port Jeff Village and its school district, as both entities receive substantial property tax revenue as a host community of a LIPA power plant.

The Port Jeff plant is currently used about 11 percent of the time, during periods of peak energy generation demand, an argument LIPA has used against the village’s public pleas to repower its plant and give LIPA more bang for its tax-assessment buck. A 2017 LIPA study predicted by 2030 the Port Jeff plant might only be needed about 6 percent of the year, thanks in part to the emergence energy efficient household appliances. In August 2016 New York Gov. Andrew Cuomo (D) mandated that 50 percent of the state’s electricity come from renewable energy, such as wind and solar power, by 2030.

Bruce Blower, a spokesman for LaValle, did not respond to an email asking if the proposed legislation was drafted with the lawsuits in mind, or if a settlement was imminent. Both the senate and assembly versions of the bill are in committee and would require passage by both houses and a signature from Cuomo prior to becoming law.

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