By Hank Russell
The Long Island Power Authority (LIPA) recently introduced its 2025 operating budget. As part of the proposed $4.34 billion budget, it calls for a monthly rate increase of $7.27, which will be 3.9% higher than it was in this year’s budget. The budget would also be 3.5% larger than this year’s budget of approximately $4.19 billion.
LIPA attributed its rate increases to higher debt service requirements, rising power supply costs and an anticipated increase in electricity usage by its residential customers. The power supply cost increases include an $86 million increase to secure Regional Gas Initiative allowances, which, LIPA claimed, was driven by higher market prices; an additional $17 million to purchase zero-emission credits; and $9 million more for renewable energy.
However, the authority pointed out, the increase are partially offset by $24 million in pass-through property taxes on its power plants. They also received “the benefits of tax settlements” as well as a $33 million savings in purchased power and commodity cost; this includes an estimated savings of nearly $4 million for its first pre-paid energy transaction.
For extreme weather events, LIPA has kept the amount of its storm budget to be the same at $84 million.
LIPA has noted that, between 1997 — when LIPA took over the electric system — and 2024, its rates have gone up 44%, which, according to the utility, is the lowest among other regional utilities.
Also included in the proposed budget, LIPA will continue to invest in the electric grid. This includes adding transmission projects for offshore wind and the development of a new operations yard.
One critic of the budget was Assemblyman Doug Smith (R-Ronkonkoma), who is a member of the Assembly’s Energy Committee and Commission on the Future of the Long Island Power Authority. He blasted the utility for proposing a rate hike. Smith recently sponsored legislation that would repeal a part of the Public Authorities Law, which prohibits LIPA from purchasing hydroelectric power at a reduced rate.
“We can’t afford to pay any more,” Smith said. “We need to expand our approach to powering Long Island. This includes repealing laws and regulations that restrict the purchase of lower cost sources of power by LIPA, as well as ending President Biden’s war on domestic energy production to lower the price of oil and gas and restore American energy independence. In Albany, I will continue providing a needed reality check about the costs facing Long Islanders.”