Long Island energy bills trending higher in 2024, even as fuel prices stabilize

Even with natural gas prices relatively stable, the cost of electricity fueled by natural gas has been increasing on Long Island in recent months, while gas bills from National Grid could jump by $31 a month if a pending rate increase is approved.

The power supply portion of PSEG Long Island bills has seen increases in five of the past seven months, including 16.62% in May, according to published figures. The charge dropped 12.73% in April after increases the prior three months. PSEG operates the system for grid owner LIPA under a contract that expires next year.

The power supply charge, which makes up about half of customer bills, jumped another 7% in June before dropping 7.47% in July. Customers probably didn’t feel the May pinch because electricity use tends to drop in spring, before spiking due to summer heat. LIPA's basic fixed-service charge also increased this year to 51 cents a day from 48 cents. 

Richard Siegelman, a retired teacher in Plainview, said the May increase pushed the all-in price of energy for his bimonthly bill that month to around 27 cents a kilowatt-hour (total bill divided by kWhs used), one of the highest since he’s been tracking it. With high temperatures this summer, he said he’s bracing for a big bill in July.

LIPA last year had telegraphed that bills would increase $20 a month higher for average customers this year. In a statement, the utility downplayed the 2024 increases, noting that on a year-over-year basis, the average increase this year compared with last year is only about 1.5%, or 10.66 cents a kilowatt-hour, compared with 10.51 cents last year.

LIPA noted that monthly power supply charges are based on forecast fuel prices, which are adjusted the following month to reflect actual costs, accounting for some of the volatility. Newsday in December reported typical PSEG bills in 2024 would be $186.71 a month, a jump of $19.43 from the average $167.28 bill in 2023. Most of the increase was tied to higher anticipated costs for power and fuel in 2024, and the loss of certain cost offsets in 2023 that wouldn’t be around to moderate bills this year. A new offshore wind farm to feed the South Fork is adding around $1.35 to average monthly bills, LIPA said.

LIPA’s forecasted $20-a-month increase may pale in comparison with increases faced by National Grid’s Long Island gas customers over the next three years, if its planned increase is approved by the state Public Service Commission this summer. National Grid and the state Department of Public Service, the administrative arm of the PSC, reached a settlement agreement on the proposed three-year rate hike in May. The PSC could vote on the increase in its August or September meetings. 

Papers recently filed with the state show that Long Island National Grid customers whose current monthly bills are $149.60 for using 83 therms would see those bills increase 21.12% to $181.19 in the first year of the plan, potentially as soon as September.

In the second year of the plan, that same bill would jump to $194.88 after a 5.38% delivery rate increase; and to $212.71 by the end of the third year, an increase of 9.70%.

The increases assume relatively stable natural gas commodity charges during the three-year period. An increase in the cost of natural gas could hike bills substantially, or lower them if gas prices come down.

A Newsday review of commodity prices on customer bills this year shows that the cost of gas to residential National Grid customers declined steadily from January to May from 55 cents to 40 cents a therm, before showing moderate increases in June and July. Summer gas prices for 2024 are significantly higher than their 2023 lows, however. 

"I strongly object to yet another significant price increase in our monthly energy bills," Hempstead resident Nick Rosenberg wrote to the state in opposing the increase. "It’s yet another attack on residents’ ability to pay their monthly bills coming at an unfortunate time of high costs and slowing economy."

Unionized workers generally supported the rate hikes, according to the more than 1,000 public comments listed by DPS, with union members saying National Grid’s plans would help create "well-paying union jobs." But ratepayer advocates such as the Public Utility Law Project said increases "will harm customers, especially low-income customers, who are already struggling to afford their bills."

National Grid in a statement said the rate plan includes "critical improvements in infrastructure maintenance and upgrades that will enable us to continue providing reliable, affordable service while advancing the state’s energy priorities."

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.