National Grid among utilities hiking rates as Long Island residents struggle to pay bills

Utility rate hikes that have driven customer bills to record highs the past two years show few signs of easing, as essential services such as water, power and communications continue to eat up more of Long Island consumers’ monthly income.

The soaring costs have led to customers — especially those living on limited and fixed incomes — being late paying their gas and electric bills. The state has stepped in with relief programs, but experts say arrears, while tamped down, could begin to rise again.

“You combine the cable, the water, the power the gas, it all hurts when you have a limited budget,” Mary Comparato, a widow from Setauket. Her electric bill is budgeted at $227, her gas bill at $185, Optimum at $100 a month and the water bill $60 per quarter, she said.

National Grid announced it is seeking a 21% increase, or $34.66 a month, in gas bills next year, after commodity prices tied to then-tighter gas supplies and the Russian invasion of Ukraine spiked during the past two years. That comes despite a notice from the state Public Service Commission last month that energy prices could decline slightly this summer, as prices for products such as natural gas come down.

National Grid said the increases, which could be offset by $6 or $7 a month by lower gas prices, were "largely driven by a combination of inflation and cost factors beyond National Grid’s immediate control.”

Meanwhile, Liberty Utilities, the company that took over a large section of Nassau County’s water customers, announced it, too, would hike rates an average 34% next year, after customers of the former New York American Water bemoaned price hikes for years. Liberty in May said the requested increases were tied to “necessary plant investments, high tax burdens, the installation of advanced metering infrastructure, proposed low-income and arrearage management programs, and a fee-free program for electronic payment of Liberty NYW invoices.”

Rates for Suffolk County Water Authority customers jumped 4.8% in July, while a monthly service charge jumped 4.9%.

Electric, gas prices not expected to decline

Experts following the trends say they don’t expect prices to come down anytime soon, if ever.

“The horizon doesn’t look good,” said Bill Ferris, the New York legislative representative for AARP, which advocates on behalf of seniors. “The utilities continue to come in and ask for double-digit rate increases. It’s happening in upstate and New York City and Long Island. We don’t see that changing anytime soon. And that is a problem of how rate cases are done in New York.”

Advocates for businesses and their employees say that while rising expenses for electric, water, gas and communications are only part of the consideration when considering where to locate, the greater share they can take is making an impact. 

"Utility costs are always at the forefront when businesses analyze whether to remain on Long Island and our ability to attract businesses to relocate to Long Island," said Kyle Strober, executive director of the Association for a Better Long Island, which represents developers who are among LIPA’s biggest customers.

But it's not just businesses feeling the sting. 

Alan Ascher of Wantagh has felt it too, and is doing what he can to trim utility costs.

“My wife and I no longer work, and when you’re no longer working and prices start jumping all across the board a great deal, you do start taking a much harder look at what you’re paying,” Ascher said. He recently signed up for a community solar program called Common Energy that cuts his electric bill by 10%, a small amount but cheaper than if he had to buy solar panels himself.

Community solar programs are popping up across the state, giving those who can’t put solar panels on their own roof access to remotely located solar arrays.

“The cost of living here is ridiculous,” Ascher said, “and my experience is nothing is ever going down.” A year ago, he and his wife looked at homes in Delaware based on costs and taxes, but that's been put on hold

When his PSEG bill spiked more than $200 in April, Ascher called at once and the utility acknowledged an error. The monthly PSEG bill is usually around $30, while his Common Energy bill is around $130 a month. “When you’re no longer working and making sure you’re not going to run out of money, you take a much closer look” at the bills, he said.

Arrears on bills are increasing

Ian Donaldson, a policy aide for the New York Public Utility Law Project (or PULP), which advocates for low-income customers in utility matters, said that despite increased state funding for affordability, “We’re seeing arrears start to go up” again as the weather warms and the summer cooling season nears.

“People’s usage is going to rise and electric bills could go much higher,” Donaldson said. “It’s just going to put people further and further into debt.”

In April, PSEG reported to the state that there were 116,528 residential customers more than 60 days late paying some $90 million in back-due electric bills, and 7,850 had received final termination notices that month.

For National Grid, there were more than 55,550 residential customers of its 600,000 on Long Island at least 60 days late paying around $46.5 million in gas bills as of April. About 17,000 had received final termination notices that month.

The arrears problem isn't exclusive to energy. At the Suffolk County Water Authority, more than $13 million is past due over 90 days, up from $4 million before the COVID pandemic, chief executive Jeff Szabo said.

"Certainly the [SCWA] board and I are extremely concerned about the amount of overdue bills we are seeing right now," Szabo said, even though the water authority bill is likely "the lowest utility bill that most of our customers pay, and because we bill quarterly, we may not be at the forefront of our customers' mind.”

Some of those arrears are being alleviated through a federal Low Income Household Water Assistance Program, for which eligible customers can receive up to $2,500 to help pay overdue bills. 

Most utility relief programs to help stem the tide of shut-offs are aimed chiefly at the most vulnerable customers who are already receiving social services to help with other costs, such as health care and food.

Most utilities offer programs, some with state and federal funding, that help low- and moderate-income customers pay their bills when costs balloon beyond their ability to pay. Programs are aimed at making sure low-income customers don’t spend more than 6% of their income on utilities. The state also recently passed a $200 million budget item that will fund arrears forgiveness for those who were not eligible under prior low-income programs, an attempt to help address affordability issues for a bigger cross-section of customers in the state.

In regulatory circles, affordability is becoming an increasingly loud refrain. AARP has been on a yearslong campaign to help lower the amount customers pay for utilities, including energy, in their monthly budgets.

The campaign includes advocating for new laws such as a bill currently in the State Legislature that automatically would enroll lower-income customers into programs that offer energy discounts. At present, utilities require prospective participants apply and provide proof of eligibility, which can lead to many who are eligible failing to enroll because of lack of awareness.

But there are larger, looming concerns. AARP is among groups that, while supportive of climate goals, are concerned about how the programs will impact customer bills. The state just passed a measure that calls for a study of the impacts of recent climate legislation on customer costs.

Consumer representation: A push for legislation

AARP also is pushing for bills that would help fund greater consumer representation in rate cases. As it stands, Ferris said, customers pay all the costs for utilities to present rate cases, but consumer advocacy groups have to pay their own way.

“You can’t have a process in Albany completely dominated by companies seeking to increase customer rates every three years without having a robust representation by consumers who actually are paying the bills,” Ferris said.

A state bill to help fund advocates for consumers in rate cases is needed, added Donaldson, of PULP, because there’s currently little incentive for groups like PULP to get involved.

Beyond that, Donaldson said, PULP believes legislative work is needed to make sure fixed charges on utility bills cover only the cost associated with the services customers are receiving, and to reward those who use less energy, rather than offer discounts when usage increases.

You can’t have a process in Albany completely dominated by companies seeking to increase customer rates every three years without having a robust representation by consumers who actually are paying the bills.

— Bill Ferris, New York legislative representative for AARP

Middle-class customers with affordability concerns aren’t without options. Programs backed by the state allow customers to cut the cost of energy utilities by participating in community choice programs for solar, and municipal programs for natural gas discounts.

Brookhaven Town already has begun a community choice program that will allow natural gas customers to buy gas at an anticipated discount from National Grid’s price through an administrator that works with the town. Gas customers in the town are automatically enrolled but can opt out.

Comparato, the Setauket ratepayer, had the chance to potentially save on her natural gas bill when Brookhaven kicked off the program earlier this year.

But the two-year lock-in rate was higher than the current price of National Grid gas, which has hit recent lows after spiking last fall and winter. The program is designed to temper the volatility that saw gas prices rise to record levels last fall. In the end, Comparato, frustrated with the process, opted to stay with National Grid. “I got mad,” she said.

Solar companies have been offering customers who subscribe a 10% to 20% discount on PSEG power if they opt for community solar power from specially contracted providers. SUNation chief executive Scott Maskin said the company has been subscribing upward of 700 customers a month for the service.

A growing number of Long Islanders — some 60,000 — have opted to put power plants on their roofs with solar panels that can provide all or most of their power, and pay for themselves in three to five years with reduced bills.

Southampton is moving ahead with a community choice program that will allow enrolled residents to not only opt for more renewable power for their energy but also potentially discounted power. Councilman John Bouvier said he expects the first requests for proposals for solar farms to supply energy to the program to go out this summer.

Electricity rates: LIPA's perspective

Utilities themselves are particularly sensitive to affordability issues. LIPA, which owns the electric system, last month gave a presentation that put its rates in perspective. LIPA noted its average rates have increased 55% over the past 25 years, while nearby utilities such as Eversource and Con Ed saw increases of 132% and 95%, respectively.

LIPA’s all-in cost per kilowatt-hour last year was just under 24 cents a kilowatt-hour, while ConEd’s stood at 27.4 cents, and PSE&G of New Jersey’s stood at around 15 cents. PSEG Long Island, a sister company of PSE&G, manages the LIPA grid under a contract that expires in 2025.

The LIPA/PSEG power supply charge, which accounts for roughly half of customers' bills, is composed chiefly of costs to fuel Long Island power plants, most of which operate mainly on natural gas. Gas costs have moderated in recent months, but have seen highs since the February 2022 start of the war in Ukraine. Fuel oil prices also have seen record spikes.

The delivery portion of electric bills has seen moderate increases, too, in the past decade, but recent increases below 2.5% haven't been enough to trigger a rate review by the state.

Some argue that a plan currently under review by the State Legislature that would fully municipalize LIPA could be one of the factors that pushes the plan toward final approval. The utility could save close to $1 billion over a decade if it were to eliminate the profit incentive of the current public-private partnership that has PSEG running the system. By “making the switch, LIPA will save money, and Long Island ratepayers will get lower bills and better service,” said Lisa Tyson, executive director of the Long Island Progressive Coalition, an advocacy group.

A bill to facilitate the plan is expected to be introduced later this year or early next. PSEG says the current model is best for customers, and some even say selling the utility to a private entity could do the trick.

Whichever model is chosen for LIPA, advocates for businesses and consumers say, the savings have got to revert to customers in the form of lower rates.

“LIPA needs to keep ratepayers' wallets in mind,” said Strober, of the ABLI business group, which advocated for LIPA’s 10-year push to lower the taxes it pays for power plants, with the hope of real bill reductions for ratepayers.

Strober conceded that the reductions thus far haven’t shown up, saying, “But I hope there will be reductions.” He’s pressing for LIPA to lower its debt and the $350 million or so a year it pays in interest payments.

“Until we address high taxes and high utility costs, they will always be a hindrance on our ability to attract and retain businesses in our region,” he said.

Newsday wants to hear from Long Islanders about how they face the region's cost of living. Tell us your story here.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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