How to understand your 2024 electric bills: Some charges are increasing
Power lines along Ruland Road in Melville on Feb. 13, 2020. Credit: Newsday/Steve Pfost
Kevin Sabatino had heard his PSEG bill was going up this year, but doesn’t understand why. Natural gas prices from supplier National Grid are lower than the prior year, yet average LIPA bills could jump more than $17 a month.
“It doesn’t make any sense,” said Sabatino, of Franklin Square. It doesn’t help that he’s paying an extra fee to opt out of smart meters, he said, calling the manual meter-reading charge “ridiculous.”
PSEG LI bills have begun arriving in customer inboxes and mailboxes with a series of updated charges. An analysis by Newsday of the multifaceted bills shows several areas affected by increases.
The basic service fee, for instance, which stood at 48 cents a day in 2023, went up to 51 cents a day, a 90-cent monthly jump. Delivery charges also went up, to 9.72 cents a kilowatt-hour from last year’s 9.16 cents, according to a breakdown provided by LIPA.
For customers who use an average 715 kilowatt-hours a month, that leads to delivery and system charges of $86.43 a month for the average January bill, compared with $81.62 in December, a jump of $4.81.
Power supply charges, meanwhile, increased to $73.78 in January, compared with $67.16 in December for the same user. LIPA said the increase is tied partly to a hedging strategy that stabilizes overall bills by lowering natural gas costs when wholesale prices spike, but potentially paying more when prices drop. Power supply charges jump month to month, but LIPA has budgeted for generally higher charges this year.
Another big piece of the change in this year's bills is the revenue decoupling adjustment, which allows the utility to credit or charge customers when factors like weather result in higher or lower sales for the year. LIPA last year returned to customers around $5.69 a month in decoupling revenue, but this year saw the trend even out, so that customers are paying about 4 cents a month more — to $5.73.
The New York State Assessment tax, which pays for Department of Public Service expenses, also is going up, from 41 cents to 46 cents. Revenue-based PILOTs are jumping to $2.39, from $2.11, to pay higher local property taxes, while the renewable energy charge, also called the DER or distributed energy resources charge, drops to 4.675 cents a kilowatt-hour, from 5.228 cents last year.
The delivery service adjustment, which allows annual true-ups from the cost of storms, labor costs and debt, jumps to 54 cents this year, compared with 6 cents last year.
In all, according to LIPA, the total customer bill for the same 715-kwh usage last year increases $17.72, to $166.99, from $149.27 last year.
LIPA trustees during a December board meeting unanimously passed the budget containing the increase. Board members asked questions about metrics for PSEG, but not the increase. Only ratepayer Fred Harrison, a Merrick homeowner and activist on energy issues, raised questions about it.
“We’re facing an almost 12% rate increase and I know that rate increase is not LIPA’s doing,” Harrison said. “A 12% rate hike is high.” He proposed that LIPA expand a program to install heat pumps in customer homes to help them lower heating bills, and to file a climate mitigation lawsuit against big-oil companies to help address costs related to climate change, including the $71 million budget for storm hardening.
Former LIPA board member Peter Gollon urged board members to get behind a state Legislative plan to transition LIPA to a fully public utility, which he said would save money and make LIPA more efficient.
At the January trustee meeting after the budget had passed, newly named chairwoman Tracey Edwards raised questions about costs and the bills customers would be facing in 2024.
Edwards likened LIPA’s 2024 work plan to renovations she and her husband have made in their home, and said, “When you are going to do some renovations, you have to make some decisions on what it is that you want to renovate.”
“I wanted to renovate everything,” she said, but her husband asked, “How much is it going to cost?”
“Our ratepayers have to focus on how they are going to manage their family finances with a $20 increase for their utility bill,” Edwards said. “So they have to make some adjustments. So we may have to make some adjustments based on how much things cost.”
LIPA-managed expenses jumped to $30 million this year, from $6.7 million last year. LIPA said most of the increase involves pending authorizations for money requested by PSEG that hasn't yet been authorized. Most LIPA expenses involve oversight of the contract, finances and regulatory compliance. LIPA’s total operating expenses are budgeted at $59.7 million, a roughly $8 million increase from 2023.
PSEG, which operates the system under contract to LIPA, saw its operating expenses jump $39.1 million, to $678 million this year. PSEG's managed expenses were up $1.1 million to $157.6 million, according to the budget.
In response to Edwards' questions at the trustees meeting, LIPA officials described their work plans for the year and the costs tied to staffing and consultants for each, noting that in some cases the work plans were required as part of LIPA’s oversight role.
They also noted that most of the budget to operate the utility relates to costs managed by or paid to PSEG, including nearly $80 million annually in a management fee for 20 PSEG executives. LIPA officials in working up the 2024 budget noted that LIPA’s review of PSEG’s proposed operating budget resulted in a $75 million reduction, and another $94 million reduction in the proposed capital budget.
LIPA by comparison has a budget for 89 full-time employees, but 18 of those positions are vacant. LIPA’s 2024 budget includes estimated consulting costs of $4.5 million, including a ransomware readiness and response assessment for $300,000.
Edwards said the board would continue to scrutinize the work plan, calling it a “work in progress.”
“There could be some things that are nice to have that we may say, 'It would be great to do that, but we don’t have the money for that right now,' ” she said.
Drew Biondo, a trustee who returned to the LIPA board this month, called a focus on LIPA's consulting budget the equivalent of “a tick on a dinosaur,” adding, “Any money LIPA staff is spending in oversight ultimately saves ratepayers money. It's money well spent.”
Kevin Sabatino had heard his PSEG bill was going up this year, but doesn’t understand why. Natural gas prices from supplier National Grid are lower than the prior year, yet average LIPA bills could jump more than $17 a month.
“It doesn’t make any sense,” said Sabatino, of Franklin Square. It doesn’t help that he’s paying an extra fee to opt out of smart meters, he said, calling the manual meter-reading charge “ridiculous.”
PSEG LI bills have begun arriving in customer inboxes and mailboxes with a series of updated charges. An analysis by Newsday of the multifaceted bills shows several areas affected by increases.
The basic service fee, for instance, which stood at 48 cents a day in 2023, went up to 51 cents a day, a 90-cent monthly jump. Delivery charges also went up, to 9.72 cents a kilowatt-hour from last year’s 9.16 cents, according to a breakdown provided by LIPA.
For customers who use an average 715 kilowatt-hours a month, that leads to delivery and system charges of $86.43 a month for the average January bill, compared with $81.62 in December, a jump of $4.81.
Power supply charges, meanwhile, increased to $73.78 in January, compared with $67.16 in December for the same user. LIPA said the increase is tied partly to a hedging strategy that stabilizes overall bills by lowering natural gas costs when wholesale prices spike, but potentially paying more when prices drop. Power supply charges jump month to month, but LIPA has budgeted for generally higher charges this year.
Another big piece of the change in this year's bills is the revenue decoupling adjustment, which allows the utility to credit or charge customers when factors like weather result in higher or lower sales for the year. LIPA last year returned to customers around $5.69 a month in decoupling revenue, but this year saw the trend even out, so that customers are paying about 4 cents a month more — to $5.73.
The New York State Assessment tax, which pays for Department of Public Service expenses, also is going up, from 41 cents to 46 cents. Revenue-based PILOTs are jumping to $2.39, from $2.11, to pay higher local property taxes, while the renewable energy charge, also called the DER or distributed energy resources charge, drops to 4.675 cents a kilowatt-hour, from 5.228 cents last year.
The delivery service adjustment, which allows annual true-ups from the cost of storms, labor costs and debt, jumps to 54 cents this year, compared with 6 cents last year.
In all, according to LIPA, the total customer bill for the same 715-kwh usage last year increases $17.72, to $166.99, from $149.27 last year.
LIPA trustees during a December board meeting unanimously passed the budget containing the increase. Board members asked questions about metrics for PSEG, but not the increase. Only ratepayer Fred Harrison, a Merrick homeowner and activist on energy issues, raised questions about it.
“We’re facing an almost 12% rate increase and I know that rate increase is not LIPA’s doing,” Harrison said. “A 12% rate hike is high.” He proposed that LIPA expand a program to install heat pumps in customer homes to help them lower heating bills, and to file a climate mitigation lawsuit against big-oil companies to help address costs related to climate change, including the $71 million budget for storm hardening.
Former LIPA board member Peter Gollon urged board members to get behind a state Legislative plan to transition LIPA to a fully public utility, which he said would save money and make LIPA more efficient.
At the January trustee meeting after the budget had passed, newly named chairwoman Tracey Edwards raised questions about costs and the bills customers would be facing in 2024.
Edwards likened LIPA’s 2024 work plan to renovations she and her husband have made in their home, and said, “When you are going to do some renovations, you have to make some decisions on what it is that you want to renovate.”
“I wanted to renovate everything,” she said, but her husband asked, “How much is it going to cost?”
“Our ratepayers have to focus on how they are going to manage their family finances with a $20 increase for their utility bill,” Edwards said. “So they have to make some adjustments. So we may have to make some adjustments based on how much things cost.”
LIPA-managed expenses jumped to $30 million this year, from $6.7 million last year. LIPA said most of the increase involves pending authorizations for money requested by PSEG that hasn't yet been authorized. Most LIPA expenses involve oversight of the contract, finances and regulatory compliance. LIPA’s total operating expenses are budgeted at $59.7 million, a roughly $8 million increase from 2023.
PSEG, which operates the system under contract to LIPA, saw its operating expenses jump $39.1 million, to $678 million this year. PSEG's managed expenses were up $1.1 million to $157.6 million, according to the budget.
In response to Edwards' questions at the trustees meeting, LIPA officials described their work plans for the year and the costs tied to staffing and consultants for each, noting that in some cases the work plans were required as part of LIPA’s oversight role.
They also noted that most of the budget to operate the utility relates to costs managed by or paid to PSEG, including nearly $80 million annually in a management fee for 20 PSEG executives. LIPA officials in working up the 2024 budget noted that LIPA’s review of PSEG’s proposed operating budget resulted in a $75 million reduction, and another $94 million reduction in the proposed capital budget.
LIPA by comparison has a budget for 89 full-time employees, but 18 of those positions are vacant. LIPA’s 2024 budget includes estimated consulting costs of $4.5 million, including a ransomware readiness and response assessment for $300,000.
Edwards said the board would continue to scrutinize the work plan, calling it a “work in progress.”
“There could be some things that are nice to have that we may say, 'It would be great to do that, but we don’t have the money for that right now,' ” she said.
Drew Biondo, a trustee who returned to the LIPA board this month, called a focus on LIPA's consulting budget the equivalent of “a tick on a dinosaur,” adding, “Any money LIPA staff is spending in oversight ultimately saves ratepayers money. It's money well spent.”
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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