PSEG delivery charge up 4.5% starting this month

Customers opening their PSEG Long Island bills this month will see 4.5% increases in their delivery rates and monthly service charges for 2022, even as LIPA says bills will be flat or lower overall for the year.

Starting this month, the delivery charge increases to 9.1 cents a kilowatt-hour from 8.71 cents in 2021. The monthly service charge rises from $13.20 to $13.80, according to PSEG Long Island’s newly released rate schedule.

That may sound like small potatoes, but for bigger residential users of electricity, the changes can add up, particularly if LIPA power supply charges increase, as they did this month compared with January a year ago.

The power charge is 10.6 cents this month, compared with 9.02 cents a year ago, although it’s lower than December’s 11.86 cents.

In a statement, LIPA said customers shouldn’t focus on the delivery-rate increase alone to determine where bills are going.

Lower projected customer usage this year and other offsetting factors should combine to lower or stabilize bills, officials said.

"Many factors determine a customer’s bill, including usage, commodity pricing, and energy efficiency," the authority said.

"Considering all factors, the average customer’s bill should remain relatively unchanged for 2022," LIPA said.

But Douglas DiCeglio, president of Utility Rate Analysis Consultants, a utility bill reviewing service in Lynbrook, said delivery and service charges play a big role in the monthly bill.

"It boils down to standard mathematics," DiCeglio told Newsday. "LIPA/PSEG has implemented a 4.5% increase in their residential delivery rates effective Jan. 1."

For instance, heavier electricity users with above-average demand of, say, 900 kilowatt-hours each month, delivery charges will increase to $81.90 beginning this month, compared with $78.39 in 2021.

Also, customers will have to send another 60 cents a month LIPA’s way — $7.20 a year — for a basic connection to the LIPA grid.

State agencies have indicated a greater than 2.5% increase in the delivery, or base, rate should trigger a comprehensive state review of overall rates, which the state hasn’t conducted since 2015.

The 2013 LIPA Reform Act legislation says LIPA must submit for review to the state Department of Public service "any rate proposal that would increase rates and charges and thus aggregate revenues of the authority by more than 2.5% to be measured on an annual basis."

According to a 2015 report on the state comptroller’s site: "Any proposed rate increase above 2.5% would be subject to review and recommendations" by the DPS Long Island branch.

Despite a similar statement on the DPS website, officials from the state Department of Public Service and LIPA say a comprehensive review of overall rates isn't warranted.

DPS spokesman James Denn pointed to a Nov. 3 letter from Robert Grassi, PSEG Long Island's assistant counsel for regulatory affairs, agreeing with LIPA that the "gross aggregate revenue increase for 2022 was 2.16%, below the level that would trigger a full rate review."

Delivery-rate increases aside, the overall cost of electricity on Long Island has been creeping up over the past two years and could increase again this year, according to Newsday calculations based on LIPA budget documents.

For 2020, for instance, LIPA said typical residential customers used an average 781 kilowatt-hours a month, and that monthly bills averaged $169.42.

That meant the kilowatt-hour cost for energy that year for average residential customers was 21.69 cents.

For 2021, residential customers used an average 766 kilowatt-hours a month, and monthly bills averaged $172.82, LIPA reported.

That translated to a per kilowatt-hour charge of 22.56 cents, which is approximately a 4% increase from 2020.

LIPA budget documents predict that residential customers in 2022 will consume an average 716 kilowatt-hours a month, for total monthly bills of $169.28.

That would translate into energy costs of 23.64 cents a kilowatt-hour this year, or about a 4.6% increase from last year.

Plainview ratepayer Richard Siegelman did the calculation for his September-November bills for the past eight years and found his rate rose from 20.9 cents in 2014 to 23.9 cents in 2021.

"Overall, the bills are manageable for me," Siegelman told Newsday. "For people with lower incomes, I’m sure it can be a problem."

LIPA said the Newsday calculation could change if, for instance, average usage goes up, or savings from energy efficiency are added in.

"If you increase the assumed per customer use, you increase the total sales, but the revenues stay the same," LIPA spokesman Tom Locascio said in an email. "This means per unit kwh price declines. One can’t adjust one number without adjusting the others."

He said any difference between the budgeted and actual delivery revenues results in a dollar-for-dollar refund to customers in the following year.

Rate analyst DiCeglio said that’s beside the point.

"They like to use fancy words and confusing calculations, but the bottom line is that they will be collecting 4.5% more for the same kilowatt-hour [delivery charge] than they collected last year," DiCeglio said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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