A proposed three-year $221 million rate hike by the Long Island Power Authority and its service provider PSEG Long Island should be slashed by two-thirds, according to a New York state regulator.
The New York Department of Public Service reviewed the proposed rate hike and determined in a report released May 15 that it should be lowered from $221 million to $48 million.
The DPS said LIPA and PSEG overstated the need for the rate increase by underestimating revenue from electricity sales and savings from lower interest rates. PSEG Long Island began controlling LIPA's operations in January 2014.
"The filing is the culmination of an intensive months-long review process, representing a landmark event in terms of improving public transparency and accountability," said James Denn, director of public affairs with the New York DPS.
The DPS report also recommended staff reductions as well as cuts to the utilities' paid advertising and tree-trimming budgets. The agency also stated that funding for employee pensions need to be increased.
LIPA and PSEG officials did not immediately respond to requests seeking comment. LIPA is rated Baa1 by Moody's Investors Service with a stable outlook.
