Suffolk County elected officials want New York Comptroller Thomas DiNapoli to audit a proposed three-year rate hike from the Long Island Power Authority and its service provider PSEG Long Island after a state regulator acknowledged errors with its review of the proposal.
The New York Department of Public Service (DPS) released a May 15 report stating that LIPA and PSEG overstated needs for a $221 million rate increase over three years and that it should be slashed by 78% to $48 million.
On June 8, the department announced on that there was a $124 million "miscalculation" with its initial review and was now urging that the planned rate hike be reduced by 37% instead of 78%.
Suffolk County Comptroller John M. Kennedy said at a June 9 press conference with officials from the Town of Brookhaven that the calculation error from the New York DPS demonstrates why the rate increase needs to be reviewed by DiNapoli's office.
"PSEG-LI, in seeking multi-year rate increases, is negating the very real constraints that all governments, including Suffolk County, must now operate under," said Kennedy in a statement. "If the rate increase is adopted, Suffolk County stands to pay almost $1 million a year more following the final impact of the 36 month rate increase plan. It is unwarranted, it is too high, and the increase should be summarily rejected."
Jennifer Freeman, a spokesperson for DiNapoli, said his office is reviewing the request for an audit of PSEG and LIPA.
"While the Comptroller does not have statutory authority related to utility rate setting, this office is looking at the challenges that persist for LIPA and ratepayers," said Freeman.
The New York DPS said in its initial report recommending a reduction in LIPA and PSEG's rate hike that the agencies underestimated revenue from electricity sales and savings from lower interest rates. PSEG Long Island began controlling LIPA's operations in January 2014.
LIPA is rated Baa1 by Moody's Investors Service with a stable outlook and A-minus with a negative outlook by Standard & Poor's.
