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Feeling the Heat: Electricity to Cost Typical LI Households $130 More This Summer Than Last, Hevesi Report Predicts

Posted on: Wednesday, 7 June 2006, 09:00 CDT

By Mark Harrington, Newsday, Melville, N.Y.

Jun. 7--The large, in-wall air conditioner in the Wading River home of Raymond and Wendy McCann became little more than an "ornament" the spring day the couple received a bill for $614 in back-charges from LIPA to cover a year's worth of fuel-adjustment surcharges on their balanced-billing plan.

Now, "the air conditioner doesn't go on," even as the weather warms, said Raymond McCann, 63, a retired teacher living on a fixed income. "I'm not poverty-stricken ... but I don't feel like sending everything I make over to LIPA."

The McCanns won't be alone in facing sticker shock in their electric bills this summer, according to a report from State Comptroller Alan Hevesi yesterday. Charging that rates under the Long Island Power Authority have surpassed those of the former Long Island Lighting Co., Hevesi projects Long Island households will pay an average of $2,000 for electricity this year, and $830 this summer, including surcharges. That's a 17 percent increase, or $130 more this summer than last year. Consumers are "now feeling the full impact" of two relatively high surcharges levied last year, atop summer use rates that increase costs 10 percent in peak hours, Hevesi said.

"Although LIPA has said it won't raise rates this year, ratepayers will still be paying significantly more than last year," Hevesi said. "LIPA was created to lower the price of electricity on Long Island, but has failed to do so."

LIPA chairman Richard Kessel promptly fired back, urging Hevesi to "go after the real culprits - the oil companies."

"When you consider the fact that LIPA is not increasing its charges this year in the face of record gasoline, oil and energy price increases, and that it took almost eight years for LIPA's bills to reach the level of LILCO's 1998 bills ... LIPA is doing a pretty good job," he maintained in a statement.

Former LILCO executive Matthew Cordaro, now an energy expert at Long Island University, disagreed. After reviewing LIPA's recently submitted petitions to the PSC, he said, it became apparent the utility is stuffing a considerable amount of "inappropriate" expense into the surcharge. Among the expenses, he said, are standard power purchase costs that should be reviewed as part of the base electrical rate by the Public Service Commission.

While LILCO was no consumer darling, Cordaro said the current outrage is unsurpassed. "I don't think the outrage with LILCO was at all as intense as it is now with LIPA under their current situation," he said.

Assemb. Marc Alessi (D-Manor Park), who last weekend convened a forum to debate the regional power crisis and the pending acquisition of plants by British-based National Grid, said spiraling electric bills have exposed LIPA as a utility that "in its current form isn't working. We've passed the threshold. The term, 'Cheaper than LILCO'? That's a fabrication."

Kessel noted that LIPA's fuel and purchased power costs increased 244 percent between 1999 and 2005 - from $713 million to more than $1.74 billion. Two-thirds of the cost was related to higher oil and natural gas prices, he said.

But the figures mean little to Raymond McCann, who said his options are running out. "It's gotten to the annoying point where it seems I can't cut back enough - without cutting the electricity off entirely," he said.

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Copyright (c) 2006, Newsday, Melville, N.Y.

Distributed by Knight Ridder/Tribune Business News.

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Source: Newsday, Melville, N.Y.

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