PSEG rates increase in three-year plan

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After a three-year freeze, certain PSEG Long Island electric rates are increasing. Provided the plan is approved by LIPA, the Delivery Charge portion of an electric bill will increase by 3.8 percent.

PSEG said that, on average, the increase will be $3.25 each month in 2016, followed by increases of $3.30 in both 2017 and 2018. These numbers are based on PSEG’s average customer, who uses 750 kilowatt-hours and pays $162 per month.

This increase plan is part of PSEG’s move to fund their five-year plan for infrastructure improvements, a new management system for major storms, set aside money for LIPA and improve its credit rating.

“It’s a plan which achieves top levels of service at lowest levels of cost,” said David Daly, PSEG Long Island President and Chief Operating Officer. Daly said that the two percent increase on the total overall bill is below the rate of inflation, which is between 2.5 and 2.8 percent. New York already has some the highest electric rates in the nation.

Daly also said that PSEG Long Island met 19 out of 20 targets for utility performance standards in their first year. “Everything we’re doing here is easily measurable,” he said. “The measures used to assess [utility] performance are very objective and not subjective.”

However, with price increases come concerns. AARP New York said in a statement that the rate increases would be a burden for people over 50, who already had trouble being able to heat their homes this past winter. “This move is a bad one for consumers and it’ll take a harsh toll on the 50+,” said Will Stoner, associate state director for AARP on Long Island in a statement. “We’re calling for close scrutiny of this rate hike proposal and for a stronger consumer voice to be included through the creation of an independent utility consumer advocate office.”

PSEG has said that it will hold public comment sessions through the yearlong approval process. The state Department of Public Service must also review the plan before LIPA approves it.

This news comes after the second round of refinancing LIPA debt, which was announced in Governor Andrew Cuomo’s Opportunity Agenda. Old debt of $2.5 billion would be shifted to the Utility Debt Securitization Authority, which has a higher credit rating and a lower interest rate. LIPA said that this move will save ratepayers $155 for the next three years.