One year after the state LIPA Reform Act put the New Jersey utility PSE&G in charge of Long Island’s power grid, State Assemblyman Fred Thiele issued a scathing letter this week saying things have only gotten worse.
Mr. Thiele originally voted against the 2013 reform bill because, he said, he thought it wouldn’t help ratepayers, but would transfer Long Island’s energy future to a New Jersey-based company and eliminate regulatory checks and balances by New York State.
For those who were skeptical and thought nothing would change, you were wrong,” he said. “It’s gotten worse.”
Mr. Thiele said that, while LIPA and PSE&G’s local branch, PSEG-Long Island, promised that electric rates wouldn’t increase for three years, “they were only taking about the delivery charge portion of the electric bill.”
“We have seen substantial increases in the power supply charge, which makes up about 50 percent of the electric bill,” he said. “The power supply charge spiked 81 percent between September and December, in no way reflecting the actual market price of natural gas. Ratepayers saw increases in the power supply charge in seven of the last 12 months.”
Representatives for PSEG-Long Island did not respond to requests for comment on Mr. Thiele’s assertions.
Mr. Thiele also blasted LIPA’s awarding in December of just 122 megawatts of renewable energy contracts, when the utility company’s original plan was to contract for 280 megawatts of clean energy.
“It also rejected a wind energy project off-shore of the East End that would have reduced reliance on fossil fuel and made the South Fork more energy reliant,” he said.
The Deepwater ONE wind project off the coast of Montauk was slated to have a capacity of above 200 megawatts.
At the December awarding of the bids, LIPA staff recommended the utility’s board solicit another 160 megawatts of renewable energy bids, but the utility company has not yet done so. As of Jan. 1, 2015, PSEG-Long Island took control of LIPA’s power-resource planning division, which makes decisions about new and existing renewable energy and power plant needs.
“On the South Fork of Long Island, we have been told for years that residential growth had increased the demand for power. It was this demand for power that resulted in the need for increased transmission lines that were controversial first in Southampton, and now in East Hampton,” said Mr. Thiele. “The answer to these transmission lines was clear. We needed to generate additional renewable power to be self-sufficient on the South Fork.”
Mr. Thiele also criticized the utility for taking on new debt when ratepayers had been told for years that LIPA’s debt was due to the Shoreham nuclear power plant, which was shuttered in 1986. Much of the company’s debt is no longer due to the Shoreham plant.
LIPA still has in excess of $7 billion in debt, most of which is no longer related to Shoreham, and the utility issued $799 million in new debt this year.
“Increased debt ultimately means increased rates,” said Mr. Thiele.
Mr. Thiele also blasted PSEG-Long Island’s handling of a new seven-mile long transmission line placed along a series of East Hampton Village backroads to Amagansett last winter.
“They refused to apply the same policy that had been established by LIPA for the burial of transmission lines in Southampton,” said Mr. Thiele. “Then, they simply refused to talk to the community and elected officials. Now they are defending lawsuits from both town government and community residents. They have demonstrated a level of arrogance that is reminiscent of the LILCO/Shoreham days. I can assure PSEG-LI that increases in rates, increased LIPA debt, abandonment of renewable energy promises, and utter disdain for long established community interests like rural character and the environment is not the formula for increased consumer satisfaction.”
Mr. Thiele recommended that the state create a consumer utility advocate and restore the oversight that was removed from the State Comptroller and State Attorney General under the reform act and give the Public Services Commission power to oversee Long Island’s energy future, instead of “granting an unregulated monopoly to an out-of-state company.”
“These should be the top priorities for the 2015 session,” he said.
