LIPA to Cut Rate Hike By 1.6%


December 11, 2008


The people have spoken. And, it turns out, LIPA chief Kevin Law listened.

Law announced Thursday that he was trimming the proposed 2009 bill increase from 4.8 percent to 3.2 percent -- a move that would see an increase of $4.98 on the typical LIPA bill, instead of what amounted to an increase of about $7.50 for average users.

The proposal, announced Thursday morning at a meeting of LIPA trustees in Uniondale, still needs to be voted on by trustees. That vote is expected to come sometime Thursday.

In making his announcement, Law cited recent conversations with Gov. David A. Paterson and the "sad, tragic stories" of rate-payers at two hearings held last week.

The ability to limit the increase comes largely due to updated sales and fuel forecasts, Law said, as well as from a reduction in consultant and research and development fees -- and the elimination of jobs.

Saying the recent onslaught of feedback from rate-payers has been both "terrific" and "painful," Law, referring to himself, said: "It's not fun to be hit with a two-by-four on a regular basis."

It was Wednesday night when a LIPA spokesman told Newsday that executives were "poring over" the budget and "wringing everything they can from every line in every conceivable way to mitigate" the increase.

A source close to LIPA said officials were working to cut the average monthly bill impact to under $5.

After releasing the proposed budget late last month, LIPA drew a firestorm of outrage from ratepayers at two public hearings last week, amid skepticism of an increase even as oil and gas prices plummet.

On Tuesday, Paterson said he told LIPA officials to "sharpen their pencils" to lessen the increase. Even LIPA trustees, who typically pass authority budgets with little dissent, were said to be calling for a reduction in the increase.

LIPA spokesman Ed Dumas confirmed the trustees have been "in constant dialogue with [LIPA chief Kevin Law] and would certainly like to see this mitigated."

In a statement Wednesday, Law said: "I heard the concerns from our ratepayers, our LIPA trustees and from the governor and we are working around the clock to find some relief from the proposed rate increase."

LIPA will not, however, delay a vote on the budget, as was requested by a contingent of 10 Republican assemblymen from Long Island in a letter to Law on Tuesday.

"We must have a budget in place by Jan. 1," Dumas said.

The lawmakers wanted the public comment period extended until after Jan. 1, with a vote to follow. "The board should prudently wait and evaluate the evolving energy market and other cost-saving measures as an alternative to a rate increase," the lawmakers said.

Dumas said Law sent letters to all local lawmakers on the budget and its challenges on Nov. 21.