Rate Setting Process
The LIPA Reform Act (LRA) provides a statutory framework for Long Island Power Authority (LIPA) and its service provider’s rate-setting process and for oversight to be exercised by the Department of Public Service (Department or DPS). In accordance with the LRA, the DPS will review and make recommendations to the LIPA Board of Trustees (BOT) with respect to rates and charges to be established by LIPA. The purpose of the DPS review is to make recommendations designed to ensure that LIPA and PSEG LI provide safe and adequate electric service at the lowest rates consistent with sound fiscal operating practices.
Learn more about the rate setting process
The DPS review of the PSEG Long Island Three-Year Rate Proposal was initiated on January 30, 2015. At the conclusion of the statutory eight month process DPS made recommendations to the LIPA Board of Trustees with respect to rates and charges to be established by PSEG Long Island and become applicable on or after January 1, 2016.
- Matter Number 15-00262: Long Island Power Authority and PSEG Long Island Three-Year Rate Plan for 2016-2018
DPS will review future requests for rate increases of 2.5 percent or more. DPS-LI will also review smaller rate requests at the request of LIPA or PSEG LI.
LIPA’s Tariff and Regulatory Filings
Your Electric Bill
Understanding your bill is an important aspect of being an electric customer. PSEG Long Island follows New York State regulations that stipulate what must be on a customer’s utility bill to recover the cost of a customer’s electric service. Your bill contains details about how much electricity you’ve used and the different costs involved in providing it to you.
In general, your electric bill is comprised of two major components:
- Delivery and System Charges: Delivery and System charges comprise the cost to deliver the electricity through the utility’s distribution system to your home; to maintain the network; and for administrative services.
- Power Supply Charges: Power Supply Charges are the costs associated with the purchase of fuel that is used to produce electricity, and for the purchase of power.
PSEG LI does not make a profit on power supply charges. PSEG LI buys supply of electricity from a variety of sources, and the power supply prices are not set by the DPS, PSEG LI or LIPA. Supply prices are set by the market, and are based on supply and demand.
Information about your electric bill can also be found on the PSEG Long Island website or you may visit one of their walk-in customer centers or contact them at 800-490-0025.
Emergency Response Plan
Pursuant to the LIPA Reform Act (LRA), in accordance with Public Service Law (PSL), and New York Codes, Rules and Regulations (NYCRR) Section 16, Part 105 PSEG LI is required to prepare an annual Emergency Restoration Plan (ERP).
The ERP illustrates and outlines the activities the utility (PSEG LI) will undertake to prepare for and respond to electric emergency events that may affect customers in the Long Island Power Authority’s (LIPA) service territory on Long Island and on the Rockaway Peninsula in Queens County. PSEG LI’s ERP is filed annually by December 15th and the New York State Department of Public Service (DPS) Staff team conducts a thorough review of the ERP.
Once the review is complete recommendations by DPS are provided to the LIPA Board of Trustees (BOT) for formal adoption. Once adopted by the BOT, the ERP is made available to the public on the DPS website. The final ERP will also be posted on both the LIPA and PSEG LI websites.
In August 2014, PSEG LI implemented a new Outage Management System (OMS). The OMS is intended to improve PSEG LI’s ability to identify and manage outage conditions. This system improves the outage and restoration information available to Customer Service Representatives (CSRs), system operators, customers, municipal and elected officials, and other key stakeholders. In addition, the system provides for more accurate Estimated Time of Restoration (ETR), improved efficiency and expediency when deploying utility crews and resources, increased awareness and timely status updates and improved accuracy in the identification of outage locations.
PSEG Long Island Outage Map
Under the LRA, the DPS Long Island Office (DPS LI) is responsible for monitoring PSEG LI’s storm or heat event preparation and response before and during storm events. DPS LI performs continuous review of the company’s storm preparation and response, including assessment of the reasonableness of storm restoration costs, and that appropriate responses were taken.
If you see a downed power line, please stay as far away from it as possible and contact PSEG LI (1-800-490-0075) to report the downed wire immediately. Learn more about preparing for a storm by visiting the PSEG LI website.
Pursuant to the Public Authorities Law, PSEG LI, Service Provider for the Long Island Power Authority (LIPA), submits for review to the Department of Public Service (Department or DPS), proposed plans related to implementation of energy efficiency measures, distributed generation and/or advanced grid technology programs, having the purpose of providing customers with tools to more effectively manage their energy usage and utility bills and improving system reliability and power quality. PSEG LI submitted its proposed 2023 Utility 2.0 Plan update to DPS on June 30, 2023. PSEG LI’s annual Energy Efficiency Plan is included as an appendix with the filing.
Visit the PSEG LI's Utility 2.0 Plan Update & Energy Efficiency (EE) Plan page for more information.
Other Review Areas
Capital Expenditure Plans
DPS LI will review proposed plans to make electricity infrastructure improvements that may be necessary to ensure reliability or meet new demand. DPS LI will review proposed capital expenditure plans.
Incentive Based Performance Metrics
The Operations Service Agreement (“OSA”) between the Long Island Lighting Company d/b/a LIPA, a wholly owned subsidiary of the Long Island Power Authority, and PSEG Long Island (“PSEG LI”) established performance metrics to measure PSEG LI’s performance against operational and customer satisfaction goals. Pursuant to the LRA, the Department reviews PSEG LI’s report of its performance against the metrics in the OSA, relevant supporting data and information, and LIPA’s evaluation of the data, information and reports. This review will help identify whether PSEG LI’s performance entitles it to incentives and whether improvements need to be made. Staged Updates and Utility Debt Securitization.
Authority (UDSA) Reconciliations
DPS LI will provide on-going monitoring oversight of the Company's actual costs in relation to forecasts through updated filings in accordance with the direction provided in the recently concluded three-year rate proceeding. The filings will capture known changes such as: 1) savings resulting from the UDSA bonds, 2) costs of debt and current interest rates, 3) PSEG LI labor costs resulting from a new union collective bargaining agreement (CBA), 4) actual payments-in-lieu-of-taxes (PILOTs) on transmission and distribution property, and 5) unanticipated costs associated with changes in federal, state or local laws, or rules, regulations and orders.
On February 1, 2012, the Long Island Power Authority Oversight and Accountability Act (the Act) signed into law. The Act requires a review and evaluation of the Authority’s overall operations and management practices that includes, among other things, an examination of overall efficiency, construction and capital program planning, the Fuel and Purchased Power Cost Adjustment, the annual budgeting process, debt service obligations and the Authority’s compliance with its debt covenants. Additional comprehensive Management and Operations audits shall be initiated at least once every five years.
The first DPS comprehensive management and operations audit of LIPA was issued in September 2013, and contained 83 recommendations. These recommendations are to be used by LIPA and PSEG LI to ensure an improved level of service to electric customers on Long Island.
The next DPS-LI management and operational audit of LIPA and its Service Provider is currently ongoing and will be completed by NorthStar Consulting Group Inc. To learn more, visit the Comprehensive Management & Operations Audit of LIPA and PSEG Long Island webpage.
As Needed External Audits
The LIPA Reform Act authorizes the DPS to review all books and records of the Authority and the Service Provider, interview all appropriate personnel to perform financial audits and examinations relative to utility rate changes, fuel clause operations, prudence reviews and state and federal tax changes.