Investigation Centers on Over $230 Million in Questionable Charges and Over-Billing
Governor Andrew Cuomo has directed New York State Inspector General Ellen Biben to conduct a thorough audit of the Long Island Power Authority (LIPA). Cuomo pointed to recent concerns that LIPA may be raising rates in a manner to avoid triggering a required review by the Public Service Commission (PSC), making questionable charges and overbilling more than $230 million over the last decade.
The governor directed Biben to do a comprehensive review and also to focus its audit on LIPA's billing and delivery charge practices to ensure Long Island ratepayers are treated fairly and are not subjected to unnecessary and avoidable rate hikes.
"The Inspector General's audit of how LIPA sets its rates will make sure Long Islanders know where their money is going, especially since they pay among the highest energy rates in the nation," Governor Cuomo said.
"We must make sure that LIPA is following the letter of the law when it comes to how much it charges ratepayers."
At the governor's request, the Inspector General Biben will conduct a full audit of LIPA's delivery charges and other billing actions to ensure that its rate structure is efficient and accurate. Concerns relating to the utility that have been raised by local elected officials include the following:
A recent discovery of more than $230 million in overcollections by the utility, which coincided with its 1.9 percent delivery charge increase.
Rate increases that fall just below the level that would require a review by the PSC. Annual delivery charge increases of less than 2.5 percent are not subjected to scrutiny by the PSC and the last two increases of 2.1 percent and 1.9 percent have fallen just below that level, raising the possibility that LIPA is increasing its rates just below the threshold to avoid a PSC review.
Questionable charges, including passing on approximately $33 million in charges to ratepayers for recovery from a storm that never happened.
The American Consumer Satisfaction Index gave LIPA the lowest customer satisfaction rating among municipal-owned utilities in the nation, underscoring an overall dissatisfaction with the power utility
The governor directed Biben to do a comprehensive review and also to focus its audit on LIPA's billing and delivery charge practices to ensure Long Island ratepayers are treated fairly and are not subjected to unnecessary and avoidable rate hikes.
"The Inspector General's audit of how LIPA sets its rates will make sure Long Islanders know where their money is going, especially since they pay among the highest energy rates in the nation," Governor Cuomo said.
"We must make sure that LIPA is following the letter of the law when it comes to how much it charges ratepayers."
At the governor's request, the Inspector General Biben will conduct a full audit of LIPA's delivery charges and other billing actions to ensure that its rate structure is efficient and accurate. Concerns relating to the utility that have been raised by local elected officials include the following:
A recent discovery of more than $230 million in overcollections by the utility, which coincided with its 1.9 percent delivery charge increase.
Rate increases that fall just below the level that would require a review by the PSC. Annual delivery charge increases of less than 2.5 percent are not subjected to scrutiny by the PSC and the last two increases of 2.1 percent and 1.9 percent have fallen just below that level, raising the possibility that LIPA is increasing its rates just below the threshold to avoid a PSC review.
Questionable charges, including passing on approximately $33 million in charges to ratepayers for recovery from a storm that never happened.
The American Consumer Satisfaction Index gave LIPA the lowest customer satisfaction rating among municipal-owned utilities in the nation, underscoring an overall dissatisfaction with the power utility
"Our office has the tools and resources necessary to conduct a swift and thorough audit of the Long Island Power Authority's rate tactics, and I thank Governor Cuomo for the opportunity to verify and assess rate increases that impact Long Island ratepayers," said Biben.
Senator Charles J. Fuschillo, Jr. and Assemblyman Robert K. Sweeney have been vocal advocates on behalf of ratepayers on Long Island. Senator Fuschillo recently led a hearing on LIPA oversight and Assemblyman Sweeney has put forth legislation seeking oversight of the utility.
"I applaud Governor Cuomo for ordering a thorough audit of LIPA by the Inspector General. This is a critically important step in the right direction towards making LIPA more transparent and accountable to its 1.1 million ratepayers, who are sick and tired of paying some of the highest utility costs in the nation," stated Senator Fuschillo.
Assemblyman Sweeney said, "I am delighted that Governor Cuomo has begun the process of providing desperately needed public oversight of the Long Island Power Authority. A number of unfortunate and questionable decisions have caused the authority to lose public confidence. It is only through greater transparency and professional oversight that this trust can be restored. Long Islanders pay among the highest electric rates in the United States. They deserve no less than to receive the best possible management of their utility."
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