LIPA Announces 'Power Supply Charge' For Utility Customers

MASSAPEQUA, N.Y. (CBSNewYork) -- It's a financial insult on top of storm injury.

A month after tropical storm damage, the Long Island Power Authority is hitting customers with higher bills. While it won't break the bank, customers can expect to pay an average of $3.07 more per month, according to LIPA chief Michael Hervey.

"It's a relatively small adjustment. You know, obviously, less than a gallon of gasoline in cost, but it's better to make the small adjustment now rather than wait and have it accumulate and make a larger adjustment later," Hervey told 1010 WINS' Mona Rivera.

Hervey said the utility needs the money to recoup a projected budget gap in its fuel bill before the end of the year. He added that the bill increase -- which amounts to 2 percent -- is unrelated to the $176 million cost to pay for restoration after Tropical Storm Irene.

"We're about $18 million under-collected for the year because of higher fuel cost during the summer that we didn't have budgeted. So, we're increasing the rates slightly," Hervey said.

Despite the fact that LIPA is calling it a "small adjustment," Tom Ward told CBS 2's Tony Aiello it is still bad news.

"I think it's ridiculous, I do. We pay an awful lot for electricity out here, as you well know, and I cannot imagine many people are gonna receive this well," he said.

The so-called "power supply charge" and the thought of sending LIPA more money is galling, particularly for some customers in Massapequa. They were among the very last LIPA customers to have their power restored in the wake of Irene.

"It's shocking really because I believe that we pay some of the highest rates in the nation," Cathy Gramegna said. "It's a surprise that they would actually do that to people."

The timing is awful and just a few days ago -- LIPA was hammered at a legislative hearing over its storm response. Still to come is another rate increase to raise $44 million to cover LIPA's part of the tab for the storm cleanup.

The "power supply charge" announced Tuesday will go into effect on Oct. 1.

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