More Frequently Asked Questions

Public power utilities are not-for-profit, electric consumer-owned utilities (COUs) rather than investor owned utilities (IOUs). They can be municipally-owned or cooperatively owned and safely provide reliable, low-cost electricity. LIPA will follow a municipal model, although strictly speaking, it is not owned by any municipality. Perhaps we should call our model of LIPA “community-owned or "regionally-owned.”

Did you know there are three small municipal utilities on Long Island? Freeport, Rockville Centre, and Greenport all own and operate their electric systems. They have their own small power plants and purchase more power provided by the New York Power Authority (NYPA). This is cheap electricity that primarily comes from hydroelectric and nuclear power plants. However, this is not a viable alternative in the LIPA service area since it requires more electricity than NYPA can  supply.

“In Freeport, N.Y. ...98% of customers had power restored by 10am the morning after Isaias...” reported the Wall Street Journal on Aug 19, 2020.

Public utilities have much higher customer satisfaction ratings according to the J.D. Power Electric Utility Residential Customer Satisfaction Survey of 2019. This pie chart derived from that data is from the LIPA Phase I Options Analysis Report. 

Public power already serves close to 15% of Americans. On average, public power provides 13% cheaper rates than private utilities with 46% shorter outage times. They are also more flexible in adopting new technologies, such as the new digital infrastructure that NYPA and Chattanooga Public Works have embraced.

Across the nation, 28% of customers are served by consumer-owned utilities. These COUs serve people in 49 states and the 5 inhabited U.S. territories. Large public utilities that LIPA could learn from include Sacramento Municipal Utility District, Los Angeles Department of Water & Power, Seattle City Light, Austin Energy, and Chattanooga Public Works. Anne Le Strat and Michael Menser have written a long essay called Democratizing Public Services. It is one of the inspirations behind the Reimagine LIPA campaign and where we derive our Energy Observatory proposal from.

Instead of paying bonuses to unaccountable management and dividends to distant stockholders a restructured, fully public LIPA could use its revenue to:

• be more accountable to its ratepayers
• lower rates especially for low-income households, seniors on fixed incomes, and small businesses, while increasing affordability and equity
• reinvest revenues to enhance resilience (e.g., bury lines to reduce future outages)
• improve identification of and service to customers with special needs such as individuals requiring electricity for medical equipment (e.g., respirators, refrigerators), sewage treatment plants, and other services that would otherwise create environmental disasters.
• focus on environmental justice
• better support community solar, thermal energy networks, and more wide ranging conservation programs
• seek out public-public partnerships that improve service delivery and community resilience: e.g., assist public bus systems electrify with electric buses to reduce emissions, improve air quality and reliability, like NYPA is doing upstate and at JFK airport

There are several reasons LIPA rates are so high. LIPA inherited those high rates from LILCO, which were the highest in the US in its time. In addition, LIPA pays PSEG $80M a year to run our system. Out of this income, PSEG must pay high-priced executives, post a profit, pay taxes, and pay dividends to its stockholders.

LIPA’s debt of $7.3 billion (including $4.5 billion in Shoreham debt) is also responsible for our high rates. This is “dead weight” debt that was incurred but did not create any meaningful asset nor serve a useful purpose. Most borrowed money is used to add renewable electricity generation and improve grid infrastructure resiliency by investing in new equipment, and hardening the grid. The Shoreham debt provides no current or future benefits.

All-electric buildings, which will begin in new construction in 2026, will actually lead to lower electric rates. As LIPA explains it in its “Building Decarbonization on Long Island and the Rockaways” fact sheet: "LIPA has summer peak loads of about 5,000 megawatts (MW). As customers cool their homes with air conditioning, but primarily heat with fossil fuels, winter peak loads are less than 3,000 MW. That means LIPA could add about 2,000 MW of winter loads without significant new investment in the electrical grid. Adding this winter load allows LIPA to spread the fixed cost of maintaining the electric grid over more usage, which reduces per kilowatt-hour electric costs."

Yes. LIPA still carries enormous debt ($10 billion) as a result of buying the electric assets and debt ($7.3 billion at the time) from the former private electric utility, the Long Island Lighting Company (LILCO). The current yearly interest-only payment is $348 million and the principal continues to grow, even though it was supposed to be paid off by 2015. However, the debt-to-asset ratio has been decreasing from the original 230% and will reach an industry standard of 70% by 2030, according to Tom Falcone, Chief Executive Officer of LIPA. (Testimony of Thomas Falcone, Chief Executive Officer of the Long Island Power Authority, December 15, 2022),

 Property taxes are also high, so the property-tax equivalent, Payments in Lieu of Taxes (PILOTs) that power plant owners pay, is equally high and these are passed through on ratepayers’ utility bills. Other reasons are that most of the power plants on Long Island are old and inefficient, so they burn more fuel. As fuel costs rise, so do the costs of producing the electricity.

The current skilled workforce, both union workers from IBEW Local 1049 and the remaining ServCo staff, will continue to do the work they have been doing for years with all their benefits intact. There are several pathways to getting here that will be determined by the Union as a part of the transition.

The first hearings held in 2022 and early 2023 were live-streamed, and the videos are available on the The Future of the LIPA website. More hearings will be conducted this spring and summer on the draft public power report that is overdue. We expect the same arrangement then.