LIPA board approves time-of-use rate proposal

by Paul Ciampoli
APPA News Director
December 22, 2020

The Long Island Power Authority’s Board of Trustees on Dec. 16 unanimously approved a time-of-use (TOU) rate proposal.

LIPA files a Utility 2.0 and energy efficiency plan each year for consideration by the LIPA Board. The annual plan proposes and requests funding for new initiatives related to modernizing the customer experience, distributed energy resources integration, grid modernization, beneficial electrification, and energy efficiency. 

In the 2018 Utility 2.0 plan, LIPA approved a rate modernization initiative, which included funding for an “add-on” to the existing billing system to provide the capability to program and bill advanced metering infrastructure (AMI) enabled rate designs, which serves as the foundation for a phased rate modernization roadmap.

LIPA began work on developing the new TOU rate designs, which include four new residential TOU rates (including one targeted at electric vehicle owners) and one new small commercial TOU rate. 

The TOU rates use industry best practices in rate design and customer engagement strategies, fine-tuned through significant upfront research, including visiting and learning from other utilities experienced in AMI-enabled rates and billing.

The new TOU rate designs contain elements intended to improve customer take-up and response, as compared to LIPA’s existing time-of-use rates, Justin Bell, LIPA’s Vice President of Public Policy and Regulatory Affairs said.

The new elements include shorter – three or four hour — peak periods, the ability for a customer to select a peak period suitable for its household from among several options, and super-off-peak nighttime rates. 

They will be combined with new tools that enable customers to estimate their potential savings from the new rates and learn how much savings is possible based on their own household’s energy profile, frequently used appliances, and ability to shift usage, Bell said.

The tariffs containing the new TOU rate designs were issued for public notice and comment in September 2020, providing over two months for stakeholders to review and comment on the proposed rates.  Public hearings were held in November 2020.

The final TOU rate proposal incorporates feedback received from stakeholders. The tariffs will become effective on Feb. 1, 2021.