Long Island Power Authority Unveils Time-of-Day Rate Proposal

by Paul Ciampoli
APPA News Director
January 17, 2023

The Long Island Power Authority recently announced a proposal to modernize its electric rates for residential customers in 2024 with a standard time-of-day rate and an optional super off-peak rate. Customers will still have the option to stay on a flat rate.

Customers who try the new rates will receive a 12-month “Bill Protection Guarantee,” which means they will receive a refund if they would have paid less on a flat rate. The Bill Protection Guarantee would cover a customer’s first year on the TOD rate or super off-peak rate.

If after 12 months a customer’s electric bill on the TOD rate or Super off-peak rate is higher than it would have been under the flat rate, LIPA will automatically refund the difference for the entire 12-month period.

With the new TOD rate, customers pay different rates for electricity based on when they use it. Electric rates are higher during weekdays from 3 p.m. to 7 p.m. (peak) but lower all other hours of the day and on weekends and holidays (off-peak). With the super off-peak rate, rates are further discounted in the (super off-peak) hours from 10 p.m. to 6 a.m. 

LIPA said the plan would immediately reduce rates for more than 80 percent of customers without any changes to how or when they use electricity.

Under the proposal, customers “would have the ability to save even more money and support a cleaner electric grid by making small changes in their daily routine by conducting energy-intensive activities – such as doing laundry or charging electric cars – in off-peak hours,” it said.

“Time-of-Day rates are an important rate modernization reform that will help lower customer bills and advance clean energy,” said Thomas Falcone, Chief Executive Officer of LIPA. “Once adopted, this plan will save more than 80 percent of customers money while supporting our clean energy transition by reducing carbon emissions and taking the burden off the electric grid during the highest times of demand.”

Most customers will pay the same or less under the TOD rate or super off-peak rate without changing their electricity usage or habits because most customers already conduct most activities during discounted off-peak periods, which make up 88 percent of the hours throughout the year.

The TOD proposal was developed with input from the New York Solar Energy Industries Alliance, the Department of Public Service, the New York State Energy Research and Development Authority, and consumer advocates such as the Utility Intervention Unit, and the Public Utilities Law Project.

LIPA is inviting interested stakeholders to provide input on its rate modernization proposals. There will be two public hearings on February 21, 2023, where customers can sign up to speak. LIPA will also accept written public comments until February 27, 2023.

The proposal is scheduled for consideration at the March 29, 2023 meeting of the LIPA Board of Trustees.

Should the proposal be approved by the LIPA Board at the March meeting, there will be extensive communication to all customers before they would be transitioned into any new plan, including 90, 60, and 30-day notices, which will include information about the plans and how to optimize their rates as well as the Bill Protection Guarantee.