LIPA Vote Means Southampton Is Closer To Cheaper Electric Rates

A Community Choice Aggregation program could result in lower electricity rates for customers.

The Long Island Power Authority last week took a step that could lead to lower electricity costs for Southampton consumers as early as next year, when it approved a rule change allowing the creation of Community Choice Aggregation, or CCA, programs on Long Island.

Not to be confused with the kind of pressure-treated lumber once commonly used in construction projects, a CCA program gives residents of a municipality the right to buy their electricity on the open market and not settle for the rate set by their utility. Typically, they are able to find both a cheaper source, and more importantly, a greener source.

“While all of Long Island benefits from the LIPA Board of Trustees’ vote, CCA is a tool essential to Southampton in order to meet its stated goal of 100-percent renewable electric energy by 2025,” said Southampton Town Councilman John Bouvier in a release

Lynn Arthur, the executive director of Peak Power Long Island, a not-for-profit company that has been pushing the town to adopt renewable power sources, said a CCA program in the town could reduce annual carbon dioxide emissions by between 175,000 and 350,000 metric tons.

If residents aren’t interested in reducing the amount of greenhouse gases the town is responsible for, they might be interested in saving some green. Ms. Arthur estimated that even if a CCA program was able to shave only a penny off the kilowatt price for electricity, customers in the town could save $7 million a year. Assuming there are 25,000 households in the town, that would work out to a $280 annual savings per customer, or a month’s electric bill, she said.

Ms. Arthur likened the process to establishing a CCA program to a baseball game that lasts nine innings. “We’re really in the first inning,” she said.

While the LIPA rule change is an important first step, the town will have to go out to bid to find a company to manage the program. That could be completed as early as the fourth quarter of this year, Ms. Arthur said. Once that step is completed, the CCA administrator will have to provide LIPA with a data protection plan, showing how it will protect customers’ personal data and then submit a plan showing how it will implement the CCA program.

Finally, the town and its CCA administrator will have to return to LIPA to request it make some changes to its Long Island Choice program, she said. That is a program that requires utilities that want to do business on Long Island to pay a surcharge for the electricity they sell. “It’s a 50-percent uplift on the cost,” she said, which, if not changed could make a CCA program financially unfeasible.

Ms. Arthur said she is confident LIPA will agree to the changes. CCA programs have now been requested by Hempstead, Brookhaven, and Southampton towns, which represent about a third of LIPA’s ratepayers, she said.

CCA programs have been allowed elsewhere in New York State since 2016. That’s because the rest of the state is served by private utility companies. LIPA is a state-created authority that is largely independent as compared to private utilities that are regulated by the Public Service Commission. LIPA was established in 1985 to take over the Long Island Lighting Company’s electric and gas infrastructure after the Shoreham nuclear power plant was abandoned. It currently contracts with PSEG Long Island to manage that power system.