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LIPA opens Long Island retail power market to competition


By the OGJ Online Staff

HOUSTON, Jan. 22, 2002 — The Long Island Power Authority, which owns the electric retail business on Long Island, NY, has opened the Long Island electric market completely to retail competition, 7 years ahead of schedule.

LIPA introduced Phase I of its LIChoice Program in April 1999. Modifications were made in the program in May 2000, when Phase II was introduced. Under LIPA’s retail competition program, three energy supply companies (ESCOs) have been certified to sell electricity to Long Island residential and commercial customers.

Presently, some 38,039 residential and commercial customers receive some 220.4 Mw of electricity from ConEd Solutions, a unit of Consolidated Edison Inc., NIMO Energy Marketing, or KeySpan Energy Solutions, a unit of KeySpan Corp. LIPA provides electric service to nearly 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens.


At the same time, LIPA increased the shopping credit to 4.5¢/kw-hr from 3.5¢/kw-hr. Increasing the credit by nearly 30% will provide ESCOs with a greater incentive to supply competitively priced electricity to consumers in LIPA’s service area. The credit is the average cost to generate the electricity supplied by LIPA to its customers.

“We’re taking these two steps to encourage more competition in the pricing of electricity on Long Island and in the Rockaway Peninsula in Queens,” said LIPA Chairman Richard M. Kessel. LIPA is keeping its pledge to open up the market well in advance of the Public Authorities Control Board 10-year deadline, and a year in advance of LIPA’s own self-imposed 2003 deadline, he said.

“We’re pleased that retail competition will be available to all of LIPA’s customers,” Kessel said. “It is our hope that the modifications we’re making in the program will draw more ESCOs into our market.”

Nationwide, 24 states are opening their markets to retail competition through some form of deregulation. LIPA is the only municipal electric entity within any of those 24 states to offer a retail competition program to its customers.

Kessel indicated LIPA has asked the Suffolk County Electrical Agency (SCEA) to participate in the program and sell as much electricity as it can obtain under its provisions as an ESCO. Kessel said Suffolk’s pending proposal would force a majority of LIPA’s customers to subsidize the small group of customers SCEA is seeking to serve.

He said these customers would be better off if the SCEA provided electricity under the existing LIPA LIChoice Program.