LIPA Bill is In, Plus Some

Posted on 28 May 2009

Residents of the Town of Southampton will have to cover $11.2 million to underwrite a portion of a 9-mile underground Long Island Power Authority (LIPA) transmission line from Southampton to Bridgehampton. According to New York State Assemblyman Fred W. Thiele, Jr. $1.2 million of the monies will cover modifications to a computerized billing system that will allow the power authority to add a charge to each resident’s monthly electric bill to cover the burial of the transmission line based on the amount of energy used in the home or business. 

Last year, LIPA proposed the transmission line, stretching from Southampton Village to a Bridgehampton substation just outside of Sag Harbor Village, with 45 percent of the line planned above ground, and the remaining 55 percent underground. LIPA cited an increase in energy consumption on the East End as the impetus for extending the line.

Residents and citizen advisory groups throughout Southampton protested the concept of above ground lines, citing the importance of scenic vistas to the region’s economy and overall aesthetic, with town officials quickly joining the fight to bury the lines.

Last spring, through mediation efforts by Thiele and state senator Ken LaValle, the utility and the town reached an agreement to bury the lines, with LIPA agreeing to pay the $20 million needed to complete the project as originally planned, and LIPA customers from Southampton Village to Sagaponack – defined as a visual benefit district (VBD) – covering the additional estimated $8 million to $10 million to bury the rest of the transmission line. Despite protests by some area businesses, the utility decided to charge residents and businesses a surcharge based on the amount of energy used, rather than a flat rate.

The project was completed last summer.

In December, Thiele and LaValle asked the New York State Comptroller Thomas DiNapoli to complete an audit of LIPA that includes the Southampton to Bridgehampton Transmission Line Project after learning an additional $4 million may be needed over the original $8 million price tag to cover substantial overtime costs. The impetus for asking for the audit was to determine whether residents of the VBD should have to pay for the increase in costs.

On Tuesday, Thiele announced he was informed by LIPA that the final costs for construction, overtime and roadwork repairs would weigh in at $10 million for residents of the VBD. Additionally, an additional $1.2 million will be charged to upgrade the utility’s computerized billing system – a request made by the Town of Southampton.

According to LIPA, the modifications to the main frame billing system will allow the utility to render a separate fee on each customer’s monthly bill, enable the system to discern each customer’s monthly energy payment from their payment toward the underground transmission line project and install controls in the system to insure accuracy, auditing and reporting capabilities. According to a release issued by Thiele, it also includes separate reporting capabilities required by the town to reconcile the annual unpaid fees owed to the utility and reconcile with those who did not pay the separate fee for the project.

“While I am pleased that the construction for this project was completed within the $10 million commitment originally made to me by LIPA, the fact that the billing system is costing an additional $1.2 million is outrageous,” Thiele said on Tuesday. “LIPA blames the town. The town blames LIPA, but residents are stuck with the bill. It is incomprehensible to me that it would cost more than a million dollars just to collect this assessment. There has to be a less expensive method to collect this fee and still insure accuracy. Someone has some explaining to do.”

Calls to Southampton Town Supervisor Linda Kabot and LIPA Vice President of Communications Ed Dumas were not returned as of press time. 

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