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LIPA Rates Going Up About 4 Percent, Stunning Weary Residents

NEW YORK (CBSNewYork) -- The cost of electricity is going up on Long Island.

Long Island Power Authority customers will see a roughly 4 percent increase in their bills this month after the utility increased its power supply charge, WCBS 880's Mike Xirinachs reported Tuesday.

The average rate hike will amount to about $5.71 a month, CBS 2 reported.

LIPA Rates Going Up

The increase comes a week after Gov. Andrew Cuomo signed a major LIPA reform bill focusing on competency, accountability and rate stability.

A three-year rate freeze was included in the new plan.

Some LIPA customers expressed confusion and frustration over the latest increases.

"It bothers all of us," one LIPA customer told Xirinachs. "This company is just a bad company. We'd like to see changes, but changes come so slow with these people."

Ratepayer Andrea Vecchio told CBS 2's Jennifer McLogan that she and her watchdog group, East Islip Taxpac, feel blindsided by LIPA. She  claims it mismanaged Hurricane Sandy and now dares to demand higher rates.

"It's ratepayer boondoggle, that people should really be up in arms about," Vecchio said. "Where did the money go? It went for nothing. Because we couldn't find a truck. We couldnt get LIPA on the phone. We sat here for two weeks wet and cold."

LIPA officials said the rate hike represents the power supply charge and not the delivery charge, which the utility controls. The utility added that the power supply charge, which covers the utility's costs to purchase fuel needed to operate its power plants, must be passed on to customers, Xirinachs reported.

"We buy all the power that we deliver to all our customers. And so we have to go out and estimate what the costs are. In the summer we experienced higher than expected natural gas prices, affecting the entire Northeast market," said John little, LIPA's Director of Rates and Pricing.

The utility said despite the power supply charges, residential bills had actually dropped steadily since the storm -- in some cases up to $17.

New Hyde Park senior Nan Smith said she doesn't like prices that fluctuate. She said bills were too high to begin with, calling LIPA "greedy."

"I think we should have a clean slate top to bottom," Smith told McLogan.

New Jersey's PSE&G will take over the beleaguered utility in January, but it's unclear if it will retain LIPA's new policy of billing to recoup fuel costs each month, rather than at year's end, a practice that often leads to over-collection, McLogan reported.

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