When Wainscott resident Frank Dalene opened his PSEG Long Island bill in January, he said his blood pressure “shot through the roof.”
His energy use statement had increased from $17 to $83 — a 388 percent jump — in one month. As a solar panel user, he said he produced 18,000 kilowatt-hours of energy to feed into the grid, but he still owed more than he had paid in any month during the last six years on solar.
Dalene, who is president of Hamptons Green Alliance, has led numerous initiatives to make the Hamptons more energy efficient. So, when he saw the spike, he said it felt like a slap in the face.
“When I opened the bill, I literally hit the ceiling — and my ceilings are 22 feet high,” he recalled. “After everything I have done? Why aren’t they using my kilowatt-hours? And that was the question I had for everybody. How can you do this? It rises to the level of fraud, in my opinion.”
Dalene wasn’t the only one who noticed an abrupt PSEG bill increase in January. Water Mill resident and solar panel user Steve Abramson said he also received an $88 bill from PSEG Long Island, up from his usual $18. He, too, said he was charged despite producing more power than his household uses every year.
PSEG didn’t apply any of his household’s energy credits toward its peak usage, he said. In a previous bill, PSEG recorded that the household had 2,280 kWh in its net advantage, he added.
“Our off-peak costs were billed as $0, as they were offset by our solar energy production credits, but not our peak period use,” he said.
That’s what Dalene said happened in January, too.
“They reclassified the 18,000 kWh to off peak and then charged me for peak electricity,” he said. “A kWh is a kWh, regardless of the time of day. Scientifically, it cannot change. There is absolutely no rational or logical way to justify this bait-and-switch con job. I have 18,000 kWh available to them they didn’t take.”
It wasn’t until both men called the company to dispute their bills that they found out that they’d automatically been put on the time-of-day rate with every other PSEG Long Island user — a plan that had been in motion since 2021.
The “time-of-day” rate incentivizes reducing electricity use during the hours when demand across the grid is highest, between 3 and 7 p.m. on weekdays. Energy used during this time is charged as “on peak.” Energy used off peak is less expensive.
Since demand is much higher in the summer, PSEG also increases rates between June and September, when it often has to bring supplemental “peaker” plants online to meet spikes in use. If these peaks are reduced, the costs of delivering electricity across the island will be, too, the agency has said.
When solar panel net meter users are billed on a time-of-day rate, energy credits are supposed to accumulate in separate banks for each time period. If you produce excess power during a peak period, the credits appear in the peak-period bank. Customers can transfer credits between energy banks through their online account, according to PSEG.
Both Dalene and Abramson, who said they are in favor of such energy-efficient initiatives, are frustrated with how the switchover has been handled — specifically, the automatic enrollment in the new rate, even for solar panel users, with no notifications about how the change would affect their bills.
“I did an initial look-through on their website and I didn’t see anything about how it would impact solar panel users, and I keep hearing from people that there was no notification,” Dalene said. “The whole message was that it was going to save the ratepayer money, but they never explained.
“The representative from LIPA said they sent out all kinds of educational stuff,” he continued. “I said, ‘I’m sorry. They did not tell us customers with solar panels how that was going to impact us.’ There’s an agreement that’s already in place. It’s a net metering agreement.”
PSEG Long Island Director of Energy Efficiency and Renewables Mike Voltz said the company first proposed the change back in December 2021 and has sent notifications to newspapers since then. LIPA and PSEG also held numerous meetings with stakeholders, including the Long Island Solar & Storage Alliance, which supported the new rate.
The LIPA Board of Trustees ultimately voted to approve the new rate design in March 2023, Voltz said. Until the end of 2025, the time-of-day rate had been optional. In the lead-up to the switchover, the agencies held an in-person meeting last June in Southampton specifically for civic organizations, and sent letters and/or emails to customers 90 days, 60 days, and 30 days before the rollout to alert all customers, he said. Then, each customer was sent a welcome packet once they were placed on the time-of-day rate, he said.
Elizabeth Flagler, the head of internal and external communications at PSEG Long Island, pointed to a consumer engagement award the company won for “successfully transitioning nearly a million residential customers to the time-of-day rate,” given by Smart Energy Consumer Collaborative this year.
Voltz also noted that PSEG’s website has had a rate comparison tool that analyzes customers’ actual usage over the past 365 days and compares it with what they would pay under the time-of-day rate. “And then customers can make their own choice,” he said. “So it’s really a critical decision. Some solar customers are better off with time-of-day, and some are better off on a flat rate.”
But making the new rate the default for everyone, even solar panel users who generate energy, feels like a money grab, Dalene and Abramson said.
Dalene said a PSEG rep told him on the phone that the time-of-day rate doesn’t work for solar panel users, leaving him wondering why he would be included.
Dalene also took issue with including Hamptons residents in the time-of-day rate at all, given its peak period — mainly the summertime — is different than elsewhere on the island, he said.
Voltz said that making it the default has benefited the energy system.
“Ninety-six percent of all our residential customers are on the time-of-day rate, and because of the benefits that accrue to everyone and because of bill protection, customers have the ability to change some of their behaviors,” he said. “The belief was that it’s good for the system. It’s good for all of our customers.”
Those who wish to opt out of the time-of-day rate because it doesn’t work for them financially can do so by calling PSEG. The company is offering a 12-month bill protection to customers, which means you have 12 months from the time you are switched onto the time-of-day rate to be protected against any change in cost. PSEG is crediting users for the unwanted charges.
“So if your cost would have been more on the time-of-day rate than it would have been on the flat rate, you get a credit on your bill,” Voltz explained. “It’s a standard rate, but it’s not mandatory. You can opt out at any time and you’ll be taxed for any cost if it’s over 12 months.”
The company credited both Dalene and Abramson, and put them back on flat-rate billing because, according to PSEG, the time-of-day rate didn’t make sense for their respective solar energy outputs and setups.
But Voltz encourages other folks to try it for the year, because their bills will be different between January and July, for instance, and it could actually benefit the user, he said.
“So rather than take a knee-jerk reaction, why not use the rate comparison tool and then make an informed decision instead of immediately getting off the rating?” he posed.
Voltz said that while the LIPA Board of Trustees has ultimate authority, there’s no plan to move away from the time-of-day rate as the default. Dalene said he hopes there will be more scrutiny of the power company moving forward, like he said there was when Fred W. Thiele Jr. served as a New York State assemblyman.
“Who is looking out for ratepayers?” Dalene asked. “Nobody is paying attention. Everybody is asleep at the wheel. There is no watchdog at PSEG.”
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