Long Island business energy: LIPA and Zone K

Who owns the wires, and who sets the rate

The single most useful thing to know about a Long Island energy account is that the utility is a public authority, not a company with shareholders, and that it contracts out the operating work rather than doing it. LIPA's own description of its financial role states that, as owner of the electrical system on Long Island and the Rockaways, it has the ultimate authority and control over the transmission and distribution assets, and names among its responsibilities determining all rates and charges and reviewing and approving utility budgets. Its frequently-asked-questions page supplies the structure around that: LIPA is a corporate municipal agency and a political subdivision of the State of New York with essential governmental and public powers, created by the Long Island Power Authority Act of 1986 and amended through the LIPA Reform Act of 2013, governed by a nine-member Board of Trustees appointed by the State's elected officials, and serving 1.2 million customers as the third-largest public power utility in the United States. The operating work sits with PSEG Long Island, a subsidiary of Public Service Enterprise Group, which has provided management services since 2014 and handles day-to-day operation and maintenance, emergency response, customer service, billing and collection and meter reading, with LIPA providing service under the PSEG Long Island brand name. The contract in force is the reformed one, meeting eight board reform criteria agreed in June 2021 and effective 1 April 2022 after review by the State Attorney General and the Comptroller. Oversight differs from an investor-owned utility's in a way that matters to a complaint or a rate argument: a Long Island office of the Department of Public Service was created in 2012 to review and make recommendations to the LIPA Board on rates and charges, capital expenditure and emergency planning, to mediate complaints, and to run a management and operations audit every five years.

• LIPA owns the transmission and distribution system on Long Island and the Rockaways and, on its own account, determines all rates and charges.
• LIPA is a corporate municipal agency and political subdivision of New York, created by the Long Island Power Authority Act of 1986 as amended by the LIPA Reform Act of 2013.
• A nine-member Board of Trustees appointed by the State's elected officials governs it; the authority serves 1.2 million customers and describes itself as the third-largest public power utility in the United States.
• PSEG Long Island, a Public Service Enterprise Group subsidiary, has provided management services since 2014 under a contract reformed in 2021 and effective 1 April 2022, reviewed by the Attorney General and the Comptroller.
• The Department of Public Service's Long Island office, created in 2012, reviews and recommends on rates and charges to the LIPA Board, mediates complaints and audits operations every five years.

What is actually shoppable: the Long Island Choice programme

Competitive supply on Long Island is not described as retail access in the tariff; it is a named programme with its own rules. Section IX of LIPA's electric tariff is the Long Island Choice Program, and the mechanism that delivers it is Service Classification No. 14, ESCO and DRC Services. Eligibility is drawn tightly: an eligible customer must be eligible for service under Service Classification Nos. 1, 2, 2-VMRP, 2L, 2L-VMRP, 2-MRP, 5, 7, 7A or 10, must receive metered or authorised unmetered service from the Authority, and must receive all of its electric requirements from a single supplier. The tariff writes two exceptions into that last condition, and both are worth checking against a real site: output from solar or wind generating equipment that qualifies for net metering, and non-net-metered ReCharge NY customers taking Rate Code 680. Supply then arrives by one of two routes. The first is an energy service company, defined in the tariff as an entity that supplies electric generation service and procures and schedules transmission and ancillary services to deliver it to the Authority's system. The second is to become a Direct Retail Customer — an eligible customer that is a direct customer of the ISO and acts without an ESCO to contract for and supply generation solely for its own use — and the tariff states plainly that a DRC account cannot be served by an ESCO. Both are licensed by the Authority, both are subject to a licence application, suspension and revocation process, and a revoked DRC must become a bundled service customer. Enrolment also carries obligations that a smaller account never meets: the programme defines a Load Share Ratio against the participating coincident peak, and installed capacity must be maintained by load serving entities under NYISO requirements.

• Competitive supply runs through the Long Island Choice Program in Section IX of the tariff, delivered by Service Classification No. 14 for ESCO and DRC services.
• Eligibility is limited to customers eligible under Service Classification Nos. 1, 2, 2-VMRP, 2L, 2L-VMRP, 2-MRP, 5, 7, 7A and 10 that take all their requirements from a single supplier.
• The two written exceptions to the single-supplier rule are net-metered solar or wind output and non-net-metered ReCharge NY customers on Rate Code 680.
• Supply comes from a licensed energy service company, or by becoming a Direct Retail Customer that is a direct NYISO customer acting without an ESCO; a DRC account cannot also be served by an ESCO.
• The Authority licenses ESCOs and DRCs and can suspend or revoke that eligibility, and the programme assigns a Load Share Ratio and installed-capacity obligations to participating load.

Rate 280, 281 and 285: the class line a Long Island account sits on

LIPA sorts non-residential accounts by demand and usage rather than by the kind of business occupying the premises, and the thresholds decide which charges a bill can contain at all. Service Classification No. 2, General Service — Small, is Rate Code 280, for customers the Authority estimates will have demand below 7 kilowatts, and it is billed as a service charge per day plus an energy charge per kilowatt-hour with separate June-to-September and October-to-May rates and no demand charge of its own. Service Classification No. 2-L, General Service — Large, is Rate Codes 281, 283 and 291, and a customer qualifies if monthly-billed electric use reached 2,000 kilowatt-hours in each of two consecutive monthly billing periods in the last twelve months, or 4,000 kilowatt-hours across two consecutive bimonthly periods, or the Authority estimates demand at 7 kilowatts or more. Rate 2-L carries a service charge per day, a demand charge per kilowatt of demand and an energy charge per kilowatt-hour, again split across the two seasonal periods, with Rate 283 as the seasonal variant and Rate 291 written for schools; it also reaches radial primary service. Above that sits Rate 285, the large general and industrial class, whose rates the tariff states separately for secondary, primary and sub-transmission service and which pairs with Rate 284 — a Rate 285 customer has one opportunity to transfer to 284 and the mechanics run through the tariff's own transfer rules. Time-of-use variants sit alongside the standard codes: 2-VMRP is Rate 292 and 2L-VMRP is Rate 294. The one-way rules are the part a growing business should plan against: a customer that leaves Rate 292 cannot return to it for twelve months, and Rate 288 was withdrawn from new service effective 1 January 2026, with participating customers moved to 292 unless they lacked an advanced metering infrastructure meter, in which case they moved to 280.

• Rate Code 280, General Service — Small, applies where estimated demand is below 7 kilowatts: a service charge per day plus an energy charge per kilowatt-hour, in two seasonal periods, with no demand charge of its own.
• Rate Codes 281, 283 and 291 make up Service Classification No. 2-L, reached at 2,000 kilowatt-hours in each of two consecutive monthly periods, 4,000 kilowatt-hours bimonthly, or an estimated 7 kilowatts of demand.
• Rate 2-L adds a demand charge per kilowatt of demand to the energy charge, and Rate 283 is its seasonal variant while Rate 291 is written for schools.
• Rate Codes 284 and 285 are the large general and industrial class, with rates stated separately for secondary, primary and sub-transmission service and one opportunity to transfer from 285 to 284.
• A customer that leaves Rate 292 cannot return for twelve months, and Rate 288 was withdrawn effective 1 January 2026: its customers moved to 292, or to 280 without an advanced meter.

Zone K, the local supply charge, and what is landing on the system

Two tariff names carry the cost of power on a Long Island bill, and the split between them explains why a buyer here should ask about zone treatment rather than only about a supplier's margin. The Power Supply Charge is built as a Market Supply Charge, paid by bundled service customers, plus a Local Supply Charge that recovers all costs inside the Power Supply Charge that the Market Supply Charge does not, divided across energy sales and rounded to four decimal places. The Market Supply Charge covers the NYISO-administered market costs, premiums associated with the Authority's fuel hedging programme including gains and losses, and the renewable and zero-emission credit costs allocated to LIPA as a load serving entity. The reason a locality charge exists at all is the zone the tariff names: LIPA prices against the Long Island Locality, Zone K, and the tariff's own provisions reach for Zone K Day-Ahead locational marginal prices and Zone K capacity auction prices when it defines what a customer-generator is credited or charged. For a commercial buyer, that is the structural fact behind the shop — capacity in this zone clears on its own terms, and a supplier's offer is written against them. The system's supply is also being rebuilt under contract rather than by the wholesale market alone. The project record describes South Fork Wind, the first commercial-scale offshore wind farm serving New York, as twelve turbines generating 132 megawatts and enough output for 70,000 Long Island homes, and the Bureau of Ocean Energy Management approved Sunrise Wind's construction and operations plan in June 2024 for up to 84 turbines and 924 megawatts, with an onshore interconnection cable running to LIPA's Holbrook Substation. LIPA's own resource account adds the standing picture: seven major interconnection cables to regional markets, contracted generating capacity, and further offshore wind and transmission under development.

• The Power Supply Charge is built as a Market Supply Charge paid by bundled service customers, plus a Local Supply Charge that recovers every Power Supply Charge cost the Market Supply Charge does not.
• The Market Supply Charge covers NYISO-administered market costs, fuel hedging premiums including gains and losses, and renewable and zero-emission credit costs allocated to LIPA as a load serving entity.
• LIPA's tariff prices against the Long Island Locality, Zone K, referencing Zone K Day-Ahead locational prices and Zone K capacity auction prices — the capacity obligation behind supply in this zone.
• South Fork Wind: twelve turbines, 132 megawatts, and enough output for about 70,000 Long Island homes.
• Sunrise Wind: BOEM approved up to 84 turbines and 924 megawatts, with the onshore cable to LIPA's Holbrook Substation.

Gas is a different company, a different class line

Nothing about the electric arrangement carries over to gas, and the first surprise for a Long Island business moving from an upstate or city site is that the gas company is not the same legal entity it may have dealt with before. National Grid's downstate New York gas operations are filed with the Public Service Commission as two local distribution companies, and the companies' own rate-case material names them: KeySpan Gas East Corporation doing business as National Grid, commonly referred to as KEDLI, for Long Island, and The Brooklyn Union Gas Company doing business as National Grid New York, or KEDNY, for Brooklyn and Queens. Both appear as National Grid on a bill, which is why the rate code matters more than the logo. National Grid publishes a conversion table that maps the rate code printed on a bill to the service class: Rate Code 250, non-heating general, and Rate Code 170, heating space heating, both map to SC 2, Non-Residential Service, while Rate Code 260 maps to SC 15, High Load Factor Service, Rate Code 270 to SC 16, Year-Round Space Conditioning Service, and the baseload distributed-generation codes to SC 17. Transportation is a separate menu for a business that wants to buy its own supply and move it: SC 5 is Firm Transportation Service, SC 18 is Non-Firm Demand Response Service and SC 19 is Non-Firm Demand Response Transportation Service, and the company's rate-case material describes the non-firm classes as carrying tiered discounts off the corresponding firm tail-block rate. Delivery charges are published by service class on a monthly statement and move separately from the gas supply charge, and the mechanisms behind them include a revenue decoupling mechanism, lost-and-unaccounted-for targets, a gas safety and reliability surcharge and a demand capacity surcharge mechanism. A Long Island gas account therefore has a delivery question and a supply question, and the class line is the first thing to read rather than the last.

• National Grid's downstate gas business files as two local distribution companies: KeySpan Gas East Corporation (KEDLI) for Long Island and The Brooklyn Union Gas Company (KEDNY) for Brooklyn and Queens.
• The rate code printed on the bill determines the service class: 250 and 170 map to SC 2 Non-Residential Service, 260 to SC 15 High Load Factor Service, and 270 to SC 16 Year-Round Space Conditioning Service.
• Transportation options are listed separately: SC 5 Firm Transportation Service, SC 18 Non-Firm Demand Response Service and SC 19 Non-Firm Demand Response Transportation Service.
• The non-firm classes carry tiered discounts off the corresponding firm tail-block rate under the company's rate-case rate design.
• Delivery charges are published monthly by service class and move separately from gas supply, and the underlying mechanisms include revenue decoupling, lost-and-unaccounted-for targets, a gas safety and reliability surcharge and a demand capacity surcharge mechanism.

What to assemble before a Long Island energy quote

The file a quote needs here is larger than a bill, because several of the things that decide what can be shopped are properties of the account rather than of the business. Start with both bills and the rate code and service class printed on each, since the class decides which charges exist and which company's tariff applies. Confirm the delivery address sits inside LIPA's territory — the Fifth Ward of the Borough of Queens plus the cities, towns and villages of Nassau and Suffolk counties — because an address outside it is not a LIPA account. Gather twelve months of consumption by month with the maximum demand reading for each month, the account and meter numbers, and the contract end date and notice period taken from the agreement rather than from an invoice. Establish whether the account has an advanced metering infrastructure meter, since the tariff's 2026 withdrawal of Rate 288 turned on exactly that, and whether the site has on-site generation that is net metered or a ReCharge NY allocation, because either changes which load can be shopped. Then do the arithmetic before comparing anything: load factor is kilowatt-hours divided by the product of maximum demand and the hours in the period, expressed as a percentage, and it tells a business whether a class with a demand charge, like 2-L or 285, or a volumetric class like 280 is the right basis for comparison. Re-price every offer on the account's own twelve months rather than on a supplier's assumed usage. Competitive supply depends on the service address, the meter and the utility territory, and municipal utilities, cooperatives and some jurisdictions have no choice at all. HighGround works as an advisor-assisted channel rather than a rate table, sourcing electricity and natural gas supply through the Broker Online Exchange supplier network. HighGround may receive provider compensation on completed purchases, and an inquiry places no order and switches no supplier.

• Both bills with the rate code and service class printed on each, since the class decides which charges exist and which tariff applies.
• Confirmation that the delivery address is inside LIPA's territory: the Fifth Ward of the Borough of Queens and the cities, towns and villages of Nassau and Suffolk counties.
• Twelve months of consumption by month with each month's maximum demand reading.
• Account and meter numbers, plus the contract end date and notice period taken from the agreement.
• Whether the account has an advanced meter, since the withdrawal of Rate 288 turned on metering, and whether any generation is net metered or a ReCharge NY allocation.
• Load factor, computed as kilowatt-hours divided by maximum demand times hours in the period, to decide whether a demand-charge class or a volumetric class is the right comparison.
• Competitive supply depends on the service address, the meter and the utility territory; municipal utilities, cooperatives and some jurisdictions have no choice at all.
• HighGround may receive provider compensation on completed purchases, and an inquiry places no order and switches no supplier.

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