The Long Island Power Authority on Dec. 18 announced the adoption of its 2026 budget, which delivers stable electric rates, including a 3.3% decrease in the average residential customer’s electric bill.
“At a time when utility customers across the country are facing increasingly higher costs, LIPA’s adopted 2026 budget prioritizes affordability and lowers bills,” LIPA noted.
Carrie Meek Gallagher, Chief Executive Officer of LIPA, said, “The 2026 budget delivers on LIPA’s promise to provide reliable, affordable, and increasingly clean energy for Long Island. This adopted budget strengthens our foundation for the future under the new agreement with PSEG Long Island, ensuring customers benefit from both cost savings and a resilient electric grid. By maintaining fiscal discipline, we’re creating the financial flexibility needed to invest in the technologies that will power our region for decades to come.”
The adopted 2026 budget is the first developed under LIPA’s five-year contract extension with PSEG Long Island, which strengthens oversight, enhances cost controls, and delivers $17 million in management fee savings over the life of the agreement.
Under the new contract, LIPA measures utility performance against 58 performance metrics, maintaining and increasing the rigor and accountability of prior years.
Tracey Edwards, Chair of the LIPA Board of Trustees, said, “With this adopted budget, the Board has reaffirmed its commitment to affordability and reliability for every LIPA customer. Even as costs rise nationwide, LIPA is once again leading with stability and smart investment. This budget ensures that Long Islanders have a dependable grid at an affordable price.”
The adopted $4.4 billion operating and $1 billion capital plan underscores LIPA’s commitment to reliability, affordability, and increasingly clean energy, while strengthening its partnership with PSEG Long Island under the extended service agreement.
Highlights of the adopted budget include:
- Lower Customer Bills: The typical residential customer bill in 2026 will decrease by $6.53 (3.3%) as compared to 2025 bills.
- Reliability Investments: Maintains a $1 billion annual investment to strengthen and modernize the electric grid.
Advancing Clean Energy: Supports New York’s energy goals with offshore wind, battery energy storage, and transmission upgrades, delivering thousands of megawatts of carbon-free power. - Stronger Management Contract: The five-year contract extension with PSEG Long Island strengthens oversight, enhances cost controls, and delivers $17 million in management fee savings.
- Reduced Power Supply Costs: The 2026 budget includes a $219 million decrease in power supply costs for market-based energy commodities, including electricity, natural gas, and fuel oil.
The adopted budget advances the Board’s policy on fiscal sustainability, which has guided LIPA’s financial decisions since 2015, resulting in multiple ratings upgrades since 2014.
LIPA’s debt-to-asset ratio stands at 78% in 2025, with a goal of 70% by 2030.
Members of the public participated in hearings held across the service territory in November, including the Rockaways, Suffolk County, and Nassau County, where community members provided comments on the 2026 draft budget prior to its adoption.
David Lyons, Interim President and Chief Operating Officer of PSEG Long Island, said, “PSEG Long Island is committed to partnering with LIPA to provide our customers with reliable service in the most affordable way possible. PSEG Long Island is the #1 overhead electric service provider in New York State and #1 in J.D. Power Business Satisfaction for the East Large Segment in 2025.”
