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LIPA Reform Would Dump PSEG-LI

Thu, 12/16/2021 - 11:43

State Assemblyman Fred W. Thiele Jr. and State Senator James Gaughran have introduced joint legislation to restructure the Long Island Power Authority as a fully public power authority, operated and managed directly by LIPA.

The legislation would create an investigative committee that would report to the Legislature on the specific actions, laws, and timeline necessary for the restructuring, which would take effect no later than Dec. 31, 2025.

In a statement issued last week, the lawmakers complained that LIPA “is the only utility in the nation that is operated and managed under a third-party management model.” Long Island’s electric grid is operated on LIPA’s behalf by PSEG Long Island.

“For more than 25 years, this model has repeatedly failed its customers,” they wrote. “There has been a lack of transparency, oversight, and accountability. That failure has been most dramatically evidenced in the unacceptable storm response by LIPA and its third-party contractors during Superstorm Sandy in 2012 and Tropical Storm Isaias in 2020.”

LIPA’s day-to-day operations were turned over to PSEG Long Island in 2013, under the LIPA Reform Act, which was intended to restructure electric utility operations, improve customer service and emergency response and preparation, and ensure safe and adequate service. But, Mr. Thiele told The Star last month, it “didn’t reform anything. It was designed to do one thing, to allow Governor Cuomo to control LIPA without ever having to take responsibility whenever anything went wrong. That may have been a great model for him, but it never worked for the people of Long Island.”

In August 2020, Tropical Storm Isaias caused PSEG Long Island’s restoration and communications system to fail, leaving more than 500,000 customers without power for up to a week and unable to notify the utility.

The State Legislature created the Long Island Power Authority in 1986. The LIPA Act was intended to replace the Long Island Lighting Company as the electric utility, close the Shoreham Nuclear Power Plant, and reduce costs for ratepayers. The Legislature’s intent, Mr. Thiele said, was “to create a true public power authority accountable to its customers. That goal was repeatedly thwarted by Albany politics and we have repeatedly suffered the consequences.” Instead, he said, transparency, accountability, and oversight remain lacking.

The investigative commission, with four members of the Senate and four from the Assembly, would also establish an advisory committee of up to 15 local stakeholders. That committee would represent business, labor, local government, and Indian nations and tribes, as well as economic development, environment, energy, social justice, consumer, civic, and school or higher education interests.

After public hearing and comment, and no later than Dec. 31, 2022, the commission would issue a draft report. No later than Feb. 1, 2023, the state comptroller would have discretion to review the report and issue any recommendations relating to public power. After further public hearing and comment, and no later than Apri1 1, 2023, the commission would send a final report to the Legislature, providing the legislation required for implementation.

“Initial investigations by LIPA after Tropical Storm Isaias in 2020-2021 show both ratepayer savings and increased management efficiencies with the public power model,” Mr. Thiele said in his statement. “After more than 25 years of unsatisfactory third-party management, now is the chance to provide LIPA’s customers with the benefits of public power.”

The legislation, he said, “will provide answers to the issues relating to public power. Further, it will provide a definite procedure and timeline for getting there. At the end, every LIPA customer will have the information they need before final action on public power.”

LIPA and the New York State Department of Public Service announced an agreement on a reformed management contract with PSEG Long Island last month. It includes reforms meant to provide greater oversight of the utility’s operations and improve its performance and accountability. The four-year contract is subject to approval by LIPA’s board of trustees, which was to have voted on it yesterday, and by the state attorney general and comptroller.

“LIPA issued its analysis of business model alternatives in April,” a LIPA spokesman said Tuesday. “We welcome review and will implement the findings of the governor, Legislature, and stakeholders on the model that will best deliver clean, reliable, and customer-first electric service to Long Island and the Rockaways. While this multi-year review process is ongoing, we have negotiated a strong four-year contract with PSEG Long Island that will improve performance, accountability, and oversight and deliver meaningful improvements to customers beginning in 2022.”


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