LIPA Proposes Renewed Contract With PSEG-LI

The Long Island Power Authority will continue working with PSEG-Long Island, despite LIPA’s recent report that outlines PSEG-LI’s failures to prepare for, and adequately respond to last years Tropical Storm Isaias. EXPRESS FILE

On Wednesday, June 23, the Long Island Power Authority (LIPA) announced that it plans to continue working with service provider PSEG-Long Island, despite LIPA’s recent report that outlines PSEG-LI’s failures to prepare for, and adequately respond to last year’s Tropical Storm Isaias.

For months, Long Island legislators and clean energy activists have held out hope that LIPA would terminate its contract with PSEG-LI, and make the transition to a public power company, like those that exist in many cities throughout the United States. Though LIPA had announced that it was exploring the possibility of a public system, or contracting with a new service provider, officials ultimately decided to renew the contract with PSEG-LI, angering many Long Island legislators and residents who blame PSEG-LI for the catastrophic storm response during Tropical Storm Isaias.

State Assemblyman Fred W. Thiele Jr., who just last month passed a package of bills to increase transparency and accountability of LIPA, has been a longtime critic of PSEG-LI and an advocate for a public power system.

“For years, LIPA has owned the electric system in Long Island, but they’ve always contracted with a third-party private service provider,” he said. “This third-party provider system that we have is the only one of its kind in the nation, and there’s a reason for that — because it doesn’t work.”

The contract settlement keeps PSEG-LI in place as LIPA’s service provider until at least 2025, which comes as a disappointment to state legislators who were told LIPA was considering other alternatives.

“LIPA had just last month issued a request for information from other potential providers of electricity on Long Island,” Suffolk County Legislator Bridget Fleming said. “That process was underway, and for some reason midstream they halted that process, stopped looking for an alternative, and despite the fact that PSEG had gotten a horrible report card, and had failed to take the steps that LIPA was requiring it to take, decided to renew the contract.”

Mr. Thiele said the decision came as a shock, especially since LIPA has been vocal about PSEG-LI’s failures during Tropical Storm Isaias.

“After Isaias, LIPA told us how awful PSEG was, how they had misled LIPA, how unprepared they were for the storm, how they failed to conduct a stress test of their system, and that to this day they still haven’t fixed the problems in their storm response system,” he said. “Of all the options LIPA was considering, sticking with PSEG is the worst possible one.”

The LIPA report, which was unveiled several weeks ago, cited PSEG’s outdated management software, “weak project management and oversight,” and “inadequate in-house technical expertise.” Ms. Fleming said that it is particularly troubling that PSEG had “tested its software off-hours in an attempt to manipulate data.”

“PSEG failed in that their recent report was very damaging in terms of not only their inability to make those changes and give assurance to the public, but also that they operated in bad faith; some of their data gathering was done in a way that didn’t really reflect reality,” Ms. Fleming said.

Though the decision was made last week, Mr. Thiele said LIPA has provided no explanation as to why it decided to renew the contract with PSEG-LI despite the troublesome report of the service provider.

“I think LIPA has to explain to the public what changed,” Mr. Thiele said. “For months, they were unhappy with PSEG and were pursuing other alternatives, so why did they suddenly change their mind, without any warning, and without any explanation?”

Though LIPA officials declined to comment on the matter, Chief Executive Officer Tom Falcone said in a press release that “the work of the LIPA Board and staff over the past 10 months, through their comprehensive investigation and diligence, led to PSEG Long Island being held accountable for their management failures and response to Isaias.”

In LIPA’s effort to hold PSEG-LI accountable, PSEG-LI will be forced to forfeit $30 million for its failed performance during Tropical Storm Isaias. When asked if the relationship between LIPA and PSEG can be salvaged, and reformed to work in an efficient way, Mr. Thiele was not hopeful, and cited “irreconcilable differences,” and a “trust factor that has been broken that cannot be fixed.”

Perhaps the most disappointing factor for state legislators is that there had been hope that LIPA would finally transition to a public power company — one that Mr. Thiele believes will be more transparent, effective, and accountable to its customers.

“There’s been broad-based support among elected officials and broad-based support from the public for a public power company,” Mr. Thiele said. “It all appeared to be heading in that direction of LIPA finally meeting its original vision of becoming a public power company, and then at the last minute, behind closed doors, they decided to renew their contract with PSEG.”

A public power company would benefit customers because there would be increased accountability, transparency, and oversight, Mr. Thiele said.

“There’s no profit motive for a public company,” he said. “The thing that has been missing is accountability; PSEG is accountable to nobody, they don’t have to report to the Public Service Commission, and they have had very little oversight. With a public power company, we will have accountability through an elected board.”

A public system also offers new opportunities for cheaper and greener energy, Ms. Fleming said.

“We are a coastal community, particularly vulnerable to the increasingly harsh impacts of climate change,” Ms. Fleming said. “We should be moving forward with modern, innovative, and cost-effective ways to produce electricity, not moving backward with a partner that left Long Islanders in the dark.”

Along with the proposed renewed contract, LIPA announced the start of the 2022 Integrated Resource Planning (IRP) study developed by PSEG-LI, which aims to identify the actions needed to continue on the path toward meeting New York State’s nation-leading clean energy goals set forth by the Climate Leadership and Community Protection Act (CLCPA).

Paul Napoli, vice president of power markets for PSEG-LI, said the new IRP study will identify necessary changes to the transmission grid on Long Island, and will set clear goals for clean energy usage.

“We have very distinct directions—to accomplish 100 percent zero carbon emissions by 2050, and to have 70 percent of all electricity be renewable energy,” he said. “The last IRP study didn’t have a definite target in terms of energy usage for the state, but now the state has adopted a very specific goal that can be used to create a master plan for the electric grid.”

In addition, the IRP will work to eliminate Long Island’s dependence on fossil fuels, integrate substantial amounts of renewable and clean energy resources, and identify the impacts of beneficial electrification in order to achieve environmental justice.

The contract has not been signed yet, but is rather a proposal that has been accepted by both sides and would have to be approved by the LIPA Board of Trustees.

“From my perspective, there’s a proposal out there that both of them want to accept,” Mr. Thiele said. “But I’m certainly going to use all my efforts to thwart this new contract, in favor of continuing to analyze other options such as public power.”