“It’s an uphill fight,” said State Assemblyman Fred W. Thiele, Jr. last week about the effort to make the Long Island Power Authority a fully public utility.
This, despite the Legislative Commission on the Future of the Long Island Power Authority, a bipartisan eight-member panel that Thiele co-chairs, concluding after an extensive investigation and many public hearings, that LIPA should operate the electric system on Long Island itself and not contract it out.
That’s despite the commission’s report last year that found the cutting out the current contractor, PSEG, would provide a saving of $50 million to $80 million a year “by eliminating the fee paid to PSEG.”
It’s despite “strong support in the State Assembly” for LIPA being a fully public utility and operating the grid itself, said Thiele of Sag Harbor whose Assembly district extends west through East Moriches.
Action on that “has stalled,” said Thiele, because of “the failure of any member of the State Senate” to introduce a measure needed to be the companion bill to legislation by the State Assembly to facilitate it, and because of “the silence” of New York Governor Kathy Hochul.
This stall has come amid intense lobbying of state officials by Newark, New Jersey-based PSEG to continue its contract of operating the electric grid for LIPA. “PSEG has been spending millions of dollars on lobbying,” said Thiele.
Also, a lot of “the same groups and people that supported the Shoreham nuclear plant” and the since defunct Long Island Lighting Company are collaborating with PSEG in its push to keep its LIPA contract, he said.
LIPA was created in 1986 largely to block the Shoreham plant and prevent the construction of the six to ten more nuclear power plants LILCO sought to build in Suffolk County, and to promote the utilization of green renewable energy.
Then, under a succession of governors, a “third-party contractor” model was adopted—the only one of its kind for a utility in the nation, notes Thiele.
PSEG was brought in to be LIPA’s contractor by former Governor Andrew Cuomo after Superstorm Sandy in 2012 and major failures of its then contractor, London, England-based National Grid. Most electric users on Long Island were left without electricity, some for as long as two weeks.
But the performance of PSEG has been as poor as that of National Grid.
Some examples:
A headline on the front page of Newsday last week: “PSEG’s LI Call Center ‘Horrible.’” The subhead: “Continues to miss performance targets.” An extensive article provided details.
There was the New York State Department of Public Service audit that was reported last month to have found, as Newsday put it, that PSEG “problems loomed large.”
With PSEG as the “third-party contractor,” when Hurricane Isaiah struck in 2020, more than half of Long Island’s electric users lost power, many for as long as a week, and there were huge call center problems.
Says Thiele: “This third-party arrangement has failed time and again—and will fail again and again.”
His commission determined that with LIPA operating the grid—the model for the 2,000 other public power utilities in the U.S.—there would be far more accountability for the public’s energy needs plus the significant cost-savings.
A worrisome sign of what might be ahead is the resignation announced last month of LIPA chief executive Tom Falcone. Under Falcone, a post-Isaias analysis was done by LIPA that pointed to an option of LIPA being a fully public utility.
“Our commission built off Tom Falcone’s work,” said Thiele. “Tom was honest and his honesty about public power attracted a number of enemies.” His “resignation is a loss for Long Island and brings into question the future direction of LIPA.”
Further, there have been new appointees to the LIPA board “and there is no indication from any of the new appointees that they support anything but the status quo,” noted Thiele.
Originally, beyond stopping nuclear power on Long Island and promoting green energy, LIPA board members were to be elected by Long Islanders. This kind of democratic energy process is the system at the Sacramento Municipal Utility District in California on which LIPA was based. But Governor Mario Cuomo, Andrew Cuomo’s father, put off having elections, instead directing that most appointments to the LIPA board be made by the governor and the rest by the leaders of the State Assembly and State Senate. His successor, George Pataki, made that permanent.
With the State Senate’s inaction on LIPA becoming a fully public utility, Governor Hochul can avoid taking a stand. No bill to sign would get to her desk. And, as Mark Harrington, who covers energy for Newsday, has just reported: “If the state legislative measure were to fail—as seems increasingly likely – and LIPA is not able to put the contract out to bid to find a new operator in coming weeks, it would be a victory for New Jersey-based PSEG.”