By an 8-to-1 vote on Dec. 15, the Long Island Power Authority’s board of trustees approved a new contract with PSEG Long Island, which operates and maintains the electrical grid on its behalf.
Supporters and critics alike called the new Operation Service Agreement an improvement over the previous contract, though the critics say it falls short, particularly in setting the utility on a path to becoming a fully public power authority operated and managed directly by LIPA.
PSEG Long Island has been under fire for its handling of the aftermath of Tropical Storm Isaias in August 2020, during which its restoration and communications system failed, leaving more than 500,000 customers without power for up to a week and unable to let the utility know. Along with its third-party contractors, LIPA, too, has been criticized for “a lack of transparency, oversight, and accountability,” as Assemblyman Fred W. Thiele Jr. and State Senator James Gaughran said in introducing legislation earlier this month that would see LIPA restructured as a fully public power authority operated and managed directly by the utility by the end of 2025.
The re-formed Operation Service Agreement, said Carrie Gallagher, director of the State Department of Public Service’s Long Island office, “delivers on stricter controls, stronger metrics, stricter reporting, and dynamic compensation mechanisms to compel improved performance and protect ratepayers.” The contract “represents a quantum surge in oversight” by the P.S.C., she said.
Under the new contract, PSEG Long Island will pay $30 million for ratepayer benefits to offset harm caused by failures during Isaias, Ms. Gallagher said, and the “new contract terms are really transformative improvements that will significantly decrease the likelihood of those type of failures in future.” The contract also puts half of PSEG Long Island’s $80 million annual compensation at risk, including automatic reductions for failures to meet minimum emergency response, customer satisfaction, reliability standards. It also sets up a state investigative process to reduce compensation for failure to provide safe, adequate, and reliable service to customers, she said.
The contract also allows for imposition of 110 new metrics across five scope areas, which Ms. Gallagher said “will ensure that numerous aspects of PSEG Long Island’s operation services are scrutinized,” and performance in all scopes improved or maintained appropriately. In addition, it stipulates that PSEG Long Island, a subsidiary of Newark-based Public Service Enterprise Group, will maintain “a truly Long Island-based management team,” which will focus on local operations […]
