NYS Legislative Commission Faces Polarized Crowd On Prospect of Shifting LIPA To Be Fully Public, and more

LIPA owns the electric system on Long Island but pays PSEG Long Island millions to run the day-to-day operations. Yesterday, a NYS legislative commission discussing the future of LIPA faced a crowd decidedly polarized on the prospect of shifting to a fully public utility, with labor leaders expressing continuing concerns about the new structure’s ability to guarantee their existing pay and benefits. Mark Harrington reports on Newsday.com that the first of four public hearings this month took place at the Suffolk Legislature in Smithtown on Tuesday, where more than 100 people gathered to express a mix of optimism and worry about the prospect of LIPA operating the grid without the helping hand of PSEG Long Island. The prospect of up to $75 million in annual savings from a more accountable public utility was countered by what some feared would be a lone LIPA where patronage, high rates and poor service would become the norm. “We don’t trust government on Long Island,” said Luis Mendez of the business group, Empowering Young Professionals. LIPA, a state authority, was originally envisioned as a fully municipal utility but has never operated as one, instead turning to a rarely used public-private model that relies on an outside corporation to manage the grid under long-term contracts. “We finally have an opportunity to go back and fix it,” former LIPA trustee Shelly Sackstein, chairman of business group Action Long Island, told legislators on the commission. “It should have been a fully municipal utility in the first place.” Most vocal among the contingent of voices in opposition to a fully public LIPA was PSEG, an entity that has the most to lose should LIPA shift models (its contract with LIPA expires at the end of 2025). The New Jersey-based company has been lobbying for more than a year to convince lawmakers to keep the system the way it is. “Our future is at risk,” said PSEG senior director/vice president Christopher Hahn, who suggested the anticipated monthly savings of $3 per customer from the shift wasn’t worth the risk. “Mismanagement by an unaccountable, patronage-fueled [fully public LIPA] bureaucracy will not meet [state climate goals] on time and will likely raise customer rates dramatically.” But two commission reports and testimony by LIPA chief executive Tom Falcone indicated a fully public utility without PSEG could be accomplished with quick and significant savings. “You could replace the 19 people PSEG provides by hiring about six,” for the new utility, and save more than $70 million a year, he said, noting those top PSEG officials cost ratepayers around $4.5 million each.One major item on the commission’s to-do list is coming up with legislation that includes the list of protections union members have been demanding since the effort began over a year ago. Assemb. Fred Thiele, (D-Sag Harbor), co-chairman of the committee, reiterated repeated assurances to labor leaders that their concerns would be addressed. “If we are not able to find a solution that protects labor this isn’t going to happen,” he said of the committee’s effort. NYS Assemb. Fred Thiele, (D-Sag Harbor), co-chairman of the committee, noted that the municipalization effort was about more than a potential $2 to $3 monthly savings for local customers. Under the new structure, he said, “The public would be more involved in their utility, and that would lead to better decisions” from a more transparent, accountable LIPA. There will be a LIPA Commission Hearing in Southampton Town Hall next Wednesday; September 20th at 11:00 AM.The commission will complete its report by the end of November, and lawmakers are expected to use it to draft enabling legislation early next year, possibly as part of the NYS budget. ***Next Monday at the Riv