On Making LIPA A True Public Utility
Editor’s Note: As of Wednesday, April 19 he public hearing currentlyscheduled for this Friday, April 21, at the Nassau County Legislature, is adjourned until further notice. The Commission will not be rescheduling public hearings until the state budget has been agreed upon.
Original Story Follows:
The New York State Legislative Commission on the Future of the Long Island Power Authority has laid out a plan to transition Long Island’s electric company to a true public power provider that both owns and operates the electric grid on Long Island and in the Rockaways after its contract with PSEG-Long Island expires at the end of 2025.
The Commission released a draft of its report on the transition on April 11, and is planning hearings on the report in the upcoming weeks, though two hearings planned for mid-April in Suffolk County and the Rockaways were postponed due to the ongoing state budget negotiations, which required members of the commission to be in Albany.
“With today’s issuance of the draft report by the Commission, LIPA ratepayers are one step closer to a more transparent and accountable public utility,” said New York State Assemblyman Fred Thiele in a statement accompanying the release of the report. “The draft report surveys all of the major issues associated with the conversion of LIPA to a true public power model, including cost savings, accountable governance, workforce protections, and public oversight. The report also provides realistic alternatives for implementation. Now, the public will get the chance to be heard one more time before the Commission makes its final recommendations to the State Legislature.”
The Commission, which analyzed thousands of pages of financial and operational data for the utility, estimated that making the electric company a public entity, and doing away with its third-party operator structure farming out the operation of the grid to PSEG-Long Island, would ultimately save ratepayers between $50 million and $80 million annually, though the initial transition could cost between $16 million and $59 million.
The Commission found the utility can use the savings to “mitigate future rate increases, upgrade infrastructure, invest in climate-friendly green initiatives or support struggling residents and businesses. The report also details options for keeping the workforce employed as private sector union employees and changing its management structure to an appointed or elected board.”
The grid is currently managed by members of the International Brotherhood of Electrical Workers Local 1049, which has approximately 1,500 members, working for a subsidiary of PSEG-Long Island.
The report comes on the heels of LIPA’s announcement in late March that it will be transitioning its customers to a time-of-use rate plan beginning in 2024 to encourage customers to use electricity at times of low demand.
The 15-member Commission convened by the New York State Legislature originally conduced five public hearings before drafting its report, and is expected to hold another round of hearings before delivering the full report to the state legislature “to be acted on this legislative session.”
The Commission expects the question of the utility’s governance structure to be a focus of its upcoming hearings.
“These next steps bring us closer to more efficient utility services with a higher level of accountability for Long Island ratepayers, and I look forward to sharing final recommendations with the Legislature in the near future,” said State Senator Kevin Thomas, who co-chairs the Commission with Mr. Thiele. “I am confident that the Commission’s dedication to an expeditious and transparent process, including through direct participation during our public hearings, will produce a final report reflective of stakeholder concerns and suggestions while putting consumers first.”
The Draft Report is available online here. It “lays out the operational, legal, and legislative steps necessary to achieve public power at the expiration of PSEGLI’s contract on December 31, 2025, and, as mandated by law, gave consideration to methods of governance; improved transparency, accountability, and public involvement; improved reliability; the impact on electric rates; improved storm response; the impact on existing bonded indebtedness; improved long term energy planning; compliance with the goals of the New York state climate leadership and community protection act; increased reliance on renewable energy sources to produce electricity; taxation and payments in lieu of taxes; and the special needs of communities that are or have been impacted by the siting of power generating facilities,” according to the commission.
Two hearings originally scheduled in Suffolk County and the Rockaways on April 19 and 20 have been adjourned to a later date due to lawmakers’ return to Albany to deal with the budget.
A public hearing slated for 11 a.m. Friday, April 21 at the Nassau County Legislature office, 1550 Franklin Avenue in Mineola, will continue as scheduled. We will update this post with more information on the rescheduled hearings as it becomes available, or you can check back on the Commission’s website
All meetings and hearings are open to the public to observe, and the public is invited to testify at the public hearings. If you need translation services, contact the Commission at info@nylipa.gov. The Commission also welcomes comments and written submissions through its website, nylipa.gov/public-input. The public hearings will be livestreamed at https://totalwebcasting.com/live/nylipa.
