SUFFOLK CLOSEUP: March Is Decision Time For LIPA

SUFFOLK CLOSEUP

By Karl Grossman

“The model for contracting out LIPA’s responsibilities to a private company is a two-time loser,” says Fred W. Thiele, Jr., a leader in calling for true reform of the Long Island Power Authority. LIPA, says Assemblyman Thiele, needs to return to “the vision of its sponsors” and be a “public utility accountable directly to Long Islanders.”

LIPA is to make a decision later this month on going back to that vision—to be a true public power utility operating Long Island’s electric grid itself, not contracting that out to a private company.

London, England-based National Grid which earlier operated the grid for LIPA was fired after its massive failures in Superstorm Sandy in 2012. Governor Andrew Cuomo intervened and pushed for National Grid to be replaced by Newark, New Jersey-based PSEG. In last year’s Tropical Storm Isaias, PSEG repeated National Grid’s storm failure with about half of LIPA customers left in the dark without electricity.

After these two big utility strikes, “There is no reason to think it would be any different a third time,” says Mr. Thiele of Sag Harbor.

LIPA, beyond suing PSEG for $70 million and charging “corporate mismanagement, misfeasance, incompetence and indifference, rising well beyond the level of simple negligence” for PSEG’s terrible Isaias performance, is now considering a return to the original vision of it being a full public utility.

LIPA describes that, in a report issued in December, as the “Municipal Management Model.” This, says the report, “is an alternative to LIPA’s present arrangement with PSEG Long Island.” LIPA lists economic advantages. “Rather than paying PSEG Long Island $77 million in management fees and $20 million in affiliate service charges annually, the LIPA management team would design, integrate, and bear the costs of the entire delivery chain.” It notes the “municipal management model” has “been successfully executed by numerous public power and cooperative utilities, many of whom are ranked among the best utilities in the country for customer satisfaction and reliability.”

Indeed, a good chunk of electric utilities in the United States are public power utilities, not private utilities with profit central often at the cost of public service. Public power utilities are in a better position to underground electric lines, a key to enhancing the reliability of electricity on often storm-battered Long Island.

The original model for LIPA was the Sacramento Municipal Utility District providing electric service to an area California with a comparable number of ratepayers as in LIPA’s territory. SMUD has an elected board of seven trustees, and LIPA was to have elected trustees, too. But Andrew Cuomo’s father, then Governor Mario Cuomo, undid that provision after LIPA’s formation in 1986 and replaced it with having LIPA’s nine trustees appointed, five by the governor and two each by the State Assembly speaker and State Senate president. Year after year, Mr. Thiele has introduced legislation restoring having LIPA trustees elected by Long Islanders.

The December LIPA report says under the “Municipal Management Model” and “given its direct accountability for operations, LIPA would be equipped to be far more transparent and responsive.” Important for this to be a reality would be having trustees of a strengthened LIPA elected. They would have to run for office, as do those at SMUD. And this way, electric service would be under the control of the people of Long Island. 

An outrageous example of the kind of utility governance that should never be is an entity called the Electric Reliability Council of Texas. It operates 90 percent of the electric grid in Texas.  How are the 15 members of the ERCOT board chosen? “Board members are appointed by a nominating committee made up of current members,” noted the Austin American-Statesman last month. An investigation by the Texas state capitol’s newspaper also found “one-third of its board lives out of state.” 

With frigid weather hitting Texas and freezing the blades of wind turbines, the anti-environmental governor of Texas blamed green energy for the weeks for electric outage that impacted 4.5 million ERCOT customers. But, as Forbes magazine (not known exactly for a green commitment) reported, for dealing with cold weather, wind turbines “are typically equipped with de-icing and other tools.” That simple fix was beyond the insider-board of ERCOT. Ah, anti-freeze!

Ah democracy! LIPA should decide to operate the Long Island electric grid itself—with the people of Long Island overseeing LIPA by electing the members of its board. 

Karl Grossman is a veteran investigative reporter and columnist, the winner of numerous awards for his work and a member of the L.I. Journalism Hall of Fame. He is a professor of journalism at SUNY/College at Old Westbury and the author of six books.