Suffolk Closeup: Commission Declares LIPA Should Be Public Will Lobbyists Get In The Way

SUFFOLK CLOSEUP

By Karl Grossman

The Legislative Commission on the Future of the Long Island Power Authority, a bipartisan eight-member panel, has concluded that LIPA should be a full public utility and operate the electric system on Long Island itself, not contract out the work.

This comes as PSEG, the Newark, New Jersey-based utility which former Governor Andrew Cuomo in 2011 arranged to get a contract to run the Long Island grid, has been involved in intense lobbying of state officials to keep doing it. 

The commission’s just-out report said cutting out PSEG would provide a saving of $50 million to $80 million a year “by eliminating the fee paid to PSEG” and “allow LIPA’s board of trustees to lower rates or mitigate future rate increases, upgrade grid structure, invest in climate-friendly green initiatives” and “support struggling residents and businesses.”

State Assemblyman Fred W. Thiele, Jr., the commission’s co-chair, said of PSEG’s lobbying: “If PSEG had actually been doing its job through the years, it would not need to spend millions of dollars on lobbying efforts to keep its contact.” 

“The fact is that PSEG’s operation on Long Island received the lowest rating for customer satisfaction last year in a J.D. Power survey,” said Thiele, a Sag Harbor Democrat. 

He called the PSEG lobbying a “last ditch” move.

The commission’s decision to have LIPA run the grid itself—the original vision when LIPA was established in 1986—“will save the ratepayers money,” said Thiele, and enable “more transparency, more accountability” than continuing to have a “third-party” structure, “the only one in the country” for a utility.

Also, the report calls for a “reforming of the LIPA board,” he noted, with the addition of “five members by local governments and the creation of a Community Stakeholder Board.”

Newsday on October 31 published an expose on what the headline of the two-page spread described as PSEG’s “Lobbying Blitz.” The piece, by Mark Harrington, who covers energy for the newspaper, began: “A PSEG Long Island executive and vocal critic of a state legislative plan to convert LIPA to a fully public utility had private meetings to lobby Gov. Kathy Hochul and other top state officials this summer, recently filed state records show.” 

“In addition” to this lobbying by Christopher Hahn, senior director and vice president of governmental affairs for PSEG on Long Island, the piece said records “show the company used Tonio Burgos & Associates and Mercury Public Affairs to lobby state agencies and officials.”

Senator Anthony Palumbo, a commission member and a Republican from New Suffolk, said of the commission’s report: “Long Islanders pay some of the highest electric rates in the country. We as elected officials must do all we can to protect ratepayers while at the same time ensuring that our system is storm hardened and help is accessible to customers. This investigative process has allowed us to learn more about the issues we face with the current model and the challenges that lie ahead. My focus throughout this process has been to formulate a proposal that will lower costs for Long Island families and businesses, ensure reliable service, protect workers, and provide a governing model with local control and accountability. Now, we must continue to work together to achieve these critical goals.”

For the report’s recommendations to be enacted, there will need to be support from the state legislature and Governor Hochul, a Democrat, and the Newsday expose pointed to ties between those lobbying for PSEG and some Democratic politicians. 

“Listed among the [Burgos] lobbyists working on the PSEG account is Kristen Walsh, who is president of the firm and formerly worked for U.S. Sen. Kirsten Gillibrand,” it related.
“Walsh, like Hahn had worked on the staff of U.S. Sen. Chuck Schumer.” The expose also noted that “Power Long Island, a political action committee funded by PSEG entities, contributed $5,000 to Hochul’s campaign last year, the PAC’s largest single donation, records show.”

Further, it said “campaign finance records” showed Power Long Island giving $2,000 to State Senator Monica Martinez last year. A Brentwood Democrat, she was the only member of the commission to vote against approving its report saying “the numbers are not there in my opinion” for annual savings of $50 million to $80 million.

Lisa Tyson, executive director of the Long Island Progressive Coalition, a leader in seeking to have LIPA operate the electric grid itself, said: “It’s an important milestone on the path to public power that the LIPA commission voted up this report. A lot of spadework and research went into it” and “clears the way for the New York State Legislature to vote on a bill to enable the switch in the 2024 legislative session, keeping us on track to make the transition before PSEG’s contract expires in 2025….That’s the way it should be, and the way LIPA was always intended to be run. Long Island’s ratepayers are the owners of the LIPA system as well as its customers. They deserve a real voice in how their utility is run, and once public power passes the legislature, they’ll get it.”

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.