LIPA chief: PSEG deserves only D-plus grade in operating electric grid

A top LIPA official testified at a hearing Monday on LIPA's future that PSEG deserved a grade of only a D-plus for operating the local electric grid because of lagging customer satisfaction scores and other missed performance metrics.

At the same state legislative hearing in the Rockaways, a PSEG official said the utility's scores for reliability and other measures were among the highest in the state and nation as he argued for allowing PSEG to be allowed to continue to manage the system.

The Legislative commission on the future of the Long Island Power Authority has been hearing public testimony over the past week to determine the best future course for LIPA, including as a fully public power utility that would do away with the public-private model that PSEG favors.

PSEG's contract with LIPA expires at the end of 2025, and LIPA has begun the process of putting out bids for a new contractor, in case the state commission balks at letting LIPA run the utility itself.

At public hearings Monday and last week, PSEG Vice President of External Affairs Christopher Hahn touted PSEG Long Island's scores for reliability and customer satisfaction in the J.D. Power Survey.

“Here in the Rockaways,” Hahn said, “PSEG Long Island’s J.D. Power approval score stands at a 3-year average of 837. This number would place us at number one in the nation by a mile.”

But state Assemb. Fred Thiele (D-Sag Harbor), the commission's co-chairman, said his “frame of reference is certainly to look at the J.D. Power reports that came out last year, where in residential customer satisfaction PSEG is near the bottom.”

Newsday has reported PSEG in 2022 scored 690 of a possible 1,000 points in residential customer satisfaction, fourth from last among large Eastern utilities. It was one of the factors that led the utility to miss key performance metrics in its LIPA contract. The year before, PSEG was second to last among that group, scoring 677.

PSEG spokeswoman Katy Tatzel said Hahn's reference to the three-year average score of 837 score was "for the Rockaways territory specifically. We are able to break down J.D. Power scores by ZIP code and analyze ZIP code specific feedback." 

At the hearing, LIPA chief executive Tom Falcone said PSEG had yet to make good on a goal to reach the top 25% among regional utilities in customer satisfaction.   

“We continue to struggle in this area,” Falcone said. Despite LIPA having spent “significant sums to improve customer service, PSEG ranked in the bottom 25% of peer utilities” by J.D. Power in 2022, Falcone said.

In metrics used to determine PSEG's compensation, the company achieved only 47% of the customer service performance metrics established by LIPA last year.

Falcone said he based his D-plus rating of PSEG on the fact that the company hit only about 69% of metrics overall.

Falcone also disputed Hahn’s assertion that LIPA is an “unaccountable, patronage-fueled” bureaucracy with an operating budget that has increased 25% a year over the past decade.

“Ironically, the largest driver of LIPA’s operating budget increase is PSEG’s own management fee, which we all can appreciate is now too high,” Falcone said.

Assemb. Khaleel Anderson (D-Far Rockaway) cited LIPA's performance during Superstorm Sandy that left some Rockaways customers without power for 30 days or more. Addressing LIPA and PSEG officials, Anderson said: "You’re both bad." LIPA was operated by National Grid during Sandy. 

The legislative commission has scheduled another hearing for Wednesday at Southampton Town Hall at 11 a.m. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.