In wake of Isaias report, LIPA trustees approve 100-plus recommendations for PSEG

LIPA trustees on Wednesday unanimously approved a list of more than 100 recommendations to address problems identified in a scathing task-force report of PSEG’s failures in restoring power after Tropical Storm Isaias.

Board members and LIPA officials were blunt in their assessment of PSEG Long Island's actions as detailed in the report, heavily criticizing the company for withholding information, failing to perform and failing to fix mission-critical systems to this day.

LIPA chief executive Thomas Falcone during the meeting called it "totally inexcusable" that LIPA had to rely on emails to get to many of the findings in the report.

"Let’s be honest," he said. "Business partners — good business partners — are honest and open about problems. And PSEG was neither open nor honest, and we obviously cannot depend on their representations in anything."

Trustee Drew Biondo said PSEG "flat-out lied to us. They lied to several legislative bodies and more importantly they lied to our customers."

Trustee Laureen Harris added, "the fact that they have not in four months corrected these glaring infirmities is inexcusable."

PSEG spokeswoman Ashley Chauvin, in a statement after the board meeting Wednesday, said: "We value our relationship with LIPA and are carefully reviewing their recommendations.

"PSEG Long Island is committed to continuous improvement, transparency and accountability," she said. "We know that real action is needed and needed now. To that end, we have been hard at work on a number of systems, process and organizational improvements, some of which have been completed with many more in progress."

Among the highest-priority recommendations from the report:

• PSEG must give LIPA a stronger say in PSEG appointments and transparency into compensation of PSEG management.
• LIPA must impose stiffer penalties for emergency restoration plan violations.
• PSEG Long Island must more closely align its management and incentives "to Long Island interests."

The LIPA task force found that PSEG’s top officials knew of serious problems with an outage computer system that manages its response to storms more than a month before Isaias lashed Long Island on Aug. 4, but that PSEG Long Island officials were overly dependent on "absentee management" from their corporate parent in New Jersey to get the problems fixed. Problems with the computer system and a separate telephone system that also crashed after the storm persist to this day. LIPA says if PSEG won't fix the problems and renegotiate its contract, which expires in 2025, LIPA may terminate it.

Other key findings in the report include:

• PSEG failed to use upward of 1,000 National Grid employees to help with the storm, even as PSEG's ability to assess damage locations "performed poorly." The report pointed to more than 8,000 "truck rolls" to dispatch crews to supposed outage locations where no repair was even needed.
• PSEG drills in advance of the storm were "formulaic," lacking real-life scenarios like Isaias.
• PSEG's claims about smart meters being linked to its outage system were overblown.
• "Newark bosses" at PSEG's New Jersey parent were in part responsible for a "lack of transparency."

More than 500,000 of LIPA’s 1.1 million customers lost power during the storm, with more than 646,000 outages, and many sat fuming in the heat and darkness after the storm unable to get responses or accurate restoration times. PSEG’s website, its outage map and its texting systems all failed during and after the storm.

Falcone at the meeting called LIPA's future relationship with PSEG "uncertain."

Trustee Peter Gollon wondered aloud whether "we perhaps have gotten too comfortable with our so-called partners at PSEG?" He asked whether the faulty "matrix" management that left key PSEG Long Island functions reporting to New Jersey should have been "noticed and understood [by LIPA] ahead of time."

Falcone acknowledged the LIPA may have missed some "warning signs" of problems along the way, but said now as LIPA works more directly to fix the problems "we’re finding that they have terrible project management, they have terrible management, and they have incompetent people."

"This was a cataclysmic failure of [PSEG] Long Island’s information technology," Falcone added, "but I don’t think anybody in New Jersey is going to lose their job or have their bonus reduced" as a result.

Trustee Matthew Cordaro noted that the region was now entering the ice storm and nor’easter season with broken computer and telephone systems, and asked what preparations LIPA had in place.

Falcone noted as much and said, "I think we’ve lost faith that they have the competence to get the work done. That’s why we’ve recommended that they hire outside consultants that can help then. They appear to lack the technical competence to get this done."

LIPA vice chairman Mark Fischl, pointing to the "brutally honest" task force report, noted that after his five-day outage following the storm he received 14 different estimated times of restoration from PSEG, which "is just hard to imagine." None was accurate, he added.

Elkan Abramowitz, another trustee, said the task force report showed that the structure of LIPA was "fantastic," given the board and LIPA’s ability to investigate and correct problems. "The fact that staff was able to compile this information and make these recommendations" was a "great tribute to LIPA as an institution and I’m very proud to be a part of it."

Trustee Sheldon Cohen suggested the findings and recommendations indicated LIPA was "beyond the relationship we had with PSEG" and moving into a "different phase." LIPA needs to keep "eyes wide open" as it moves into that phase, he said.

Long list of findings

The task-force report takes issue with PSEG’s "lack of transparency" with LIPA before and well after the storm, failing to tell officials of the problems with the computer system after PSEG forced an upgrade of the system in June. LIPA officials weren’t told of those problems until after its Isaias investigation began, they said.

As of November, the report says, PSEG’s computer experts still don’t know the capacity of the computer system to handle incoming requests for repairs, a "very alarming" finding given the system’s central role in connecting "every other subsystem" for storm response. LIPA chief Thomas Falcone, in an interview, said recent tests showed the system failed when faced with 100,000 to 200,000 customer repair requests, well below the more than 400,000 that took place after Isaias.

It wasn’t just the computer system that failed. The report notes, among a list of dozens of troubling findings, that PSEG "missed an opportunity" to use about 1,000 National Grid employees already located on Long Island to help in the restoration effort. Newsday previously reported on that decision. PSEG has an agreement with National Grid to use the employees — who are familiar with the system as National Grid formerly operated it and continues to own most Long Island power plants — but didn’t enact it, and PSEG doesn’t have an ongoing program to train them. The task force found that PSEG’s damage assessment after the storm, a function that National Grid employees could have helped, was "slow and became a major hurdle in storm restoration and providing accurate estimated restoration times to customers."

PSEG’s ability to assess and verify damage during the storm also "performed poorly" during the restoration effort, the task force found. On Aug. 11, for instance, about 3,995 work assignments for crews turned out to be "okay on arrival," meaning that no restoration effort was even needed there, compared with 1,974 assignments that actually restored customer outages. "This means that for every job site where a crew completed repairs to serve customers, that crew visited two other locations where no repairs were needed," the report found.

During the course of the restoration, more than 8,000 dispatches of crews to supposed outage locations were found to be not needed.

The report found PSEG’s efforts to update a critical-care customer list was minimal, with only a single letter sent to those on the list to verify if they had "life-sustain equipment" that needed electricity. Those letters only received a 43% response rate. It led to "unnecessary calls and field visits" to some of these accounts, including by local police and emergency crews, that didn’t need special care, "thereby risking [critical care customers who] may truly require help and may not be reached."

Thousands of emails

Task force investigators pored over thousands of PSEG emails in the course of their 90-day probe and concluded that "PSEG lacks transparency," not just before the storm but during the restoration and after it. They pointed to numerous emails showing the outage management system "was not working before the storm hit," yet failed to tell LIPA officials about the problem.

"In fact, even after the storm and the catastrophic crash [of the system], LIPA had to learn about the problems … from reading PSEG’s emails" months later, as part of the probe, the report says.

"PSEG staff appear to report what they wish to whom they wish," investigators concluded. "They do not always report critical information to LIPA."

The emails also showed PSEG officials in conflict about how much the utility should blame Verizon for its communications problems, with one saying, "I feel we may be a little too heavy on Verizon." PSEG’s eventual message went ahead with Verizon cited as the chief problem, despite numerous computer and outage map problems unrelated to the phone system.

The report found PSEG’s drills in advance of storms are "formulaic" and provide "little preparation for contingencies," as one LIPA trustee previously noted in a Newsday story. Training "does not address abnormal conditions, such as loss of the outage management [computer] system or down communication systems," the report found.

Smart meter rollout

And despite PSEG officials' assurances that a new generation of smart meters being installed in ratepayers homes were able to automatically locate outages, PSEG has not yet completed an integration of that system to its outage management system so that the utility can tell which customers are without power. PSEG has spent hundreds of millions of dollars on the rollout.

PSEG in November 2019 said it had "successfully launched" the integration, the report said, but that pilot program was "never fully operational." PSEG at one point had asserted that one reason it had to upgrade to a newer version of the outage management system was to integrate the smart-meter data.

"PSEG Long Island failed to deploy the integration of [smart-meter] outage information as a component of the [newer outage management system] upgrade," the report says. If it had, the report concludes, "its ability to localize outages, avoid unnecessary dispatches of repair crews where power had already been restored, and restore customers’ electric service would have been greatly improved," the report says.

The task force expressed new concerns about PSEG’s "slow" and "false-start-mired" efforts to design and implement a new telecommunications system after it failed during the storm, concluding that PSEG Long Island’s team "lacks the expertise to manage this project to timely completion." Worse, LIPA has "deep reservations" with the design PSEG has proposed to fix the problems, as recent tests of the system have failed.

PSEG’s customer call center, with 120 people on board, is "inadequately staffed" in the event of another telecom breakdown, investigators found. The report found that after Isaias, more than 1 million customer calls and texts were lost.

The report found a municipal portal designed by PSEG to provide outage and restoration data, and a communications points for local governments "failed to perform" during and after the storm. It also found PSEG’s social media messaging platforms were overwhelmed and left "many" customer inquiries unanswered.

Score of 260

Among issues to be addressed by LIPA's board Wednesday is a score card of PSEG Long Island's performance in the storm. PSEG, the report says, scored a 260 of a possible 1,000 points on a LIPA score card of the contractor's performance for Tropical Storm Isaias, according to an appendix filed with a LIPA task force report on PSEG’s response to the storm.

The major storm performance metric evaluates how well PSEG prepares for a storm, how it responds operationally and how well it communicates. LIPA’s grade of 260 is well below the minimum performance level of 410, the report says.

For many of the categories, PSEG received zero points. For instance, the company earned a zero for alerting lifesaving equipment customers properly during the storm. LIPA previously found PSEG did a poor job updating the critical care customer list. It also earned a zero for compliance with training programs.

Other zero scores for PSEG included for downed wire response (some customers said they waited days with live wires down on their properties), estimated restoration time accuracy and availability, safety, and all of eight categories of communication, with the exception of reporting to the Department of Public Service. That meant zero scores for call answer rates, calls to municipalities, availability of its website, outgoing messages on its telephone lines and customer communications.

PSEG failed to perform to the minimum contractual standard "by a wide margin," the task force wrote, and no "reasonable revision" of the grading would change the result. A second failure in two years will give LIPA the right to terminate the contract without penalty, and the low score will be a "key component" of whether LIPA renews the contract with PSEG when it expires in 2025.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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