Comptroller rips LIPA for PSEG Isaias response

State Comptroller Thomas DiNapoli has expressed “serious issues” about LIPA’s ability to provide oversight of PSEG Long Island in the wake of the utility’s disastrous response to Tropical Storm Isaias.

In a letter sent to LIPA chief executive Tom Falcone Tuesday and obtained by Newsday, DiNapoli cited ratepayers' unsuccessful attempts to call in outages to PSEG, including emergencies with downed power lines, and said LIPA customers “may question whether the storm response failures during and after Isaias were anomalous or a warning of what may lie ahead as severe and less predictable storms become more common."

DiNapoli was making a reference to PSEG Long Island president Dan Eichhorn’s statement earlier this month that the company’s poor performance in responding to customers during the storm was “an anomaly.”

State Assemb. Steve Englebright (D-Setauket), in advance of state hearings last week, said he was considering legislation that would restore the comptroller’s role in oversight of LIPA, including in audits and other matters. Sen. Jim Gaughran (D-Northport) said he is working on a companion bill in the Senate. 

That authority was removed with the 2013 enactment of Gov. Andrew M. Cuomo’s LIPA Reform Act, which gave the state Department of Public Service “review and recommend” oversight of PSEG. LIPA’s board has the ultimate authority in passing rate hikes and other matters.

“When my office approved the initial [PSEG contract] in 2012, we noted that LIPA needed to remain responsible for oversight of the services provided by PSEG and that key guidance documents, including storm and emergency plans, must still be developed, refined, and adopted during the transition period, and in some cases, annually for the term of the contract,” DiNapoli wrote.

But a later version of the contract that gave PSEG a bigger role eliminated the comptroller's role in reviewing and approving the agreement. DiNapoli noted that at the time, his office raised “many concerns” about the loss of oversight.

“From my office’s perspective, LIPA’s diminished oversight authority over PSEG was and remains a particular concern,” he wrote.

He noted that the PSEG contract gives LIPA the option to extend the contract, “based on performance,” through 2023 and added, “It’s not too early for LIPA to make clear to PSEG, and to commit to its customers, that any extension will be based on measurable criteria, including storm response performance.”

DiNapoli noted a state Department of Public Service management audit in 2018 found “issues with the accuracy” of the data from PSEG’s outage management system, a major cause of the failures during Isaias. He noted hundreds of millions of dollars spent in storm preparation and said still “many Long Island residents suffered prolonged outages that made business operations, educational activities and endurance of pandemic-induced home stays even more difficult than was already the case.”

He advised LIPA and PSEG to “comprehensively address” issues with communication and outage reporting systems, saying Long Islanders “deserved a full accounting.”

As for LIPA’s oversight, he said, the authority “must demonstrate how it will ensure these failures do not occur again.”

LIPA, in a prepared statement, said: "We agree with Comptroller DiNapoli. LIPA will independently validate the root causes and correction of PSEG Long Island’s customer communication and outage reporting difficulties through our 30-day, 90-day, and 180-day reports." 

The statement noted LIPA"s "staff and consultants are actively working on these issues. In the meantime, LIPA is closely monitoring the immediate actions PSEG Long Island has made to the outage management and communications systems, including software changes, stress tests, and reconfiguration of phone systems with third-party providers to handle heavier call volumes.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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