LIPA proposal would reimburse customers for long power outages

ALBANY — Long Islanders who suffer through extended power outages would soon be compensated for their days without power and for food and medication that spoiled, according to a proposal by the Long Island Power Authority.

LIPA staff proposed the reimbursement plan, which is scheduled for a vote by the LIPA board on Dec. 14. If approved, it would be effective Jan. 1.

The proposal follows a bill adopted by the State Legislature earlier this year that would have required many of the same provisions by law, but also would have required greater oversight of LIPA. Gov. Kathy Hochul, however, vetoed that measure last week.

The proposal would provide:

• A credit on bills of $25 per day to residential customers for each day they are without power after three days of a “widespread and prolonged outage.”
• Reimbursement up to $235 for food spoiled because of disrupted refrigeration. That reimbursement could be as much as $540 if a customer provides an itemized list and proof that it was ruined by the outage.
• Reimbursement for medication that was spoiled because of a lack of refrigeration. An itemized list and proof of loss would be required.
• Reimbursement to small business owners for food losses up to $540. An itemized list would be required.

It defines a widespread, prolonged outage as one in which power is out for more than three days from a major storm and affects at least 20,000 customers at the same time “due to utility-owned equipment unable to provide power.”

Proof of loss would include photographic images of replacement goods with the prices of the items, receipts from cash registers or credit cards, or other “verifiable documentation of the market value of the item.” Interviews with customers may follow to confirm the losses, according to the proposal.

It notes that an outage that cuts power to 100,000 residential customers for an average of four days could result in $2.5 million in credits and $23.5 million in reimbursement for spoiled food.

The effort is an attempt to subject LIPA and PSEG Long Island to the same reimbursement obligations as publicly owned utilities in other parts of the state.

“This proposal protects our customers from economic hardship that could result from severe storms,” said Thomas Falcone, LIPA’s CEO.

The bill that passed the State Legislature would have given the reimbursement requirement the strength of law. But Hochul vetoed it on Nov. 23. She said that while the intent of the bill is “laudable,” the proposal now being negotiated “will better align PSEG Long Island with other electric utilities in the state and avoid any unintended consequences that may result from a potential change that could be argued as altering the LIPA-PSEG Long Island” contract.

The bill would have subjected LIPA and PSEG Long Island to greater regulation by the state Public Service Commission, which it already has over other utilities. PSC commissioners set rates for electric, gas, steam, telecommunications and water utilities after reviews and public discussion, and they investigate outages as well as the performance of public utilities.

The LIPA proposal notes that LIPA continues to “not be subject to commission oversight.”

PSEG Long Island declined a request for comment.

“I think it would have been better to have it in legislation,” said Assemb. Fred Thiele (I-Sag Harbor), a sponsor of the bill. “I would have preferred to have it in law, but to me the main thing is that consumers get protected. That’s 90% of it. And maybe we come back another day and get into legislation.”

“But I’m results-oriented,” Thiele told Newsday. “I’ll take the victory on the substance.”

Sen. James Gaughran (D-Northport), the bill’s Senate sponsor, noted that “Long Islanders have less protection than other communities,” adding that while he applauds the LIPA proposal, "it certainly would be better if you had strength and abilities of the PSC to act."

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.