Southampton hearing on future of LIPA set as panel prepares for action

Ratepayers will get a another chance to weigh in on the future of LIPA as a fully public utility at a hearing in Southampton Friday before a state commission moves to formalize a plan for the 2023 legislative session.

The commission is working to finalize a draft report on a plan that would put the power authority fully in charge of running the utility, which is now managed by PSEG Long Island. Three public hearings took place late last year, and a fourth was added to allow Long Island’s East Enders to weigh in, said the commission co-chairman, Assemb. Fred Thiele (D-Sag Harbor). Another round of hearings will take place before the final report is issued in the spring. 

The draft report had been scheduled for completion by Dec. 31, but now is expected by mid to late February, Thiele said. The commission has hired outside counsel and a consulting firm to examine the logistics, governance and potential dollar impacts of the move, which LIPA has said could save ratepayers upward of $80 million a year.

PSEG, during hearings, has argued the best path forward is to keep it in the driver's seat, citing its past accomplishments for ratepayers and the potential pitfalls of LIPA going it alone. Thiele during hearings has dismissed PSEG's arguments, calling them "unconvincing and most of the time misleading." 

Thiele said he expects a final report with recommendations on any legislative action that would be needed this session could be concluded sometime in mid to late April (it was originally expected April 1). “The most important thing is that everybody be heard before we have that final report,” Thiele said.

LIPA has said it could take over control of the entity known as Servco — which is now operated by PSEG and consists of the more than 2,000 employees (mostly unionized), trucks, equipment and logistics — by hiring around a dozen new top-level managers and potentially working with outside contractors for specific tasks.

The move, which would happen when PSEG’s contract expires in 2025, may require legislation to allow LIPA, which owns the grid, to be among the entities legally allowed to take over day-to-day operations. In the past, the operation was managed by National Grid and its predecessors before PSEG won the contract in 2014.

Rory Lancman, a former state lawmaker who is executive director of the LIPA commission, said that while past public hearings provided a forum for entities such as PSEG and a labor union to express their reservations about a fully public LIPA, his job is not to determine if LIPA becoming a fully public utility is a good idea.

“It’s important for the people to understand that this is not a study commission,” he said. “We’re not examining the feasibility or advisability or fundamental wisdom of the public power model for LIPA.

“Our job is to deliver a plan that makes sense from where we are today for LIPA to run the electric grid on its own without paying tens of millions of dollars a year to a middleman,” Lancman said.

Lancman said, “We’re not capable of being influenced by PSEG or their lobbyists. It’s not our mission to decide whether or not PSEG or any other investor-owned utility should continue to act as middleman. Our job is to give the legislature a plan for cutting them out.”

The hearing starts at 11 a.m. at the Southampton Town Hall.

More information about the commission can be found at nylipa.gov.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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