LIPA report raising new red flags over PSEG outage management system

With storm season well underway, LIPA is raising the latest in a series of red flags over PSEG’s rollout of a new computer system to manage customer outages.

In a report to be delivered to LIPA’s board of trustees Wednesday, LIPA staff noted it’s “difficult to tell whether the outage-management system works as it should” after they found a series of issues with PSEG testing protocols.

The report notes that 36% of LIPA’s own tests using PSEG’s testing methodology “have failed to date” because of “inadequate documentation, poorly written test scripts and scripts that plainly do not work.”

The LIPA tests are a prelude to full-system stress tests that it still must conduct and verify to be certain PSEG's newly installed computer system works following a series of failures during Tropical Storm Isaias, which saw 535,000 customers lose power for up to a week. 

PSEG, in a statement to Newsday Tuesday night, took issue with LIPA's characterization, saying it has "successfully performed and completed all testing of the outage management system according to industry best-practices under the observation of LIPA" and New York State regulators. 

Further, PSEG said LIPA's testing of the system "did not demonstrate that the system was not functional, but rather that the LIPA testers could not execute the test scripts without assistance. They were developed to be executed by individuals with strong knowledge of business processes and outage management system functionality." 

PSEG said it will "continue to support and provide outage-management system training to LIPA and their consultants and respond to specific feedback and questions.”

PSEG last week said its own tests of the system show it’s up to the task of managing a big storm, and it pointed to recent storms during which the system "performed well." 

The newest version of the outage management system has been "successfully" tested to simulate a "12-hour storm based on the events of Tropical Storm Isaias, and that simulates a 90% customer outage over a 24-hour period,” PSEG said.

But LIPA's to-do list for PSEG goes beyond the computer system test failures. The LIPA report notes that 39% of the recommendations it made to PSEG to address broader problems found after Isaias “remain incomplete two years after the event.”

PSEG’s responses to LIPA are “too often delayed, incomplete or suffer from quality-control issues,” the report said.

Continuing conflicts between LIPA and its $80 million-a-year contractor come as the State Legislature begins appointing a commission to consider LIPA’s potential future as a fully municipal utility.

State Sen. Kevin Thomas (D-Levittown), co-chair of the new LIPA commission, said, “We are moving as fast as we can” to staff the commission, and complete a draft report by year’s end. PSEG’s contract with LIPA runs through 2025. Assemb. Fred Thiele (D-Sag Harbor), the author of the bill to review a fully public LIPA, is co-chair of the commission. 

LIPA during Wednesday's board meeting is also expected to discuss continued volatility in natural gas prices and its impact on already-high rates. The power supply charge has been at near record-high levels in the past months, topping 12.8 cents a kilowatt hour in July, compared with 10.4 cents a year ago.

LIPA's program to hedge against fuel-price volatility saved the utility $113 million between January and June, and is expected to save another $202 million between now and December, LIPA said. But natural gas prices are spiking this summer, as heat waves increase demand, sending prices to nearly their high levels following Russia's invasion of Ukraine in the spring, LIPA reported. 

LIPA also will report that a vital undersea cable between Long Island and New Jersey is back at full 660-megawatt capacity — after about a year at half capacity because of land-based transformer problems — restoring greater access to cheaper power. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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