LIPA chief Tom Falcone to step down at critical point for utility

Tom Falcone, the chief executive of LIPA who helped raise the utility’s financial underpinnings but also brought attention to performance failures by contractor PSEG Long Island, announced his resignation Monday.

He plans to leave the authority at the end of May. 

Falcone, who was president and chief executive of LIPA and its Utility Debt Securitization Authority, leaves at a critical juncture for the utility. The State Assembly is considering a bill to transition LIPA to a fully public authority, a measure that is stalled while awaiting a companion Senate bill. PSEG has lobbied intensely against the bill, Newsday has reported. 

LIPA also has been preparing an alternative bidding process for a new contractor to manage the grid, a critical step because PSEG's contract ends in December 2025. Falcone’s departure could signal that Gov. Kathy Hochul’s office isn’t receptive to either plan, which could lead to PSEG getting a contract extension. 

Assemb. Fred Thiele Jr. (D-Sag Harbor), who chaired a commission on the future of LIPA and wrote legislation to facilitate the transition to a public utility, called Falcone's resignation “unexpected.” 

Thiele said Falcone brought “necessary oversight to daily utility operations in the face of a third party manager [PSEG] that was seldom transparent and often acted in its own interest rather than the public interest. His resignation is a loss for Long Island and brings into question the future direction of LIPA.” 

Falcone and LIPA have been under unusually intense scrutiny in recent months after Hochul’s office appointed four new board members in the fall, including Tracey Edwards, a former PSC commissioner. In January, Edwards chaired a LIPA board meeting at which top LIPA managers were required to justify their pending projects, including staff and consulting costs — a change from board meetings in which trustees were openly critical of PSEG.

LIPA and Falcone had been pursuing alternatives to PSEG at the behest of the state Department of Public Service, which in 2020 recommended that LIPA seek a new grid operator and sue PSEG for contract failures. The move followed PSEG's admitted failures following Tropical Storm Isaias, which led to more than 650,000 outages, some for up to a week, and a series of communication failures. 

PSEG also didn't immediately have a comment on Falcone's resignation.

Falcone, who had become CEO in 2015, in a statement called his tenure at LIPA serving 1.2 million customers "an honor and a privilege."

"I am incredibly proud of what we've accomplished over the past decade and, most importantly, being the electric utility our customers truly deserve," he said.

In a statement, Edwards said, “On behalf of the LIPA Board of Trustees, I commend and thank Tom Falcone for his more than ten years of service at LIPA. Utility customers on Long Island and the Rockaways are better off thanks to his efforts to promote a reliable, clean and affordable energy system. We wish him all the best in his future endeavors.”

Former LIPA vice chairman Mark Fischl called Falcone’s departure a “sad day for Long Island,” noting when the two worked together over nearly a decade, Falcone was known to put in 60- to 80-hour work weeks. “For him every decision was for the benefit of ratepayers or to ensure the service provider [PSEG] that failed us on numerous occasions performed to the best of their ability.”

A copy of Falcone’s resignation letter obtained by Newsday ends by telling Edwards, “The task ahead is enormously complex and will require the total commitment of a knowledgeable and experienced chief executive and team.”

Katy Zielinski, a spokeswoman for Hochul, didn't respond to questions about whether the governor had forced Falcone to resign. In a statement, Hochul offered Falcone “congratulations” for his service at LIPA.

“For the last decade, he has worked to make the power system more reliable, support clean energy, and make sure the finances are sound,” the statement said. “Tom’s leadership and passion have helped create the foundation for the energy needs on Long Island and the Rockaways for now and many years to come.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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