PSEG LI lobbies state officials amid discussion of a fully public LIPA

A PSEG Long Island executive and vocal critic of a state legislative plan to convert LIPA to a fully public utility had private meetings to lobby Gov. Kathy Hochul and other top state officials this summer, recently filed state records show.

The meetings came as LIPA was being critical of the company for missing key performance targets and falling behind on a plan to introduce new utility rates next year.

PSEG operates the Long Island grid under a contract to LIPA that expires in 2025 and would be replaced if LIPA were to go fully public.

Lobbying records released by PSEG to state officials show Christopher Hahn, senior director and vice president of governmental affairs for PSEG Long Island, met with Hochul on June 28 to discuss “PSEG Long Island updates.” Power Long Island, a political action committee funded by PSEG entities, contributed $5,000 to Hochul’s campaign last year, the PAC’s largest single donation, records show.

Release of the lobbying records by PSEG, signed by Hahn, is required following passage of a state law requiring PSEG to disclose lobbying and advertising spending after the LIPA board sharply questioned PSEG’s activities in 2021 and 2022.

Shifting to a fully public power model would save up to $80 million a year, backers of the plan say. But others at state hearings on the topic said they feared that putting it under public control would lead to patronage, higher rates and poor service.

Hahn, a former lobbyist at the firm Tonio Burgos & Associates, has been the most outspoken voice in opposition to a fully public LIPA at state hearings on the matter.

Several meetings held

The lobbying records also show that Hahn met on May 4 with Hochul’s assistant secretary for energy, Sean Ewart, and with the executive deputy of the Department of Public Service, Tom Congdon, for unspecified “updates.”

A record of that meeting in Project Sunlight state database indicates it was also attended by Carrie Meek Gallagher, the Long Island DPS director, and Tonio Burgos, principal of the lobbying firm. DPS has a “review and recommend” oversight role of LIPA.

Hahn did not return a phone call seeking comment Friday. A PSEG spokeswoman didn’t respond to messages, but previously has said it “does not use customer dollars for purposes other than providing services covered under its agreement with LIPA.”

Avi Small, a spokesman for Hochul, said Hochul and her administrative staff “meet with a wide variety of stakeholders on the key issues facing New York. The governor has been clear that she is committed to ensuring all New York utilities deliver affordable, clean and reliable energy that helps achieve New York’s climate goals while preserving affordability for consumers, and we will review all legislative proposals through that lens.”

Hochul’s office said the governor “did not discuss” the State Legislature’s commission on the future of LIPA “or any legislative proposals for Long Island’s energy system.”

DPS spokesman James Denn said, “As New York’s utility regulator, DPS maintains working relationships and meets regularly with all utilities, including PSEG-LI. Mr. Hahn provided Mr. Congdon with a general update of PSEG-LI issues, which included a reiteration of PSEG-LI’s public views on the Legislative Commission on LIPA’s work.”

The PSEG lobbying disclosure also shows Hahn met with state Sen. Monica Martinez (D-Brentwood) twice during the quarter, on April 30 and June 3, to discuss “updates,” the LIPA commission and another Senate bill. Martinez, who is a sitting member of the LIPA commission, received $2,000 from the Power Long Island PAC a year ago, according to state campaign finance records.

“Meetings with all stakeholders are a fundamental aspect of my responsibilities as a legislator,” Martinez said in an email. “Having an open door and hearing from all sides allows me to gather diverse perspectives and inform my decisions which are solely based on the best interests of my constituents and the people of this state.”

Hahn also disclosed lobbying meetings with Marvin Holland, chief of staff for state Sen. James Sanders (D-Queens), and Assemb. Stacey Pheffer Amato (D-Queens) to discuss the LIPA commission, among other things. Sanders is on the LIPA commission.

Aftermath of storm

The move toward a fully public LIPA kicked into high gear following admitted missteps by PSEG Long Island after Tropical Storm Isaias, which left more than 500,000 customers without power for up to a week. LIPA sued PSEG over its handling of the storm, and the suit was settled with a new contract that puts more of PSEG’s annual compensation at risk for a broad list of failures.

LIPA last month released a report showing a series of performance setbacks by PSEG that will delay plans for a wide-scale rollout of time-of-use rates for 2024 by at least a year, citing computer system delays.

“Project management deficiencies [by PSEG] persist, particularly in information-technology-related projects, several of which have experienced significant delays in 2023,” leading to schedule and budget overruns. PSEG needs “much more sophisticated project management, better control and oversight of vendors, better cost management and better quality control,” the report said.

At the state hearings, Hahn said PSEG brought “operational excellence” to Long Island’s utility, despite JD Power customer satisfaction rankings that put it near the bottom of large utilities across the nation. Hahn told the commission JD Power ranked PSEG at the top, but the company later clarified to Newsday that it was a subsection of Far Rockaway customers that had done so.

“Our future is at risk,” Hahn warned lawmakers. “Mismanagement by an unaccountable, patronage-fueled bureaucracy will not meet [state green-energy] goals on time, and will likely raise customer rates dramatically.”

Hahn called conclusions in a recent study by the LIPA commission’s outside consultants “misleading at best.” The studies said annual savings under a public entity would be between $48 million and $80 million a year, primarily because it would do away with the PSEG management contract for 19 PSEG executives and directors.

Additional lobbying efforts

In addition to Hahn’s lobbying, separate state lobbying disclosures show the company used Tonio Burgos & Associates and Mercury Public Affairs to lobby state agencies and officials. The January through June report for Mercury shows the company was paid $60,050 to lobby state Assemb. Doug Smith (R-Holbrook), a member of the LIPA commission, and Sen. Kevin Thomas (D-Levittown), its co-chairman.

Mercury also directly lobbied Amato, Sanders, Sen. Kevin Parker (D-Brooklyn) and Assemb. Ari Brown (R-Cedarhurst) on matters “related to utility regulation.”

The Burgos firm received $60,000 for the January through August period, and listed among the lobbyists working on the PSEG account is Kristen Walsh, who is president of the firm and formerly worked for U.S. Sen. Kirsten Gillibrand and attended at least one of the hearings on municipalization in September. Walsh, like Hahn, also had worked on the staff of U.S. Sen. Chuck Schumer.

In addition to its contributions to Hochul and Martinez, the Power Long Island PAC has given more than more than $22,000 to the Suffolk County Democratic Committee since 2016.

Suffolk Democratic Party chairman Richard Schaffer has been outspoken in opposition to a fully public LIPA. Last month, he provided a letter in his role as Babylon Town supervisor that was read during the Suffolk public hearing on the future of LIPA that called the potential transformation of LIPA to a fully public utility “highly problematic.”

“A LIPA takeover would cancel a management and oversight structure that is working for the ratepayers of Long Island,” wrote Schaffer. A fully public LIPA, he concluded, was a “very bad idea.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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