PSEG LI spent $1M on promotional ads, $44G on arrears help, report says

With customer arrears soaring, PSEG Long Island since late December has spent more than $1 million to advertise to customers on how it’s “working on a cleaner more sustainable future,” while spending $44,632 on ads that educate financially struggling customers, a new report shows.

The report, resulting from a bill sponsored by Sen. Jim Gaughran (D-Northport) last year ordering LIPA and PSEG to detail lobbying and ad spending, comes as LIPA last week reported that customer arrears have more than doubled over two years, to $234.9 million, with residential arrears at $181.5 million.

Around a third of the more than 88,000 residential customers struggling to pay their bills are “eligible for field disconnection,” LIPA reported, meaning they could have their power turned off for nonpayment. PSEG spokeswoman Ashley Chauvin said the company "has remained very active in its outreach" to customers about financial and protection programs for cash-strapped customers. And she noted the $1 million ad spending involves a program that "advances New York state clean-energy goals." 

Meanwhile, the state comptroller’s office has approved LIPA’s new contract with PSEG Long Island, but with a series of caveats about LIPA’s need to step up oversight and enforcement of the pact. “Ensuring that PSEG LI is held accountable for the critically important requirements contained in this agreement must be a priority for LIPA,” the office wrote in a letter to LIPA chief Tom Falcone.

The disclosure report from PSEG also details how Christopher Hahn, a PSEG senior director/vice president who is also a Fox News contributor, lobbied lawmakers on at least five separate occasions seeking to “expand the scope” of a state budget bill that would create a new state commission to study converting LIPA to a fully public utility.

LIPA and its board last month pointedly criticized PSEG for lobbying to study selling off the utility to a private entity, but PSEG denied the charge, saying it lobbied for the bill to also examine a range of options, such as keeping the public-private model it currently operates under. LIPA noted studying privatization would restrict it from the bond market until the study was complete and cost ratepayers money. LIPA's board passed a resolution ordering PSEG to cease such lobbying and to disclose the scope and cost of its lobbying efforts. 

The PSEG report also gives more detail about its advertising spending, which totaled just over $2 million between Dec. 21 and March 31. The $1.1 million in ads about PSEG’s efforts “educate customers on how PSEG is working toward a cleaner more sustainable energy future” include $595,000 in spending on TV spots alone.

By comparison, PSEG spent a total of $44,632 on ads to tell customers “struggling to pay their electric bills” about government programs to help them defray some of those costs.

"Instead of alerting customers to relief assistance programs, PSEG is wasting millions of dollars of ratepayer funds in self-promotional spending," Gaughran said. "This disclosure report reveals PSEG does nothing but flood Long Islanders mailboxes, inboxes, and televisions with self-serving advertisements, all while PSEG fights against laws that would lower electric rates, protect ratepayers, and provide reliable service."

The comptroller’s letter to LIPA said it’s critical that LIPA hold PSEG’s feet to the fire with regard to the new contract between the two parties the office approved last Friday.

Half of PSEG’s roughly $80 million in annual compensation is at risk under the new contract, which includes 96 new performance metrics PSEG must meet to receive its full pay. The agreement, which came after months of sometimes acrimonious negotiations tied to PSEG’s failures during Tropical Storm Isaias, also gives the state Department of Public Service a greater oversight role.

“To effectuate the needed improvements for Long Island ratepayers, LIPA must ensure that this new process sets rigorous standards for each year of the agreement, working closely with DPS to provide a strong incentive for PSEG LI to fulfill its responsibilities,” the comptroller's letter obtained by Newsday states.

The letter also said LIPA also must ensure that PSEG’s performance can be “accurately assessed, (is) transparent, and that PSEG LI can be held accountable for any failure to meet these standards,” which are aimed at improving customer satisfaction, rate affordability and system reliability. “LIPA must be diligent about asserting its oversight role to ensure that ratepayers get reliable service at the lowest possible cost.”

LIPA, in a statement, said it was “pleased” by the approvals by the comptroller and the attorney general for a contract that “provides the terms, conditions, and metrics necessary to implement management and operational reforms." 

PSEG Long Island's interim president and chief operating officer Peggy Keane, in a statement, said the company "looks forward to continuing to serve" the region by "further improving system reliability, enhancing customer service and supporting the state's clean energy goals, while being an engaged and responsive community partner."

The comptroller’s letter noted that the new contract shortened a potential extension for PSEG to remain the grid manager to just five years beyond 2024, compared with the prior contract's eight. “It’s not too early for LIPA to make clear to PSEG LI, and to commit to its ratepayers, that any extension will depend on performance and the [LIPA] board’s evaluation of the alternatives to extension of the agreement.”

The letter notes that if LIPA determines a new contract with a third party be undertaken, “a competitive procurement process must be undertaken.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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