PSEG LI report says it should receive $15.7M in bonus pay for managing electric grid
A PSEG truck is viewed in Commack on July 2, 2019. PSEG Long Island has reported that it earned 68.5% of the total $22.9 million bonus compensation it could have received for achieving performance targets for 2024, making the case to receive a total of $15.74 million in special incentive pay. Credit: James Carbone
PSEG Long Island reported that it earned 68.5% of the total $22.9 million bonus compensation it could have received for achieving performance targets for 2024, making the case to receive a total of $15.74 million in special incentive pay.
PSEG’s 2024 score, slightly lower than last year, comes after efforts by the Long Island Power Authority and its board to lower the number of performance metrics PSEG must achieve to earn the bonus pay, to 61 last year from 93 in 2023. LIPA has since further lowered the number to 52 metrics this year. New Jersey-based PSEG operates the grid for LIPA under an $80 million annual contract which expires in December.
On a category basis, PSEG last year said it earned 49.3%, or $2.26 million, of the potential $4.95 million bonus it could have achieved for customer service performance and 54%, or $1.86 million, of the potential $3.4 million for information technology work performance, according to a copy of the PSEG report of its performance obtained by Newsday.
PSEG scored higher in the category of power supply and clean energy, earning 98%, or $2.25 million, of the available compensation and 73.2% for electric transmission and distribution performance, the report says. Newsday previously reported PSEG in 2024 missed two of the most important measures of electric system reliability, involving the duration and frequency of customer outages. As a result, PSEG said is eligible to earn $6.7 million of the total $9.1 million in bonus pay available in the transmission and distribution category.
PSEG earned 76.6 %, or $2.6 million, of the bonus compensation for business services performance, according to the company’s report, which has been submitted to the state Department of Public Service and LIPA for review. The two agencies will vet the report and determine if the total $15.7 million is justified.
PSEG, in an emailed statement, noted it is in "the early stages of the formal review process with LIPA and DPS and the reported results are to be considered draft until the review process is completed in mid-June." The company said it will be "happy to provide a comment once the report is finalized in June."
In 2022, PSEG qualified for $14.8 million of a potential $21 million in bonus compensation, Newsday reported, after partially or fully meeting 73 of 93 metrics that year. In 2023, PSEG qualified for a $15.3 million bonus, representing an overall 69% financial performance rating, according to a LIPA report cited by Newsday.
PSEG didn’t respond to a Newsday request for a copy of the latest report, which was supplied at the newspaper's request by the state Department of Public Service and LIPA.
Many of the performance metrics were originally instituted after PSEG’s acknowledged failures following Tropical Storm Isaias in 2020, which led to more than 650,000 outages, some for up to a week. In the ensuring years, PSEG has been criticized by LIPA’s board for lagging performance in customer call centers, customer satisfaction, efforts to separate LIPA computers from those of PSEG’s parent, and, more recently, for worker safety and outage performance.
PSEG’s report card for 2024 comes as LIPA’s board is debating whether to turn over control of the management of the electric grid to Houston-based Quanta Services or PSEG. Some on the LIPA board are said to be pushing for PSEG to be awarded the contract, even though Quanta reportedly received high scores from LIPA staff, Newsday has reported. The board is meeting in private on Monday to further discuss the contract.
Of total of 61 metrics for 2024, PSEG fully met 31, partially met 18 and failed to meet 10 metrics. (Two metrics were "reallocated" to other categories). One of the fully missed metrics was one that measured the effectiveness of PSEG's vegetation management program, for trimming trees and branches to head off impacts for future storms. The company earned no bonus of a potential $344,634 for the metric.
As Newsday reported earlier this month, the company also missed a critical safety measure relating to serious injury to workers and contractors, earning no incentive pay against a potential $516,951. PSEG at the time said it remains "committed to our target of zero safety incidents and work to continuously improve the safety or our employees and contractors."
The reliability measures that were missed are known as system average interruption duration and average duration frequency, for which PSEG said it failed to earn a combined $832,000. PSEG also missed a metric for LIPA’s asset management program over asset inventory.
PSEG fully missed a metric that has sought since 2022 to segregate LIPA’s information technology computer systems from those of PSEG’s parent in New Jersey. Newsday has reported the program has been beset by delays and cost overruns. PSEG missed out on a potential $1.2 million in bonus pay for not achieving the measure. The work is largely expected to be completed by the end of this year.
PSEG also missed a measure that examines the performance of its customer call center. That meant PSEG was not eligible for $344,634 in bonus pay. Performance issues with the call center led PSEG to launch a campaign in 2023 to address the problems, and 2024 saw some performance improvements.
Also fully missed were measures for low- to moderate-income program participation ($299,756), customer arrears greater than 90 days ($229,756) and interactive voice response containment rate, which relates to how many customers are served through calls through the automated call system.
PSEG partially hit measures such as containing the full-time employee vacancy rate to an unspecified level, improving its budgeting, billing and collection efforts, and JD Power customer satisfaction scores for both business and residential ratepayers. On the satisfaction scores, PSEG said it achieved about 25% of the metrics, earning $71,798 of a potential $287,195 each for the residential and business scores.
PSEG said it also earned $172,317 for a category known as outage information satisfaction, or around 75% of the total $229,756 available. Another measure that was only partially achieved was that for call average handle time, for which PSEG says it earned 25% of the total $344,634 available, or $86,158.
PSEG Long Island reported that it earned 68.5% of the total $22.9 million bonus compensation it could have received for achieving performance targets for 2024, making the case to receive a total of $15.74 million in special incentive pay.
PSEG’s 2024 score, slightly lower than last year, comes after efforts by the Long Island Power Authority and its board to lower the number of performance metrics PSEG must achieve to earn the bonus pay, to 61 last year from 93 in 2023. LIPA has since further lowered the number to 52 metrics this year. New Jersey-based PSEG operates the grid for LIPA under an $80 million annual contract which expires in December.
On a category basis, PSEG last year said it earned 49.3%, or $2.26 million, of the potential $4.95 million bonus it could have achieved for customer service performance and 54%, or $1.86 million, of the potential $3.4 million for information technology work performance, according to a copy of the PSEG report of its performance obtained by Newsday.
PSEG scored higher in the category of power supply and clean energy, earning 98%, or $2.25 million, of the available compensation and 73.2% for electric transmission and distribution performance, the report says. Newsday previously reported PSEG in 2024 missed two of the most important measures of electric system reliability, involving the duration and frequency of customer outages. As a result, PSEG said is eligible to earn $6.7 million of the total $9.1 million in bonus pay available in the transmission and distribution category.
WHAT NEWSDAY FOUND
- PSEG Long Island says it earned 68.5% of its potential $22.9 million bonus for 2024, totaling $15.74 million, after a reduction in performance metrics from 93 in 2023 to 52 in 2024.
- The company scored higher in power supply and clean energy (98%) and electric transmission and distribution (73.2%), but missed key metrics in system reliability, safety, and IT system segregation.
- PSEG's performance report is under review by LIPA and the state Department of Public Service, with a final decision on the bonus expected in mid-June.
PSEG earned 76.6 %, or $2.6 million, of the bonus compensation for business services performance, according to the company’s report, which has been submitted to the state Department of Public Service and LIPA for review. The two agencies will vet the report and determine if the total $15.7 million is justified.
PSEG, in an emailed statement, noted it is in "the early stages of the formal review process with LIPA and DPS and the reported results are to be considered draft until the review process is completed in mid-June." The company said it will be "happy to provide a comment once the report is finalized in June."
In 2022, PSEG qualified for $14.8 million of a potential $21 million in bonus compensation, Newsday reported, after partially or fully meeting 73 of 93 metrics that year. In 2023, PSEG qualified for a $15.3 million bonus, representing an overall 69% financial performance rating, according to a LIPA report cited by Newsday.
PSEG didn’t respond to a Newsday request for a copy of the latest report, which was supplied at the newspaper's request by the state Department of Public Service and LIPA.
Many of the performance metrics were originally instituted after PSEG’s acknowledged failures following Tropical Storm Isaias in 2020, which led to more than 650,000 outages, some for up to a week. In the ensuring years, PSEG has been criticized by LIPA’s board for lagging performance in customer call centers, customer satisfaction, efforts to separate LIPA computers from those of PSEG’s parent, and, more recently, for worker safety and outage performance.
PSEG’s report card for 2024 comes as LIPA’s board is debating whether to turn over control of the management of the electric grid to Houston-based Quanta Services or PSEG. Some on the LIPA board are said to be pushing for PSEG to be awarded the contract, even though Quanta reportedly received high scores from LIPA staff, Newsday has reported. The board is meeting in private on Monday to further discuss the contract.
Of total of 61 metrics for 2024, PSEG fully met 31, partially met 18 and failed to meet 10 metrics. (Two metrics were "reallocated" to other categories). One of the fully missed metrics was one that measured the effectiveness of PSEG's vegetation management program, for trimming trees and branches to head off impacts for future storms. The company earned no bonus of a potential $344,634 for the metric.
As Newsday reported earlier this month, the company also missed a critical safety measure relating to serious injury to workers and contractors, earning no incentive pay against a potential $516,951. PSEG at the time said it remains "committed to our target of zero safety incidents and work to continuously improve the safety or our employees and contractors."
The reliability measures that were missed are known as system average interruption duration and average duration frequency, for which PSEG said it failed to earn a combined $832,000. PSEG also missed a metric for LIPA’s asset management program over asset inventory.
PSEG fully missed a metric that has sought since 2022 to segregate LIPA’s information technology computer systems from those of PSEG’s parent in New Jersey. Newsday has reported the program has been beset by delays and cost overruns. PSEG missed out on a potential $1.2 million in bonus pay for not achieving the measure. The work is largely expected to be completed by the end of this year.
PSEG also missed a measure that examines the performance of its customer call center. That meant PSEG was not eligible for $344,634 in bonus pay. Performance issues with the call center led PSEG to launch a campaign in 2023 to address the problems, and 2024 saw some performance improvements.
Also fully missed were measures for low- to moderate-income program participation ($299,756), customer arrears greater than 90 days ($229,756) and interactive voice response containment rate, which relates to how many customers are served through calls through the automated call system.
PSEG partially hit measures such as containing the full-time employee vacancy rate to an unspecified level, improving its budgeting, billing and collection efforts, and JD Power customer satisfaction scores for both business and residential ratepayers. On the satisfaction scores, PSEG said it achieved about 25% of the metrics, earning $71,798 of a potential $287,195 each for the residential and business scores.
PSEG said it also earned $172,317 for a category known as outage information satisfaction, or around 75% of the total $229,756 available. Another measure that was only partially achieved was that for call average handle time, for which PSEG says it earned 25% of the total $344,634 available, or $86,158.
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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