Hochul orders audit of salaries at utilities, but it won't include LIPA, PSEG LI
Power lines along Ruland Road in Melville. Credit: Newsday/Steve Pfost
The state Public Service Commission on Thursday approved Gov. Kathy Hochul’s request for a wide-ranging audit of nonunion salaries at utilities across the state, but the audit will not include LIPA or PSEG Long Island, officials confirmed.
Hochul in an unusual move on Tuesday called for the audit after Con Edison filed for a rate increase that would raise New York City customers’ electric bills by 11.4% and their gas bills by 13.3%. She called the request excessive and said she’d ordered the PSC to lower it.
"The cost of living is too damn high and New Yorkers need more money in their pockets," she said Tuesday.
Hochul has made improving affordability a top priority after Republicans made inroads with voters in the last three election cycles. Republicans ran on a mantra that Democrats have made living in New York unaffordable for families through high taxes and expensive progressive programs.
WHAT NEWSDAY FOUND
- The state Public Service Commission has approved Gov. Kathy Hochul’s request for a wide-ranging audit of nonunion salaries at utilities across the state.
- Hochul called for the audit after Con Edison filed for a rate increase that would raise New York City customers’ electric bills by 11.4% and their gas bills by 13.3%.
- The audit will not include LIPA or PSEG Long Island.
But Hochul's demand will not include a similar audit of Long Island Power Authority salaries or those of its contractor, PSEG Long Island. LIPA salaries are already public and PSEG’s top nine Long Island officials’ salaries are public following passage of a law aimed specifically at PSEG’s prior reluctance to release them, lawmakers said at the time.
But the PSC is giving LIPA a pass for other reasons.
PSC spokesman James Denn explained the audit won’t include LIPA or PSEG because the state Department of Public Service "has separately audited PSEG and LIPA, and on an annual basis reviews the incentive compensation paid to PSEG LI against numerous performance metrics."
While the five-year management audit does examine certain elements of compensation, it is chiefly an examination of the utility's "governance, program and project management, system planning, customer operations and communications."
Denn noted Hochul's management compensation audit "will focus on the investor-owned utilities."
Denn said the audit would include a review of salaries at National Grid, which operates the natural gas system and power plants on Long Island.
The audit “will look at major utilities, including National Grid (Long Island), on a going-forward basis,” he wrote in an email. “The information collected will be used to inform future rate cases, not past rate cases."
LIPA and PSEG technically are not under the jurisdiction of the Public Service Commission, but rather under "review and recommend" oversight by DPS. That distinction came as a result of former Gov. Andrew M. Cuomo's LIPA Reform Act of 2013.
"LIPA is not subject to the commission’s audit," LIPA spokeswoman Jen Hayen said. "LIPA’s governance and rate-setting process are overseen by a public board of trustees."
Hochul’s five appointees on the LIPA board include the chairwoman, Tracey Edwards.
While LIPA, as a result of the law, is subject to an exhaustive five-year management audit by DPS, the utility has not undergone a full rate review since 2015. That's because LIPA has kept the delivery charge portion of customer bills below 2.5% each year since then, even though other elements of customer bills have increased (and sometimes fallen) in the interim.
LIPA’s board in December approved an average $7 a month rate hike for 2025, much of it tied to increases to service on its approximately $11 billion debt. That follows an average $30 a month increase approved in the prior year.
Separately, in August, the state PSC approved National Grid’s request for a three-year rate hike that increased bills an $33 a month starting last September, Newsday reported.
State figures show LIPA and National Grid customers are struggling like many others across the state to pay utility bills.
For PSEG Long Island, there were 115,650 residential customers who were more than 60 days late paying their electric bills in December, with an arrears amount that exceeded $77 million, according to state figures compiled by AARP. The figures are slightly down from 2023, when 120,317 were more than 60 days late paying their bills for total arrears that month of $80.1 million.
PSEG in December issued 9,205 final termination notices for nonpayment, compared with 9,219 notices a year ago.
For National Grid on Long Island, there were 47,460 residential customers more than 60 days late paying their bill in December, compared with 48,560 a year ago. The amount in December totaled $37 million, compared with $35.9 million for December 2023.
National Grid in December issued 11,523 final termination notices for nonpayment, compared with 16,433 a year ago, according to the state figures.
PSEG Long Island’s top nine officials release their salaries annually to the DPS, following passage of a 2017 state law that resulted from Long Island lawmakers’ frustration over PSEG’s prior lack of salary disclosure.
In the most recent filing, for 2023, interim president and chief operating officer Dave Lyons received $779,729 in total compensation, including $285,819 in salary, $120,500 in bonus and $234,539 in other compensation. Gregory Filipkowski, managing director and chief information officer, received $691,532 in total compensation, including $335,500 in salary, $168,400 in bonus and $163,081 in other compensation.
Paul Napoli, managing director and vice president for power markets, received $685,917 in total pay, including $274,243 in salary, $131,500 in bonus and $142,731 in other compensation. Senior director and vice president of external affairs Christopher Hahn received $466,762 in total compensation, including $255,480 in salary, $93,000 in bonus and $80,572 in other compensation.
All salaries of LIPA employees are public, including $365,000 to LIPA acting chief executive John Rhodes. In 2023, LIPA’s top-paid officials were chief operating officer Mujib Lodhi at $389,798, former CEO Tom Falcone at $384,983 and senior vice president Billy Raley at $361,178. LIPA general counsel Barbara Jean O’Connor made $355,111 and senior adviser for oversight Kenneth Kane made $308,625, according to the Empire Center’s SeethroughNY.net database.
PSEG has hundreds of middle managers who are not in the union and not among the ranks of the nine top officials whose pay is disclosed annually. PSEG does not disclose middle-manager pay, and some 2,000 unionized workers’ pay is also not disclosed.
With Michael Gormley.
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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