Commission must take a fair look at the future of LIPA

Members of LIPA's unpaid board of trustees come from diverse backgrounds but have one mission: to serve the best interests of our 1.2 million customers and provide them with an excellent electric utility. 

That requires a willingness to ask hard questions and provide meaningful oversight, especially given the utility's troubled history. I have spent a lifetime as a scientist and educator — including as chair of the chemistry department at Stony Brook University — and I am pleased to bring that perspective to the LIPA board, to work for customers by promoting policies that provide a clean, reliable, and customer-first electric grid.

I was excited that the 2022 state budget included a Legislative Commission on the Future of LIPA. This commission has a straightforward and important goal: Investigate and report to the legislature on establishing a public power model for the operation of Long Island's electric grid. LIPA owns the grid, but has paid private companies to run day-to-day operations. Before Superstorm Sandy, National Grid and formerly KeySpan were the utility's “service providers.” Since 2014, PSEG Long Island has managed and operated the grid under its own name, while overseen by LIPA.

The commission is looking to change this model to one that operates as a fully publicly owned and operated utility, referred to as municipalization. Commission co-sponsor and co-chair Assemb. Fred Thiele put it very well in July when he said, “The third-party management model that LIPA has used for decades has failed time and again.”

The one model not yet tried is for LIPA to directly hire the senior management of the utility. Currently, LIPA pays PSEG Long Island about $80 million per year to provide 19 members of management and its brand name. LIPA owns all the assets and pays for all other employees and expenses to run the grid. LIPA is the only major electric utility in the 50 states to use this contract model, and it is not widely regarded as a success. And while a new contract with greater accountability became effective in April 2022 in the aftermath of PSEG’s failed response to Tropical Storm Isaias, that improvement does not change the outsized fee we pay a for-profit company for relatively few management positions.

This commission represents an unprecedented opportunity — not in a crisis but through a deliberative process — to fully consider the best possible model of governance for LIPA and the residents we serve. I am hopeful that everyone associated with this process comes to the table with a truly open mind and a commitment to do what is best for our customers and not their own political or self-serving interests.

For instance, while I respect all members of the commission’s advisory board, a few of them have consistently expressed support of privatization, despite ample evidence that that's not in the best interests of customers. Privatization would remove LIPA’s ability to sell tax-exempt debt and access federal grants, both of which save ratepayers significant money every year. Simply put, privatization would cost customers more money.

As a LIPA trustee and a Long Islander who cares about our region’s future, I hope everyone associated with this process will act in the public interest. I will not prejudge the outcome, but I will be watching closely to make sure the commission gives full consideration to bringing a public power model to Long Island for the first time in our history. I hope you will, too.

This guest essay reflects the views of Stony Brook University Professor Emeritus Nancy Goroff, a member of the LIPA board of trustees.