State’s ‘future of LIPA’ commission to hold public hearing on the East End Friday

The State Legislature’s LIPA Commission will hold a public hearing on Friday, Jan. 20 at 11 a.m. at Southampton Town Hall.

The commission, formally known as the the Legislative Commission on the Future of the Long Island Power Authority, was established by state law last year to develop and present to the legislature “an action plan for implementing a true public power model for residents of Long Island and the Rockaways.”

The goal is to save millions of dollars in annual management fees paid to an outside utility, establish greater transparency and clearer lines of accountability, and give LIPA’s customers a greater say in how this electrical service is provided, according to the commission’s website.

The commission is co-chaired by First District Assembly Member Fred Thiele (D-Sag Harbor) and Sixth District State Senator Kevin Thomas (D-Levittown). Thomas is chairperson of the senate’s consumer protection committee. Thiele has long been an advocate of LIPA reform and making LIPA a true public authority.

“In 1986, when LIPA was created, the vision of its sponsors was not the current ‘Rube Goldberg cartoon’ organizational chart,” Thiele wrote in an August 2020 guest column. “Rather, the vision was to elect a LIPA board responsible to Long Islanders and to create a public power company to replace Long Island’s unaccountable, profit-driven, private utility, LILCO).”

LIPA was created by state legislation in 1986 in response to the decision by the Long Island Lighting Company to pursue construction of the Shoreham nuclear power plant, with the State Legislature found “imprudent.” LIPA was charged with closing and decommissioning the plant, which was accomplished in 1994.

LIPA replaced LILCO as the electric company for the Long Island/Rockaways service area in 1995, but was never established as a true “publicly owned power authority” as originally envisioned by the State Legislature and expressed in the 1986 statute.

Instead, LIPA has opted for a third-party management model, contracting with a private, investor-owned company to fulfill its responsibility to manage the utility.

Since 2013, LIPA has contracted with PSEG-LI, a subsidiary of Public Service Enterprise Group, to manage its electrical system. It previously contracted with KeySpan/National Grid.

“LIPA is the only utility in the nation that is operated under a third-party management model,” the legislation establishing the LIPA commission states. “This model has repeatedly failed its customers. There has been a lack of transparency, oversight, and accountability. This failure has been most dramatically evidenced in the unacceptable storm response by LIPA and its third-party contractors during Superstorm Sandy in 2012 and Tropical Storm Isaias in 2020,” according to the legislation.

A true public power model would create management efficiencies and save ratepayer money, according to the legislation establishing the commission.

LIPA’s Chief Executive Office Thomas Falcone testified at both the Nov. 29 hearing in Nassau and at the Dec. 15 hearing in Hauppauge. Falcone outlines steps LIPA has taken to improve efficiencies and performance, including revisions of its contract with PSEG-LI and infrastructure investments over the past decade. The text of Falcone’s full testimony is available on the commission’s website: Nov. 29 and Dec. 15.

The legislation requires the commission to make a report to the State Legislature by April 1, recommending specific actions, legislation and the timeline necessary to restructure LIPA into a true publicly owned power authority. However, the commission has already missed key deadlines spelled out in the legislation. It was to hold at least one public hearing in each of the three counties comprising the service area served by LIPA by Sept. 30. The commission didn’t hold its first public hearing until Nov. 29. It was to submit a draft report to the legislature by Dec. 31. It is also required by the legislation to hold public hearings on the draft report in each of the three counties comprising LIPA’s service area by Feb. 15.

“We are still working with a timeline to meet the April 1 deadline for the final report, although it’s tight,” Thiele said today. “It’s more important to get it right. If it ends up taking a few weeks extra, there are no real consequences for implementing the report,” he said. “The legislature is in recess April 1-16 anyway. We also want to make sure there is enough time for the public to participate and comment.”

Thiele said he and former Sen. Jim Gaughran, who co-sponsored the commission legislation, were going to co-chair the commission. Gaughran’s decision not to seek re-election in November delayed the appointment of commission co-chairs until the end of July, Thiele said.

“We’ve been working hard making up time ever since. I’m confident we will have a good product for the reform of LIPA,” Thiele said.

The East End hearing on Friday is the fifth public hearing to be held by the commission, which held its first hearing in Nassau County on Nov. 29, followed by a virtual hearing that evening. The commission also held in-person public hearings in Far Rockaway and in Hauppauge. Archived videos of all hearings to date may be accessed here.

Friday’s hearing will be streamed live at https://totalwebcasting.com/live/nylipa.

Testimony will be taken in person at Friday’s hearing or in writing, submitted at nylipa.gov/public-input.

Editor’s note: this article has been amended to correct the misidentification of the entity that pursued construction of the Shoreham nuclear power plant.