State commission members hear support for making LIPA a fully public power authority

There was overwhelming support for the idea of transforming the Long Island Power Authority into a fully public power authority at a hearing conducted by the State Legislature’s LIPA Commission at Southampton Town Hall on Friday.

State Assembly Member Fred Thiele, who co-chairs the commission with Senator Keith Thomas of Nassau County, explained at the top of the hearing, which was attended by about 35 people, that when the State Legislature created LIPA in 1986, it had two goals in mind. The first was for it to oversee the dismantling of the Shoreham Nuclear Power Plant. The second was for it to become a public authority to replace the Long Island Lighting Company.

“Ultimately LIPA did replace LILCO, but was never a full public power authority,” Thiele said. “It has always been governed by a third-party manager,” from KeySpan to National Grid, and now, PSEG LI. “It’s the only third-party manager system in the country,” Thiele said.

Besides saving an estimated $70 million to $80 million a year, a public power authority would be expected to provide better responses to power outages caused by major storms.

It was PSEG’s lackluster response when tropical storm Isaias hit in 2020 and about 500,000 customers lost power and the company was criticized for its failure to communicate, that the legislature decided to create a commission to study converting LIPA to a public model, Thiele said.

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 commission has held five hearings and will issue a draft report before holding a second series of hearings, Thiele said. 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, including the Dec. 31 deadline for submitting its draft report to the legislature. Thiele said in an interview last week the commission is “still working with a timeline to meet the April 1 deadline for the final report, although it’s tight. “It’s more important to get it right,” he said.

State Senator Anthony Palumbo, who represents the North Fork and the north shore west to Stony Brook, said the commission’s goal was to reach consensus on a workable plan.

“We are going to be a commission of action,” he said, noting that the commission is made up of legislators, who will be able to vote on their study’s conclusions.

A mix of speakers addressed the commission. Assembly Member Jodi Giglio, who represents the Second Assembly District, called for LIPA to be more transparent about where it plans to site renewable energy systems, from solar panels to battery storage units. She said the authority needs to strength its power system to reduce the length and breadth of power outages, and she said the authority should be required “to pay every ratepayer in order to make up for their loss of power and refill their refrigerators” after outages. Finally, she called for the creation of an advisory council to weigh in on proposed rate increases.

Suffolk County Legislator Bridget Fleming said the time had come to abandon LIPA’s current configuration and “bring it in line with the best practices for utilities around the country and across the globe.”

She said it was essential for Long Island’s economic future for it to have a source of reliable and affordable power and added that progress needed to be made on providing customers with sustainable, renewable power.

Panelists asked Fleming how she thought a public LIPA should be governed, with commission member Assemblyman Doug Smith, asking her if she thought the Suffolk and Nassau county legislatures could be appointed to oversee LIPA.

“County legislators have many things to focus on,” she said, adding that she would prefer to see a governing body made of people who have local ties but have some level of expertise.

Southampton Town Council Member Tommy John Schiavoni also spoke in favor of a public LIPA. The current system is inefficient, and a public authority would save on administrative costs, provide greater transparency, and provide customers with a wider choice of power options, including access to renewables. He described the Long Island power market as a monopoly. “I believe that monopoly is ours, as the people of Long Island,” he said.

Lynn Arthur of Southampton, the founder of Peak Power Long Island, a not-for-profit that works with municipalities to encourage the use of sustainable power, also spoke in favor of reforming LIPA.

She cited a 2015 state initiative to reduce fossil fuel generated power consumption on Long Island by switching to sustainables or encouraging reductions in use. A company called Applied Energy Group won a contract to implement what is called a demand-response system, by which participants would agree to have their thermostats turned up a few degrees to cut demand during peak periods. In 2019, AEG had only achieved 70 percent of its goal, but rather than penalize it or end its contract, PSEG LI allowed the company to contract with commercial customers who owned conventional generators to help close the power gap.

She added that when complaints were raised with LIPA and PSEG, they were unresponsive and cited other examples of their failure to provide a level playing field for sustainable power.

Several other speakers also supported the idea of transforming LIPA into a public authority, except Kevin Schrage, the final speaker of the day.

An electrical contractor, Schrage cautioned against the public model, saying the private sector would be better suited to improve results. Rather than having government officials run the operation, he said a company staffed with utility professionals would be more responsive.

“These are the guys that get it done,” he said of the private sector. “And they operate under the gun. They are supposed to turn a profit. Otherwise, their shareholders will fire them. Government doesn’t quite seem to have the same urgency about it.”

Editor’s note: This article first appeared on 27East.com. It is republished here with permission.