Ratepayers sound off at LIPA hearing on utility's future, PSEG's fate

More than a dozen speakers lined up virtually to weigh in on LIPA's future direction Tuesday, and the consensus was clear: It's time for LIPA to become a fully public power company and terminate its contract with PSEG, most speakers said.

"PSEG can't fix the problem because PSEG is the problem," said Nicolas Shearman, who called on LIPA to terminate the PSEG contract and move forward as a fully public utility. He called the public-private model that LIPA has operated under since 1998 "unreliable, unaccountable and more expensive."

LIPA chief Tom Falcone kicked off the session by reminding customers that PSEG's "sub-par" performance during Tropical Storm Isaias may have been a catalyst for the current review, but that deeper "management failures" at PSEG were discovered after the storm that led LIPA to make longer-term moves to improve the utility.

"It's time for a course correction," Falcone said. He promised ratepayers "better results in the future."

Ratepayers by a large majority favored the notion of a fully public power utility, one that would save upward of $80 million a year in fees paid to PSEG, while becoming "democratic," more nimble in moving toward clean energy and greater customer involvement.

"We need to revamp the entire structure" of the utility, said Laura McKellar of Greenlawn, one that gives communities "a representative seat at the table."

"We do not want another corporation that is ultimately beholden to another group of stock holders," McKellar said.

Falcone noted LIPA has already started the process of weighing potential new service providers by issuing a request for information for new service providers. He said the company has not yet negotiated a suitable contract with PSEG that he felt he could share with ratepayers.

Lisa Tyson, executive director of the Long Island Progressive Coalition, noting that storms are getting worse and "trust in LIPA's public-private partnerships is plummeting," called for "serious structural change now," with a fully public power utility that partners with universities and local organizations to help guide the utility.

It wasn't just PSEG's failure in the storm that irked ratepayers. Heather Clark of Port Washington recounted how PSEG in 2014 "defaced our town" with 80-foot utility poles "without any public input or warning," while "defacing countless trees" with "senseless trimming" for storms. She called for the fully public model to give ratepayers more input into such decisions.

Several of the speakers urged LIPA to forgo the long review process that would be required to hire a new service provider, with several suggesting that a likely bidder like Con Edison would not be an improvement.

Patrick Robbins, organizer at the group New York Energy Democracy Alliance, said the prospect of LIPA choosing another utility like Con Edison is "one of the worst options on the table," as the companies "consistently put profits over people."

"This is a fork in the road," for LIPA, he said, an opportunity to "embrace a utility model that puts people over profits."

But ratepayer George Rathbun urged LIPA to give PSEG "another chance. "As a manager and a father I know that failure is inevitable with people and that's what PSEG is," he said. "I don't think we should end the relationship over one stumble."

Another speaker said LIPA couldn't do better than PSEG.

"From my perspective LIPA has found a gem of a partner in PSEG Long Island," said PSEG Long Island employee Arron Binder, noting that the company "is not perfect all the time, but the company does believe in continuous improvement," and is the "most improved in the nation."

Falcone had earlier noted that PSEG Long Island now ranks 143rd among 144 utilities in customer satisfaction nationally.

Ratepayer Charles Nieves, like many speakers, suggested LIPA should end the PSEG relationship and move on. "How many times do we have to go back to the same well to find out it doesn't work," he said, calling for LIPA to "fully municipalize" and move to a "democratic LIPA." Fred Harrison of Merrick criticized the LIPA board for missing out on millions in savings by delaying the move to a fully public LIPA. "Who would be opposed to expeditiously moving to the municipal option?" he said.

PSEG Long Island, in a statement Tuesday, said it "continues to maintain that a public-private partnership is the best option for Long Island customers and we are proud to operate the LIPA grid on behalf of the people of the State of New York."

PSEG spokeswoman Ashley Chauvin said the company has been "dedicated to improving system reliability and enhancing customer service while being an engaged and responsive community partner.

LIPA for months has been considering four primary options for its future as it continues to scrutinize its relationship with PSEG Long Island in the wake of PSEG’s missteps during Isaias. More than 535,000 customers experienced at least one outage during or up to eight days after the storm, and PSEG was plagued by communication and computer problems that, LIPA found, predated the storm.

PSEG, during a recent LIPA board meeting said the systems are largely fixed and ready for storm season, which starts June 1. LIPA, in a recent report, said customers face "considerable risk" from not just computer system problems but PSEG’s New Jersey-centric management structure and other flaws.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.