PSEG spent $18.2M preparing for second storm that never arrived

PSEG Long Island in August faced the prospect of a second major storm in the wake of Tropical Storm Isaias and spent $18.2 million getting ready, but Hurricane Laura largely skirted the region.

The Trump administration's declaration Friday that New York was a major disaster area after Isaias provides a measure of relief for Long Island ratepayers, who would otherwise have been on the hook for all of that storm's more than $300 million in restoration costs. But the declaration won’t help with the $18.2 million tab for Laura.

LIPA and PSEG Long Island racked up over $313 million in costs related to restoring power after Isaias, including hiring thousands of outside crews and paying for their meals and hotels, as well as equipment such as poles and electric lines. With the disaster declaration, the Federal Emergency Management Agency can reimburse LIPA for up to 75% of those costs, or around $234 million. Previously, the agency paid the bulk of the costs for restoration after superstorm Sandy.

LIPA last month announced that it would seek more than $350 million in medium-term bridge loans to help cover costs and potentially fund costs for any new storms that hit between now and the up to two years it could take FEMA to process and approve the claims.

PSEG Long Island’s response to Isaias has been heavily criticized after its outage management computer system and telecom lines were overwhelmed and failed in the hours after the storm, hindering efforts to get outside crews to work locations and tell customers when power would be restored. The company operates the Long Island electric grid under a contract to LIPA.

In the weeks after Isaias, PSEG was tracking a possible impact from another storm, Hurricane Laura, which hit the Gulf Coast and made its way toward the eastern seaboard. The storm largely missed Long Island, but by then PSEG had already made extensive plans to hire outside crews and put other measures in place. The bill for that storm prep: $25 million, Richard Tinelli, a PSEG manager, told LIPA trustees at a committee meeting last week.

PSEG spokeswoman Ashley Chauvin on Tuesday called that storm cost a "high-level estimate" that has since been lowered to $18.2 million.

"We got the forecast Hurricane Laura would hit our service territory late in August," Tinelli said, "so we began to prep up and staff up to basically respond to that storm. And that storm did not materialize. So basically we have about $25 million of costs in our base [operations and maintenance budget] related to those prep costs."

LIPA, in a statement about the preparations for Laura, said, "PSEG Long Island plans and prepares for storms accordingly, and sometimes they don’t happen. This could have happened with Tropical Storm Isaias, too."

LIPA has been criticized before for heavy storm preparation for storms that fizzled out. In 2010, LIPA spent some $30 million preparing for Hurricane Earl, which barely reached the East End of Long Island before dispersing. LIPA had amassed 1,600 off-island workers, hundreds of trucks and tons of equipment at staging areas across the island in advance of the storm.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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