PSEG officials to meet to discuss frustration with LIPA

Officials from PSEG Long Island are scheduled to meet with top state energy regulators in Manhattan Thursday to discuss the company's frustration with elements of its relationship with LIPA, sources said.

The meeting with PSEG officials, including PSEG Long Island president Dave Daly, is scheduled to include state Public Service Commission chairwoman Audrey Zibelman and state energy czar Richard Kaufman, the sources said.

Among the issues expected to be addressed are PSEG's difficulties in getting LIPA to approve plans that conform to a state mandate known as Reforming the Energy Vision, the sources said.

Since 2014, PSEG has presented at least two major plans that called for hundreds of millions of dollars in green energy and demand reduction projects. While the projects would pay for themselves through demand reduction, they were shelved after review by LIPA and the state.

LIPA officials are not expected to attend the meeting, according to people briefed on it. Officials for LIPA, PSEG and the state were not available for comment Wednesday.

Differences between PSEG and LIPA arose late in the recent state rate-hike proceeding. PSEG held to its position that it needed $387 million in new revenue over the next three years to meet increasing performance standards. LIPA, which originally sided with PSEG's initial request for $441 million, ultimately sided with a state recommendation that lowered the amount to $325.4 million.

PSEG more recently has sought approval to shift funding between LIPA's capital and operations budgets in ways it believes would improve service to customers. Sources said LIPA objected.

Another issue slated to be discussed at the meeting Thursday is whether, and how, PSEG can earn additional revenue on projects it creates, funds and manages on LIPA's behalf. PSEG is said to believe its contract with LIPA explicitly provides for such opportunities, but LIPA disagrees, according to sources.

PSEG also was stymied in its efforts to get LIPA to approve funding for a communications system for a smart-meter project that was recommended by the state.

PSEG, as part of a state-approved rate-hike proposal, had sought permission to install about 180,000 smart meters over the next three years. The Department of Public Service recommended that PSEG for now build the communications portion of the system, which sends customer usage data wirelessly back to the utility. LIPA has rejected the plan, a source said.

More recently, the sources said, LIPA gave thumbs-down to a PSEG proposal to continue an on-bill financing option for solar rooftop installations that would help replace a state-backed program which in February and April will see rates jump for all but low- to moderate-income customers. PSEG would have been able to earn revenue from fees to banks on the program, which it proposed sharing with LIPA on behalf of customers, the sources said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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