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PSEG to get $5.47M performance bonus, seeking more

PSEG Long Island trucks leave a service yard

PSEG Long Island trucks leave a service yard on Jan. 1, 2014. Photo Credit: Newsday / J. Conrad Williams Jr.

PSEG Long Island will receive at least $5.47 million in performance-incentive pay for 2014 in addition to its $45 million annual management fee, but the utility is pressing for a bigger bonus.

Under terms of a contract negotiated as part of Gov. Andrew M. Cuomo's LIPA Reform Act, PSEG is eligible for the bonus if it meets 20 different service metrics. PSEG last year met 19 of the 20, falling below in one measure of worker safety.

Documents filed with the state Department of Public Service say PSEG is arguing that excess points earned in other categories should be applied to the one in which it fell short. The request would result in a bonus payment of $5.76 million -- $288,417 more than LIPA believes it should pay.

"PSEG asserts that a higher score in one performance category can be utilized to compensate for deficiencies in other categories," DPS chief executive Audrey Zibelman wrote in a Monday letter to LIPA chairman Ralph Suozzi. "LIPA does not agree and asserts that points can only be utilized within individual categories."

Zibelman in her note said her office "concurs" with LIPA's view.

Measures for the performance payment include average speed to answer phone calls, timely billing and customer satisfaction, among other measures. Under the LIPA/PSEG contract, the incentive payment is scheduled to increase next year, to $8.7 million, while PSEG's management fee is also scheduled to increase, to $73 million.

PSEG spokeswoman Kathy Fitzgerald declined to comment on the disagreement, but said the company was "proud" of its performance. "We continue to strive to improve on all of these metrics to fulfill our goal to provide our customers with the first-class utility they deserve," she said.

LIPA declined to comment.

One ratepayer who has been battling PSEG over billing said she was "horrified and astonished" that PSEG was receiving any bonus at all.

"They are very, very frustrating to deal with," said Patricia Hickey of East Setauket, who last year received a $2,173.33 bill for past charges after PSEG reconciled a year of estimated bills because of a broken meter. The new charge was based on her historical usage, not actual usage.

PSEG's Fitzgerald, noting customer satisfaction has improved under PSEG, said, "We're sorry that this individual customer is unhappy and will look into the matter further. But we're working hard to make progress in overall customer satisfaction."

Terms of PSEG's contract with LIPA on the incentive payment are lengthy and complex. An appendix on the plan runs 87 pages, and is replete with formulas, definitions and contingencies. The contact says PSEG is eligible for the payments, and may be assessed penalties for falling short of the metrics.


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