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PSEG gets extra $9.23M from ratepayers for hitting incentive

PSEG Long Island will receive $9.23 million in extra incentive pay from Long Island ratepayers for hitting 23 of 25 performance goals in 2016, even while missing two key measures of outage duration and frequency.

LIPA in a report said PSEG could have earned a total of $9.32 million had it hit all performance targets. PSEG argued, as it did in previous years, that score overages in other categories should be allowed to be used for underperformance in others, the report said. Newsday has previously reported PSEG was in danger of falling short of the outage metrics.

PSEG under its long-term LIPA contract earns $58 million annually but also has the ability to earn the extra incentive pay based on performance. On a point basis, PSEG earned 118.75 of a total 120 points for 2016. The company earned no points in the outage duration and frequency metric, one that is considered critical to customers.

The average duration of customer outages last year 2016 was 75.5 minutes, well above the target 68.5 minutes. The average outage frequency, the number who experienced an outage compared to LIPA’s total customer base, was 1.11, compared with a target of 0.92 customers impacted.

PSEG spokesman Jeff Weir said the $9.23 million in pay is “reflective of all the work PSEG Long Island has done to meet the operational performance targets.”

In a state filing, LIPA requested to keep confidential documents showing how PSEG plans to correct the outage metrics it missed. It argued that the document “contains information regarding PSEG’s maintenance projects that if disclosed could impair current or imminent contract award to prospective vendors.” It’s among several other documents excluded from the report.

In its report, LIPA said it found “several deficient processes” that led to recommendations in four general categories — process, data, people and system — but didn’t elaborate.

PSEG in its own calculation provided in LIPA documents, said overages in some categories should have allowed it to receive $11.2 million, but its agreement with LIPA caps payments at $9.32 million.

On the JD Power residential customer satisfaction survey, PSEG earned 610 points of a potential 1,000. LIPA’s target was 588. Business satisfaction was 689, well above the LIPA-targeted 602.

Last year PSEG answered 3,418,872 customer calls. Most, 1,711,381, were answered by an automated voice answering system, while 1,522,180 were answered by a call-center representative. The balance were answered by an outside vendor. PSEG’s average answer time was 23.57 seconds, compared with the target of 53 seconds.

The state Department of Public Service, which has review and recommend authority over LIPA and PSEG but no formal jurisdiction, concurred with LIPA’s assessment of the incentive pay.

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