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Vote on new LIPA-PSEG contract not expected before October

LIPA trustees will have to wait until at least October to vote on a potential new contract with PSEG Long Island, as negotiations for a final pact continue and Gov. Kathy Hochul weighs in.

Asked Wednesday if the governor would ask for a suspension of contract talks between PSEG and LIPA while state lawmakers contemplate legislation to fully municipalize LIPA, a Hochul spokeswoman reiterated her previous statement that the new governor is "committed to ensuring the best path forward" for Long Island utility customers.

In a sign that Hochul may want talks between the two to move forward, spokeswoman Haley Viccaro added, "This includes making sure the revised contract between LIPA and PSEG Long Island improves operations, accountability, transparency and customer service."

When LIPA trustees do take up the matter, there will be two new trustees to weigh in. Sources say former congressional candidate Nancy Goroff, a chemistry professor at Stony Brook University, and Valerie Anderson Campbell, an executive recruiter and financial services professional, will be named to the board this week.

LIPA on Wednesday declined to characterize the progress of negotiations with PSEG, after LIPA trustees last month blasted PSEG officials for acting too slowly to respond to LIPA’s initial contract offer. As Newsday reported, the contract talks were spurred by an eleventh-hour phone call from former Gov. Andrew M. Cuomo to top PSEG officials in New Jersey, with an ultimatum to either take LIPA’s terms or lose the contract.

PSEG returned its comments on LIPA’s initial contract offer more than a week ago, and LIPA must now either make counter comments or hammer out a contract.

In a statement, LIPA said there won't be enough time needed to do that and to make good on its commitment to Assemb. Fred Thiele (I-Sag Harbor) to allow for a 30-day public review of the contract before LIPA’s Sept. 22 trustees meeting.

"Given the 30-day review period that we committed to during the State Assembly hearing in August to ensure continued transparency and public engagement, we won’t make the scheduled September Board meeting," LIPA said in a statement. "We will see when we conclude negotiations what makes sense in terms of board review."

Thiele said while it's "still likely a revised contract will be approved," he's working on legislation to fully municipalize LIPA. He said he's working to draft the full public power bill in the fall "for action in the 2022 session."

If trustees approve the new contract, it would become effective only after it’s reviewed by the state attorney general and comptroller — reviews that themselves could take months. LIPA will operate under its existing contract with PSEG until final approval, a LIPA spokeswoman said.

Thiele said the 30-day review period is "critical to assess and amend the revised contract if it has a poison pill with regard to public power."

The existing contract puts only about $10 million of PSEG pay "at risk" of loss for failure to meet performance metrics, compared with $40 million in the proposed contract. The proposed contract also provides for more autonomy for the PSEG Long Island operation from its New Jersey parent, more computer technology hires and cash payments to cover costs of overhauling computer systems. In return, LIPA would drop its $70 million breach of contract suit against PSEG.

PSEG spokeswoman Ashley Chauvin said the company "is eager to reach an agreement and has offered to dedicate the necessary time and resources to accomplish this objective."

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