LIPA vote on grid firm expected Thursday

Long Island Power Authority trustees Thursday are expected to vote on which of three companies -- PSEG, Con Edison or National Grid -- will be awarded the $2 billion-plus contract to run the local electric grid for the next decade.

It's a pivotal time for LIPA, which in coming weeks also faces the prospect of newly written legislation that would mandate regular and comprehensive state audits and outside oversight of customers who complain about service.

"LIPA needs oversight," Gov. Andrew M. Cuomo said on Long Island Wednesday, referring to Tuesday's Newsday report of pending legislation. "We're trying to figure out the best way to do it." A spokesman declined to comment on the prospect of a new company to operate the grid.

Market sources have been speculating for months about which of the three private utility companies would be awarded the 10-year contract. Trustees were initially scheduled to make the announcement in October but delayed it. Neither the three companies, LIPA nor its trustees would comment Wednesday. PSEG, based in Newark, has been considered a front-runner, but no officials would confirm that status.

LIPA staff will make a recommendation to trustees, who in October approved a new operating structure for the authority that will be overseen by one of the three companies starting in 2014.

PSEG, with $11.7 billion in annual revenue, is the parent company of several energy-related entities with interests in nuclear, coal and oil-fired power plants, solar energy, transmission and distribution systems and a regulated utility, PSE&G, which serves 2.2 million electric customers in New Jersey.

The 108-year-old, publicly traded company is considered a leader in solar and renewable energy and is working with Deepwater Wind on an offshore wind project off the New Jersey coast. It has more than 10,000 employees.

In a J.D. Power and Associates' 2011 residential customer satisfaction study, PSE&G dropped to 10th place among 18 large eastern electric utilities, from third place in 2010. In the same 2011 survey, LIPA moved to 16th place from 17th, while National Grid went from 14th in 2010 to 13th in 2011. (National Grid's ranking is for its non-Long Island service area throughout the Northeast and upstate New York.)

If it wins the bidding, PSEG and its PSEG Energy Holdings subsidiary will work with Lockheed Martin to manage the Long Island grid, said spokesman Paul Rosengren. PSE&G, the subsidiary operating a regulated utility in New Jersey, would not.

The contract has been held by National Grid, and its predecessor, KeySpan, since 1998, when LIPA was formed.

National Grid, based in London, has gas and electric holdings in the United Kingdom and throughout the Northeast, including upstate New York, and operates the Long Island natural gas supply service.A National Grid spokeswoman could not be reached.