PSEG completes move to migrate some computer systems from N.J. to Long Island

PSEG on Wednesday reported that it had completed LIPA's long-awaited mandate to migrate some of the authority’s computer systems to Long Island from those previously hosted at PSEG’s New Jersey base, at a price tag of $73 million.

The job was begun in 2022 after LIPA demanded a greater degree of autonomy from PSEG following computer system failures and other missteps during Tropical Storm Isaias, when around half LIPA’s 1.1 million customers lost power.

The computer separation project was originally budgeted at $45 million in 2022, but unexpected additional work, missteps and delays stalled the planned 2024 completion by a year, Newsday has reported. About 66 different applications were migrated from New Jersey to Long Island by 350 workers, PSEG Long Island figures showed.

In addition to the $73 million to complete the work, the initiative has an ongoing cost of about $20 million, PSEG reported during a LIPA trustees meeting Wednesday. LIPA chief executive Carrie Meek Gallagher during a board meeting Wednesday expressed a "big sigh of relief that the system separation process is complete.” 

Gallagher's sentiment was echoed by newly named PSEG Long Island president and chief operating officer Scott Jennings, who took the reins this month after former interim president Dave Lyons retired. The company had been without a permanent president since 2022 amid periods of contentiousness between LIPA and its service provider, stemming from the Isaias-related investigations by LIPA and the state that traced many of the problems to the newly installed computer system.

Jennings called the computer separation project "a major investment in dollars and resources and I too am glad that is behind all of us.” LIPA's 1.1 million customers pay all such costs.

One former LIPA trustee who had been an outspoken voice in demanding the computer separation said he was underwhelmed. "It’s been a long time coming and it cost a lot more than it should have," said Drew Biondo, who was replaced on the board last year. 

Gallagher, taking a moment to reflect on 2025 after "reacting to so many things coming at us” during the year, listed PSEG’s much-contested $493 million contract extension among a list of major accomplishments, adding, "We now have surety over what our service provider agreement is going to look like for the next five years.”

The utility’s actions leading to that award have been the subject of several investigations, including pending probe by the state Inspector General, an internal LIPA review and most recently, a review by the Nassau County Comptroller’s office this month.

Questions about the award were heightened after LIPA trustees voted in May against awarding the contract to PSEG rival Quanta Services, despite Quanta receiving higher bidding scores from an internal LIPA committee, and alleged pressure on internal LIPA committee members to lower Quanta’s score on five separate occasions, Newsday has reported.

Quanta last year filed suit to contest the award and two former LIPA officials on that committee, since dismissed by the authority, have filed ethics complaints and papers signaling their intent to sue LIPA over the matter, Newsday has reported. Newsday has also reported the U.S. Attorney’s Office on Long Island has been eyeing the matter after complaints.

Jennings during his remarks at the board meeting pointed to a string of accomplishments by PSEG since taking over the contract from National Grid in 2014, including progressing "from worst to first” in JD Power’s business customer satisfaction survey for large eastern utilities last year. PSEG’s also improving on the residential JD Power survey, moving up to 11th place in 2025, while improving its safety and call center metrics, among others.

But PSEG again in 2025 missed two key LIPA reliability metrics, for the average amount of time customers were collectively out of service and the average frequency of outages. The company also missed the metrics in 2024, and its overall performance on bonus-incentivized LIPA metrics has been spotty, Newsday has reported (if fully met 49% of 62 metrics in 2024, and was on a path to meeting 67% of 2025 metrics as of October).

Jennings acknowledged "There are always areas where we can do better” and indicated PSEG’s priorities for 2025 include keeping a "focus on safety and continuing to improve operating excellence” while focusing on affordability. PSEG, he said, "signed up to keep the 2026 budget flat to 2025,” which has led LIPA to promise lower bills this year. 

But much of that promise is based on LIPA’s projection for lower power supply costs this year, and lower customer usage, even as natural gas prices spike and customers use more energy in extreme cold and heat events. (Newsday reported the power supply charge actually went up this month, likely raising average bills.)

In addition, LIPA's budget predictions for lower costs have faced market challenges. The authority's 2025 year-end financial statement showed its 2025 power supply charge ended the year $212 million higher than budgeted, "primarily due to higher-than-planned natural gas and oil purchases and higher energy market prices.”

Jennings said another big focus will be making sure the LIPA service territory has adequate power sources, while mitigating potential impacts on affordability. The Trump administration has thrown power planning into chaos with its attacks on green energy since taking office last year; Jennings steered clear of political impacts but noted that even the sources LIPA has drawn from undersea cables are changing.

"Neighboring regions that we pull power from,” including Mid-Atlantic and New England grids are themselves "more constrained than ever, so it’s harder to pull that [power] from our neighbors,” Jennings said.

Cables to outside regions supply around 40% of LIPA's power. Meanwhile, "We have an aged generation fleet” of traditional plants providing the remaining 60% on Long Island, "so how we address that will be important to maintaining affordability and reliability,” Jennings said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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