Groups rally to support fully public LIPA as study projects rate savings

As a coalition of local groups gathered at a closed PSEG customer service center in Seaford Monday to rally in support of a fully public LIPA, a consulting group released a draft report saying the transition could save customers $48 million to $78 million a year.

About a dozen members of the more than 100 groups who gathered in support of the shift to public power said they had sent a letter to Gov. Kathy Hochul urging her to support a transition away from the current model that has PSEG Long Island operating the system under contract to LIPA.

They stood in front of a PSEG service center that has been shuttered since the height of the COVID pandemic, a point one speaker said was emblematic of the need for a locally run utility. PSEG’s parent is based in New Jersey.

“They are shutting off people’s electricity and closing offices like this one we are standing in front of,” said Lisa Tyson, executive director of the Long Island Progressive Coalition, which has led the cause for public power.

“It’s time now to make a big change and we need our elected officials to do it,” Tyson said Monday, a day before public hearings on the issue by the state Legislative Commission on the Future of the Long Island Power Authority were expected to begin.

PSEG, whose contract to run the utility expires in 2025, has opposed the proposed transition to a fully public utility, saying the current public-private partnership has served Long Islanders well.

Business groups have pushed the commission to conduct a broader analysis of future options for LIPA, including continuing with PSEG or selling LIPA outright to a private entity.

Proponents of staying with PSEG say the company has saved ratepayers billions of dollars by avoiding initiatives such as construction of costly new power plants. Proponents of selling the utility say proceeds of sale could be used to pay down debt and set up a fund to help reduce rates.

A draft report released Monday confirmed findings of two previous studies of the potential savings of a fully public LIPA. The commission’s prior consultant, GDS, produced a “conservative” estimate of annual savings of up to $48 million, while a LIPA study said savings could approach $78 million.

Consultant NewGen Strategies & Solutions, a utility industry consulting firm hired by the state commission, estimated savings of up to $78 million, with $23.7 million to $49.9 million available to directly lower customer bills. NewGen said in the most conservative approach, savings would be realized after a year of LIPA's transition to a public entity, although they could occur sooner. 

Each $35 million in savings could lower customer bills by about 1%, Newsday has reported.

The remaining $24.3 million to $28.1 million not used to lower customer bills would be available to invest in the LIPA system, NewGen found. The consultants also found there would be a one-time transition expense of between $16 million and $59 million.

PSEG Long Island, in a statement Monday, said the NewGen report “fails to address” concerns about a “full government takeover of our grid” while “ignoring” PSEG’s top ranking in New York state among overhead utilities. “We look forward to discussing this at the commission hearings Tuesday,” PSEG said.

LIPA, a state authority, already owns the Long Island electric grid.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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