LIPA is in the second stage of a request for hundreds of millions of dollars in federal grant money to continue a decadelong effort to harden the electric system in the aftermath of tropical storms.
LIPA last month said it was working with the Federal Emergency Management Agency to secure more $400 million in new grants to harden the system following Tropical Storm Isaias.
The proposal includes new money to buy and install equipment that will help the utility isolate outages to smaller areas of the grid. The so-called sectionalizers allow the utility to essentially cordon off small areas of the grid where damage has occurred, to limit the impact to the fewest customers possible.
FEMA has a judicious process to vet such requests and the amount LIPA receives may be less than requested, officials noted.
In response to LIPA's request for $426 million, FEMA has asked for documentation and engineering reports to justify the grants. The utility said it plans to hire an outside firm to comply with a FEMA request and submit the paperwork by year’s end
The funding for post-Isaias storm hardening is in addition to the approximately $275 million LIPA received in reimbursements from FEMA to help restore the system following that 2020 storm, which caused more than 500,000 outages.
If approved, the storm-hardening grant would mark the second big federal subsidy LIPA has received following a recent storm and further justify the utility’s decision to eschew privatization in favor of remaining a public utility. LIPA in the aftermath of Superstorm Sandy received $729 million in storm-hardening grants from FEMA, in addition to more than $700 million in reimbursement funds to restore power immediately following the storm. Investor-owned utilities are not eligible for the grants and must pay for such upgrades through rate increases.
Hope for the latest FEMA grant comes as the State Legislature studies the prospect of a fully public LIPA by the time PSEG’s contract to manage the grid expires by 2025. The commission, co-chaired by Assemb. Fred Thiele (D-Sag Harbor) and Sen. Kevin Thomas (D-Levittown), is working to form an outside advisory panel of local stakeholders and to prepare a draft report on full municipalization by the end of this year.
Former Gov. Andrew M. Cuomo in the aftermath of Superstorm Sandy formed a Moreland Commission to study future structures for LIPA that favored privatization — until the prospect of losing federal grant money was fully examined. It’s one reason LIPA retained its current public-private model, though a fully public LIPA could save an additional $80 million a year, studies have said