A joint crew comprised of PSEG and contractors work on...

A joint crew comprised of PSEG and contractors work on downed powerlines along Bread and Cheese Hollow Rd. in Fort Salonga after a tree knocked them out following tropical storm Isaias, Thursday, Aug. 6, 2020. Credit: Newsday/Steve Pfost

Two Long Island lawmakers have pointed to an ongoing inquiry of PSEG Long Island by the state attorney general in asking LIPA to delay any vote on a newly reached contract with the New Jersey energy company until the probe concludes.

In a letter sent to LIPA trustees Wednesday, state Sen. Jim Gaughran (D-Northport) and Assemb. Fred Thiele (I-Sag Harbor), noted that Attorney General Letitia James opened a wide-ranging probe of PSEG in the aftermath of the company’s failed response to Tropical Storm Isaias in 2020. The lawmakers urged the LIPA board to delay voting and "suspend this [contract] process until the Attorney General finishes her investigation into whether PSEG-LI’s failed storm response broke state laws."

PSEG Long Island spokeswoman Ashley Chauvin said the company "continues to cooperate with the New York State’s Office of the Attorney General. Due to the ongoing inquiry, we are unable to comment further."

AG spokesman Morgan Rubin said, "We’re going to decline comment for now."

The probe, first reported in Newsday in August 2020, disclosed the attorney general’s inquiry was attempting to determine "whether violations of state law have occurred" in the PSEG’s storm response, which left 535,000 customers without power as its computer and communications systems collapsed.

PSEG at the time confirmed receiving an inquiry letter from James’ office, and said, "We will cooperate with the investigation."

As Newsday reported, the probe sought among other things documents relating to its "actual or projected ability to provide electric services" to customers, including reliability and emergency preparedness reports, as well as information on strategic storm response and emergency restoration policies." PSEG had until early September 2020 to supply the documents, according to a copy of the attorney general's letter obtained by Newsday.

In a letter Thursday in response to the lawmakers' request, LIPA chief executive Tom Falcone said, "I share your concerns."

Falcone noted a recent attorney general investigation of National Grid’s contract management that resulted in the return of $4 million to LIPA, and said the authority would "fully cooperate" in the office’s inquiry.

But he also noted that LIPA and the state Department of Public Service have conducted their own probes of PSEG’s failings and the results were "unflattering," including a finding that PSEG was "not candid" with LIPA about problems before, during and after the storm.

Falcone noted the new contract agreement, reached on Tuesday, addresses many problems uncovered in the storm’s aftermath, including new rights to limit PSEG’s pay and even terminate the contract, which would conclude in 2025. Thiele and Gaughran are crafting legislation that would conduct a review of the prospect of a fully public LIPA.

Falcone said the new contract has real benefits for customers while delaying it has "costs and no benefits."

But the lawmakers suggested the prospect of additional findings was reason enough to wait. They accused PSEG of displaying a "complete and total lack of urgency with storm preparedness and in fixing fundamental problems with its systems, including a still-unusable outage management system nearly 15 months" after it first failed.

PSEG has been working to upgrade its outage-management system, and LIPA’s new contract requires achieving numerous milestones in terms of hiring computer system managers and cybersecurity chief, and in-house improvements of information technology.

PSEG’s predecessor, National Grid, formerly had a staff of 12 IT specialists before PSEG decided in 2015 to outsource the department to Tatta Consulting Services in India, saving $2 million annually.

Peter Schlussler, an IT expert and former member of the Suffolk Legislature’s LIPA Oversight Committee, said delays in getting the new computer system up and running could be problematic for LIPA. PSEG has missed several milestones to have the new system operating this year, relying instead on an older, outdated one. PSEG has said there’s a chance it may not be ready by year’s end, and Schlussler indicated it may take until the third week of January.

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