PSEG exec says he was sent 'to beat LIPA up,' 2022 correspondence shows

A former high-level PSEG executive adviser who oversaw the New Jersey company’s Long Island operation for three years told LIPA trustees during a 2022 job interview that PSEG management wanted him to "come in here and beat LIPA up," according to correspondence about the matter.

The comments by Rodney Dickens came at a time of heightened acrimony between LIPA and PSEG Long Island in the aftermath of Tropical Storm Isaias, as LIPA’s leaders criticized PSEG for its failings during the storm, according to people familiar with the matter. The two entities had been trying to "reset" their frayed relationship, according to the correspondence.

Much has changed since then. PSEG, despite continuing performance lapses, has more frequently been praised by top LIPA officials and trustees in public meetings, and is negotiating an extension of its soon-to-expire contract.

PSEG is the sole candidate to continue to operate the electric grid for LIPA even though a rival company, Houston-based Quanta Services, scored considerably higher in a yearlong procurement by LIPA, Newsday has reported. LIPA’s board, in an unprecedented move, canceled that bidding process, and embarked on new contract negotiations that have sidelined some of its most senior officials.

LIPA pays PSEG approximately $80 million a year to manage the grid under a contract that expires at year's end.

Dickens’ comment, referenced by LIPA in correspondence between LIPA and PSEG lawyers, contributed to the board’s decision to reject his appointment as president and chief operating officer of PSEG Long Island, despite strong endorsements from PSEG top officials. LIPA as the owner of the grid and contractor had a contractual right to decline PSEG Long Island’s suggested candidate.

Newsday has previously reported that LIPA trustees had rejected Dickens’ appointment to the position in 2022, but the correspondence for the first time sheds light on why and how they made their decision.

PSEG ultimately rescinded the decision to name Dickens the Long Island arm’s president and chief operating officer, and instead named him "executive adviser." That position included high-level responsibilities: to "provide oversight and leadership on Long Island," where he "developed and drove strategy" and supported "all organizational initiatives designed to achieve performance metrics and improve customer satisfaction," according to his PSEG bio.

Dickens, who retired last month, declined to comment. LIPA also declined to comment, and PSEG didn't respond to a request for comment.

The correspondence concerning Dickens' two interviews with LIPA’s board also shows the lengths to which PSEG went to make its case that Dickens was the right man for the job. PSEG raised the prospect of filing for arbitration on the matter, broaching the prospect of a third-party review and ruling to make its case for Dickens. Newsday reviewed copies of the correspondence.

Dickens’ comment was only one of the board’s concerns. LIPA took exception to PSEG’s claim that Dickens had "robust knowledge" of certain PSEG Long Island operations, saying "at no time was such knowledge demonstrated during the four hours of interviews" with LIPA trustees and executives, according to LIPA's correspondence. He also allegedly provided "unsatisfactory answers" to questions about establishing an incident command center after an outage, the letter stated. "LIPA expects that candidates for c-suite level positions would be prepared in an interview to answer questions describing the major risks of implementing a Customer Information System, for example," LIPA's letter states.

In an April 28, 2022, response to LIPA, Andrea Elder-Howell, PSEG vice president of legal service, called LIPA’s rejection of Dickens "unreasonable," and asked the authority to "withdraw its rejection promptly."

Elder-Howell pointed to endorsements of Dickens by PSEG’s top officials as showing he was "beyond qualified," given his past high-level roles at PSEG and as president of Allegheny Power. She refuted the reasons LIPA asserted — that Dickens "did not provide substantive answers to specific questions" — by saying, "no one in his specific position would be expected to answer at that time," prior to any tenure with LIPA.

She also said it was "unreasonable" to expect Dickens "to converse at an in-depth level about the specifics of ... a complex Customer Information System."

LIPA also questioned Dickens on his views of the long list of performance metrics that PSEG must meet to receive more than $20 million in annual compensation. PSEG's lawyer pushed back on LIPA claims that Dickens viewed LIPA’s list of 96 new performance metrics as "paper exercises and busy work," noting he stated it was "important to prioritize the most critical metrics ..."

Concerning the "beat LIPA up" comment, Elder-Howell wrote that Dickens' statements generally were made in a "nonpublic setting" and that Dickens was "not expected to provide answers intended for the public during this meeting." She wrote he was "keenly aware of the difference between private and public statements and has significant experience navigating public statements."

LIPA didn't back down, writing in an April 29, 2022, letter that Dickens’ comment did little to indicate PSEG was "truly committed to resetting the relationship" between the two entities, which had soured following the tropical storm and revelations during task-force investigations into it.

LIPA officials and trustees pushed publicly for widespread changes after the storm, which saw some 650,000 outages and communications and computer breakdowns, among other problems. LIPA also alleged PSEG misled it on matters related to the timing of a computer system upgrade prior to the storm, charges PSEG has pushed back on.

The 2022 letter from LIPA general counsel Bobbi O’Connor said a "better way of demonstrating that commitment [to repairing their frayed relationship] would be to accept your client’s [LIPA] decision to reasonably withhold its approval of Mr. Dickens, and to move forward to identify a candidate that addresses our concerns so that LIPA can reasonably approve that candidate."

PSEG ultimately did file for arbitration on the matter, but dropped it and soon appointed Dickens as "executive adviser" overseeing Long Island. PSEG has still not filled the permanent position of president and chief operating officer. David Lyons, executive director for special projects for PSEG Long Island, has been filling the president and chief operating role on an interim basis. His annual compensation for 2024 was just over $837,000, Newsday has reported.

At the same time, most of the LIPA executives and board members who raised private and public concerns about PSEG have either resigned or been replaced in the wake of Gov. Kathy Hochul’s appointment of a new slate of trustees. The state Inspector General is investigating the utility and this summer interviewed at least one person close to the procurement who has initiated an ethics complaint tied to alleged irregularities around the process, according to two people briefed on the matter.