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Cuomo threatens to revoke PSEG, Con Ed operating licenses

Gov. Andrew Cuomo speaks during a news conference

Gov. Andrew Cuomo speaks during a news conference in May in Washington.   Credit: AP/Jacquelyn Martin

Gov. Andrew M. Cuomo is threatening to revoke the state operating licenses of PSEG Long Island and Con Edison, calling out the two utilities for doing what he termed “a lousy job” in the aftermath of Tropical Storm Isaias.

“That’s a technical term — lousy job,” Cuomo said at a Monday briefing. “They were not prepared, and they didn’t anticipate what it would take to get back online quickly, and … there’s nothing new here.”

Cuomo said an ongoing Public Service Commission investigation could lead to fines, restitution or worse for the utilities.

He said he was “as serious as a heart attack. PSEG, you know your franchise can be revoked. And that is a real possibility,” Cuomo said.

PSEG chief operating officer Dan Eichhorn declined to comment on Cuomo’s threat to potentially revoke PSEG’s operating franchise in the state. Eichhorn said PSEG was talking with LIPA about the prospect of compensating customers for lost medicine and food as a result of the outages, though no final plan or decision about compensation has been reached.

Cuomo, who celebrated PSEG’s appointment after superstorm Sandy forced LIPA to find a new grid manager, replacing National Grid, said he was disappointed in the utility's performance.

“It’s not an excuse to say, ‘Oh, well, everyone was stressed and the mutual aid system” for getting additional crews to help restore the outage “was stretched thin. We know that’s going to happen. It’s inevitable and that’s what they’re supposed to be prepared for.”

Cuomo also took issue with the utilities’ communications failures.

“It’s not an excuse to say, ‘We were overwhelmed with calls,’” he said. “Of course you were overwhelmed with calls. That’s what happens after a storm and when power is out.”

Cuomo said he told the Public Service Commission to be “as aggressive as the law will allow, because New Yorkers are fed up. Especially Nassau and areas within the Con Ed jurisdiction. They’re fed up and they’re right.”

PSEG outages were split roughly 50-50 in Nassau and Suffolk, PSEG reported on its online map. Con Edison, which serves New York City and some of its northern suburbs, has also struggled to restore power in the aftermath of the storm.

PSEG Long Island's agreement to operate the regional grid for LIPA is unusual given LIPA's status as a state authority and PSEG's as an investor-owned utility. Unlike all other investor-owned utilities, neither LIPA nor PSEG is under the direct jurisdiction of the PSC, submitting instead to lighter "review and recommend" oversight by the state Department of Public Service.

PSEG has a long-term service contract with LIPA that gives the authority the right to terminate the agreement under certain conditions, including "any failure or refusal" by PSEG to perform "any material obligation" under the contract. PSEG would have the right to "cure such failure," according to the contract, for up to 60 days before LIPA could terminate it.

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