As it worked to keep pace with a stormy winter season, PSEG Long Island was able to take advantage of something few utilities in the state or nation can: a federally funded force of hundreds of workers ready to respond.
After the devastation of superstorm Sandy, LIPA received hundreds of millions of dollars in federal aid to help harden the system in preparation for the next big storm.
The readily available workforce has helped PSEG quicken response times to outages, and cut costs associated with paying for crews to travel from faraway states. But what will happen to PSEG’s increasing customer satisfaction levels when this force finishes its work, likely in summer 2019?
The Federal Emergency Management Agency approved the request, granting $730 million — in addition to another $700 million to pay for Sandy-related repairs — to reinforce the system with thicker, storm-resistant poles and wires, raise substations and implement new technology to help isolate outages.
Around 260 workers have been on the job since 2015, living on Long Island and working like an army from town to town. They’ve also been at PSEG’s beck and call to respond to storms since that time.
While they are here primarily to do the federally funded work, they can be called upon when PSEG is preparing for, and responding to, big storms. It’s a huge advantage, both in cost and time in responding to a storm; other utilities must call in workers, sometimes from faraway states, and pay their travel expenses to get here when big storms threaten.
PSEG, which operates the system under a 12-year contract for LIPA, pays the workers from a separate storm budget funded by Long Island ratepayers when they go to work responding to an immediate repair.
But the workers help PSEG respond quicker to storms and have been partly responsible for the utility’s generally high marks in responding to storms.
“It’s better for the customers because they’re here,” said Daniel Eichhorn, president and chief operating officer of PSEG, in an interview last month. “We can swing them from doing FEMA work to storm restoration work on the same day. It keeps our costs lower [because] we’re not getting crews from out of state that maybe have a day’s worth of travel time before they even get here to do work.”
Few other utilities can take advantage of such an arrangement. Only public utilities such as LIPA are eligible for federal funding to reimburse storm costs or pay for storm hardening. Investor-owned utilities such as Con Edison or PSEG Long Island’s sister company, PSE&G in New Jersey, must fund such repairs and grid-infrastructure investments through state-approved rate increases.
When Gov. Andrew M. Cuomo first began exploring ideas for overhauling LIPA in 2013, he initially called for privatizing LIPA. The concept was immediately criticized by those who understood the advantage of public ownership, and the federal funds available to it. The LIPA-PSEG arrangement gives the utility the best of both worlds: tax exemptions and federal reimbursements of a public utility, with an investor-owned utility operating the grid. (PSEG and LIPA also are not subject to formal Public Service Commission jurisdiction, a fact state lawmakers continue to decry.)
PSEG has an internal force of 379 overhead and underground line workers to handle the day-to-day task of maintaining the system and responding to storms when they arrive, Eichhorn said. When storms hit, PSEG also can deputize 103 low-voltage-electric personnel and 203 internal employees to do damage assessment during storms. The utility also has regular access to 60 to 120 on-Island contractors to help in repairs.
The FEMA force of 262 workers hasn’t always been available. Last year, after Puerto Rico was devastated by Hurricane Maria, Cuomo requested that utilities across the state offer workers to that island to help in slow-moving repairs. That resulted not only in 10 PSEG workers heading south, but also around 40 contractors from the federal work. Some were not here to respond to the recent nor’easters.
Cuomo has directed the state Department of Public Service to investigate utility preparedness for recent winter storms, given hundreds of thousands of outages across the state. PSEG was among the six major utility companies to receive a letter requesting documentation about preparedness.
But what will happen when the FEMA workers leave? PSEG’s customer satisfaction scores have steadily increased since taking over the system in 2014 — a low point after the dismal response from Sandy — and power quality has been an important part of that improvement. Eichhorn said the utility is keenly aware of the advantage the workers have provided, and is making preparations for when they are gone, likely by summer 2019 — the height of storm season.
“Yes, we’re looking at that,” he said. “We’re looking at our mix of contractors that we use versus employees and what will happen when the FEMA crews leave. It’s definitely good to have.”
One expectation is that the work being done by FEMA-funded crews will greatly improve the reliability of the system by the time it’s finished next year, leaving less of the system vulnerable to storms. PSEG also has completed a full cycle of tree trimming and is starting on a second four-year cycle that will further help cut storm outages.
Eichhorn also said the utility has been improving its storm forecasting, helping to better prepare for storms by calling outside crews earlier in the cycle.
“I think we’re getting much better with forecasting,” he said, at predicting “what’s the likely number of outages? And we plan to that. We make that call typically two to three days in advance. If there’s a storm coming and we need those crews, we’re making that decision early.”
He continued, “Our plan is, when the FEMA workers leave, to continue looking at forecasting the way we do — say we need 500 line personnel, and we only have 300 because FEMA has finished their work and moved on, we’ll make that decision two or three days in advance to have those people here. So we’ll still have the same number of people available to respond. It’s just going to be a matter of, did we get them from our FEMA contractors, or did we get them from upstate New York or out of state?”