PSEG Long Island is falling short of two critical performance measures in its contract with LIPA that could mean a reduction in extra incentive pay, although the utility has improved measures of worker safety and customer satisfaction, according to a recent report.
PSEG’s monthly operating report released last month showed a year-to-date improvement in most performance standards, which would allow the utility to receive most of the $8.7 million in extra pay it can receive under contract from LIPA. That would be in addition to the $58 million it receives in regular contract pay.
But the report also shows that the critical measures of outage duration and frequency are below the level that would earn the full extra compensation. The utility has also indicated that several efforts to improve the measures likely won’t be enough to hit targets by Dec. 31.
At a LIPA board meeting last month, PSEG Long Island president David Daly said the two lower-than-expected service scores were largely the result of bad weather.
“We do know that we’ve had, relative to last year and the last five years, significantly more storm activity that impacted our system,” Daly told trustees. Big storms that knock out more than 15,000 customers don’t count in the measurement.
One LIPA trustee, Matthew Cordaro, said he worried that the remainder of the year wasn’t enough to correct the problems. “The thing that concerns me is just the fact that you’re not projecting you can overcome this in time over the remaining year,” he said.
Daly said the utility had undertaken a series of initiatives to improve the numbers, and suggested that if the weather is better than expected, there was still a chance.
“It could come in,” he said. “We’d need to have a little bit of offsetting weather. We’ve had much worse than normal weather up to this point.”
PSEG was under its projection for the system average interruption duration index and the system average interruption frequency index. Through August the frequency index was 0.78 percent, a figure that indicates the average number of times a customer has seen a service disruption. The year-to-date goal was 0.58.
The duration index, which indicates the outage time that an average customer experiences in a year, was 54.1 minutes through August. The target for that point was 43.5 minutes and the year-end target is 68.5 minutes.
LIPA trustee Mark Fischl said he nevertheless had a “lot of confidence” in PSEG. “They are real professionals and I think it’s just a matter of time before they win over everyone in terms of managing the system.”