NYS must reform LIPA and end utility lobbying

Long Island Power Authority ratepayers are facing the consequences of a flawed utility governance structure that favors an entrenched service provider over the interests of the public. Deep, structural reform is needed to protect Long Islanders from the undue influence of lobbying and the absence of robust oversight.

To be clear, the hardworking professional staff at LIPA and the front-line workers at PSEG Long Island are not to blame. They are doing their jobs under challenging circumstances. The problem lies in the governance structure and the actions of corporate leadership.

At the heart of the problem is the public-private hybrid model under which LIPA contracts with a private utility — currently PSEG Long Island — to operate its electric grid. While LIPA technically owns the grid, it outsources the critical responsibilities of daily operations, customer service, and storm response. In theory, this model offers the best of both worlds: public ownership and private sector efficiency. In practice, not so much.

PSEG Long Island, through direct lobbying and political influence, has actively worked to shape legislation, regulation, and public policy in ways that primarily serve its corporate interests — not the people who pay the bills. This behavior is fundamentally incompatible with its role as a public service contractor. A utility entrusted with delivering a public good should never be allowed to use its resources to lobby against reforms or accountability measures that would protect ratepayers. It is a clear conflict of interest, and the law must be changed to prohibit lobbying activity by service providers under contract with publicly owned utilities.

An investigation by the state Inspector General into the governance and operations of LIPA and its contractual relationship with PSEG underscores just how serious the allegations and structural weaknesses are, and highlights the urgent need for greater transparency and accountability.

LIPA’s governance structure also requires urgent attention. LIPA trustees are appointed to serve finite terms. Yet, due to political inertia or design, trustees often remain in place well beyond their term limits, or critical vacancies are left unfilled. This practice undermines board independence and makes the body more susceptible to undue influence from the entities it is supposed to oversee. New York State must implement strict requirements that trustee appointments are either renewed or replaced immediately upon term expiration. Governance cannot function if oversight bodies are stale or politically paralyzed.

Compounding the dysfunction is the porous nature of state ethics laws governing the relationships between regulators, legislators, and utility contractors. It is no surprise that service providers have been able to push back aggressively against reforms — often using the very dollars paid by ratepayers to do so.

Real accountability demands real transparency. The State Legislature must overhaul ethics rules to create clear prohibitions on lobbying by state contractors and strengthen conflict-of-interest laws governing utility operations. These reforms should include mandatory enhanced transparency in board appointments, and tighter limits on campaign contributions from utility interests.

LIPA was created as a public utility to serve the people of Long Island, not to enrich a private operator through a murky, unaccountable arrangement. As the region faces growing energy demands, climate pressures, and the need for a more resilient grid, we cannot afford to let outdated governance and unchecked lobbying steer our energy future.

It’s time for Albany to act: Reform LIPA, close ethics loopholes, end utility lobbying, and restore public trust in the institutions meant to serve us — not sell us out.

This guest essay reflects the views of Drew Biondo, who resigned in February after six years over two terms as a LIPA trustee.