Campaign against a fully public LIPA relies on misinformation

As a scientist and professor, I taught students to use data and facts to form conclusions. After careful deliberation and study, the Legislative Commission on the Future of the Long Island Power Authority clearly examined the data and laid out the facts in a draft report in April. The report demonstrated that LIPA should move away from its current contract business model with PSEG Long Island. Rather than paying private vendors to run LIPA’s electric grid, it should be locally managed with direct accountability to the public for performance. This change would save money, while increasing transparency, responsiveness, and accountability to customers.

There are about 2,000 public power utilities in the United States, including successful companies like the Tennessee Valley Authority and the New York Power Authority, both created by Franklin D. Roosevelt nearly 100 years ago. LIPA itself is already publicly owned, but it is managed through a byzantine contract arrangement that has failed to deliver for customers for 25 years.

This is a pivotal moment for Long Island and the Rockaways. But what was on track to be a historic improvement has, for now, been delayed or derailed. And it makes me question why.

I have been alarmed to witness what appears to be a concerted campaign to delegitimize the work of the commission. Opponents of public power have been willfully misleading. Special interests and well-paid lobbyists, some who don’t even live in our community, have spoken of “government takeovers” and don’t mention that LIPA is already a public power utility. One of the funders of this PR campaign has been the trade association for investor-owned utilities such as PSEG.

Some have advocated selling LIPA to a private company, but the numbers would add up to higher electric rates. The reality is that regulated investor-owned utilities are not “the private sector” governed by market forces, but rather highly profitable monopolies with little risk to investors. Moving to full privatization would mean greater costs for Long Island residents and businesses, and less accountability for the utility. In addition, we would lose access to federal grants that have reduced costs to Long Island customers by $1.8 billion over the last decade.

Others say we should continue to contract out management but try again with a new vendor. Will the third vendor do better than the first two? As the commission’s report noted, there is a reason that private companies and government agencies rarely contract out core management responsibilities: Letting vendors run the company is like having the fox guard the hen house.

The commission's report makes a convincing case that the problem is the business model itself. LIPA pays $80 million a year for 19 contract managers. Is that a good deal? Looking at PSEG Long Island’s 2022 performance report released in May, they earned a 92% contract payout for achieving 69% of their performance goals. It seems like we have a good deal for the contractor but not for customers.

This fall, the commission will again take up the effort to enact change, and Long Island residents will have the opportunity to weigh in before the final report is published in November and the State Legislature takes up its findings next year. Let’s send a clear message to the commission and the vested interests that we have looked at the facts, and we want to see the benefits of a fully public electric utility here on Long Island.