Long Island Power Authority should be managed by and for ratepayers

The New York State Legislature is considering the Long Island Public Power Act. The bill would enable the Long Island Power Authority to manage the utility’s operations itself with real community input, and complete the transition by the time its current management contract with PSEG expires at the end of 2025. To make that happen, the legislature needs to enact the bill during this year’s session.

LIPA’s current third-party contractor arrangement, which outsources its management to PSEG, is an outlier no other utility uses — and for good reason: It’s an inefficient, wasteful, flawed, failed model. Instead, LIPA should operate as a fully public utility managed by and for its ratepayers, the way it was always intended to be.

In theory, we, the ratepayers, are the owners of LIPA, so it should be managed for our benefit. But that’s not how it has been run by PSEG, an out-of-state, for-profit corporation. Its executives draw outsized salaries and make billions for its shareholders while we, the ratepayers, are saddled with high electricity bills, long outages, poor service, one of the lowest residential customer satisfaction scores of any utility in the country, and the lowest business customer satisfaction scores bar none. It’s time we took back control.

The Legislative Commission on the Future of the Long Island Power Authority formed by the legislature to study the issue submitted its final report in November. It found that by letting PSEG go and ceasing to outsource the utility’s management, LIPA could save up to $75 million a year, reduce electricity bills, and improve service.

Management decisions would be made by the LIPA board of trustees, 13 members with fiduciary responsibility to serve the best interests of LIPA’s customer-owners. The new structure would bring LIPA under local control with local accountability.

The bill sets up a Community Stakeholder Board to represent ratepayer’s views and needs to the LIPA board. The stakeholder board would be composed of 26 ratepayers from diverse communities and backgrounds across LIPA’s service area, from local leaders to technical experts, who would elect a chair who would be a voting member of the LIPA board.

This stakeholder board would be tasked with specific functions like collecting community feedback, monitoring LIPA’s budget, and weighing in on the Integrated Resource Plan, LIPA’s road map for complying with New York’s climate law while insuring adequate power in the future.

The Integrated Resource Plan has a bearing on environmental justice issues like siting renewable energy infrastructure or preparing for more frequent storms and floods. Should we bury power lines? How do we make a smooth, fair transition to renewable energy? How should LIPA revenues be reinvested to meet local needs, increase accountability, and benefit ratepayers as opposed to profiting shareholders? Such decisions require lots of input from diverse stakeholders and communities, which the stakeholder board would provide.

The LIPA Public Power Act will make our transition to renewable energy faster and fairer, which will help us meet the state's climate mandates, including getting 70% of our energy from renewable sources by 2030, and 100% by 2040. The bill would place LIPA management under a diverse, competent LIPA board, and empower and support stakeholders to participate in decisions that affect them, including promoting and interconnecting residential solar and battery storage, rolling out energy efficiency and heat pumps, supporting more electric vehicles and charging stations, etc.

LIPA’s 1.2 million customers who have had years of ineffective outsourced mismanagement deserve better. When LIPA switches to full public power, it will be obligated and motivated to involve stakeholders in its decisions and serve the best interests of Long Island’s ratepayers.

This guest essay reflects the views of Michael Menser, an associate professor at CUNY and member of the Reimagine LIPA campaign, and Lisa Tyson, co-chair of the LIPA Community Advisory Board and executive director of the Long Island Progressive Coalition.