The Long Island Power Authority has accused its service provider PSEG of lobbying for the state to explore privatizing electric distribution on the island.
The new state budget being considered includes a proposal to study turning LIPA into a fully public entity. That means the regional energy regulator would take on distributing electricity, instead of hiring a utility company to do the job.
The proposal was introduced after a year-long contract negotiation with LIPA’s service provider PSEG Long Island. LIPA considered replacing them with a different utility company, or becoming a fully public entity instead, after failed performance following Tropical Storm Isaias in 2020.
Still, the LIPA Board of Trustees decided to give PSEG Long Island an $80 million contract with reforms and stiffer penalties. The new contact has yet to take effect.
“We recently renegotiated our contract with PSEG Long Island to protect our customers' best interests and look forward to working with our service provider to carry out that mission,” a LIPA spokesperson said.
In mid-March, the LIPA board learned the New Jersey parent company, PSEG, has been lobbying for the state to study the option of selling LIPA to a private entity, which they said “is not in the best interests of LIPA and its customers.”
PSEG has denied wrongdoing.
“PSEG Long Island understood that the Legislature intended to analyze municipalization only and suggested that the Legislature should consider analyzing all structure options,” a spokesperson said. “PSEG Long Island has been unwavering in its belief that maintaining a public-private partnership is the best option for Long Island.”
