Turning LIPA public can increase transparency and affordability, report shows
The Commission on the Future of the Long Island Power Authority released a draft report indicating the benefits of turning LIPA into a fully public model. The report outlines how these changes would improve transparency and affordability for residents.
PSEG Long Island currently operates under LIPA’s oversight through a private-public model. The utility company is hired to manage the regional electric grid. But, changing LIPA to a fully public model could mean managing the grid themselves, saving up to $78 million annually, according to the draft commission report.
“I think people are interested in the benefits that could come with a full public power company,” State Assemblymember Fred Thiele (D-Sag Harbor), co-chair of the committee, said. “But the first question they always want to have answered is, is it going to cost less? Or is it going to cost more, because of the high cost of living on Long Island, especially electric rates, nobody's going to want to pay more on their utility bills.”
The report noted that PSEG Long Island’s response time was inefficient and it misled customers about preparedness for Tropical Storm Isaias in 2020. LIPA considered not renewing its service contract with the utility company, but instead mandated reforms under a new contract to ensure stronger penalties for mismanagement.
However, flaws in LIPA’s current private-public model were made clear by electricity customers during several public hearings, testifying that Tropical Storm Isaias left approximately 645,000 residents without power for over a week.
Thiele has criticized the public-private model, saying changes need to be made to LIPA’s board, which consist of appointees from the governor and the state Assembly.
“There's really no accountability locally. And governance of the board to improve accountability and oversight and transparency,” Thiele said. “How the board is selected is a critical issue. So the report doesn't make any decisions there. But it outlines the various options, whether it be an elected board, and appointed board, but with the appointees coming locally, as opposed from Albany, or maybe some hybrid.”
A commission hearing is scheduled for Friday, April 21, in Nassau County.
Ryan Madden, sustainability organizer at the Long Island Progressive Coalition, emphasized the need for change from LIPA, noting “for good reason this model doesn't exist elsewhere is because it's inefficient. And it's more costly, and it's unaccountable.”
“And so while public power is not a panacea that solves all issues, we know the failures of privatization, and we know the failures of this current model,” he added.
Industry groups, including the Long Island Association, are expected to question whether LIPA should sell to private investors instead — a move that several studies have shown would be costly and not in the best interest of customers.