LIPA Commission Approves Draft Report Detailing Action Plan for Transition to Public Power
Commission Finds that Public Power Will Save Ratepayers Between Nearly $50 million and $80 Million Annually to Mitigate Future Rate Increases, Upgrade Infrastructure, Invest in Climate-Friendly Green Initiatives, or Support Struggling Residents and Businesses; The More Accountable, Transparent, and Streamlined LIPA as Proposed will Improve System Reliability, Storm Response Operations, Long Term Energy Planning, and Consideration for the Interests of Marginalized Communities; Public Power Does Not Reduce LIPA’s Tax and PILOT Payments to Local Governments, or its Obligations to its Bond Holders; Draft Report Lays Out Options for Keeping the Grid’s Day-to-Day Workforce as Private-Sector Union Employees, and for Enhancing LIPA’s Governance Through Either an Appointed or Elected Board
The New York State Legislative Commission on the Future of the Long Island Power Authority today approved a Draft Report for submission to the legislature, as required pursuant to NY Legislative Law § 83-n, detailing its preliminary findings and plan for transitioning LIPA into a true public power provider – one that both owns and operates the electric grid on Long Island and in the Rockaways.
The Draft Report is the culmination of analyses of thousands of pages of financial and operational data; prior and contemporary studies of LIPA’s shortcomings, failures, and options for reform; interviews with officials from LIPA, PSEGLI, the Department of Public Service, and IBEW Local 1049, whose approximately 1,500 members actually operate the electric grid; and five public hearings from Long Island’s East End to the Rockaways, with testimony from ratepayers, stakeholders, experts, academics, advocates, and elected officials at all levels of government.
Now the Commission will conduct another round of public hearings and consult with its fifteen-member Advisory Committee before delivering a final report to the legislature in time for its recommendations to be acted upon this legislative session.
“These next steps bring us closer to more efficient utility services with a higher level of accountability for Long Island ratepayers, and I look forward to sharing final recommendations with the Legislature in the near future. I am confident that the Commission’s dedication to an expeditious and transparent process, including through direct participation during our public hearings, will produce a final report reflective of stakeholder concerns and suggestions while putting consumers first.” – Senator Kevin Thomas, Commission Co-Chair
“With today's issuance of the draft report by the Commission, LIPA ratepayers are one step closer to a more transparent and accountable public utility. The draft report surveys all of the major issues associated with the conversion of LIPA to a true public power model, including cost savings, accountable governance, workforce protections, and public oversight. The report also provides realistic alternatives for implementation. Now, the public will get the chance to be heard one more time before the Commission makes its final recommendations to the State Legislature. I wish to thank my fellow Commissioners, the Commission's experts, and most of all the public for helping to produce a realistic blueprint as we decide LIPA's future.” – Assembly Member Fred W. Thiele, Jr., Commission Co-Chair
The Draft Report lays out the operational, legal, and legislative steps necessary to achieve public power at the expiration of PSEGLI’s contract on December 31, 2025, and, as mandated by law, gave consideration to methods of governance; improved transparency, accountability, and public involvement; improved reliability; the impact on electric rates; improved storm response; the impact on existing bonded indebtedness; improved long term energy planning; compliance with the goals of the New York state climate leadership and community protection act; increased reliance on renewable energy sources to produce electricity; taxation and payments in lieu of taxes; and the special needs of communities that are or have been impacted by the siting of power generating facilities.
The Draft Report’s key financial finding is that LIPA can save between nearly $50 million and $80 million a year by operating its electric grid itself without hiring an outside, for-profit utility – PSEGLI – to operate it for them, after one-time transition costs of between $16 million and $59 million.
The Draft Report provides options for addressing two key considerations: (1) how to most effectively ensure that LIPA’s day-to-day workforce, primarily represented by IBEW Local 1049 and employed by a subsidiary of PSEGLI, remains a private-sector union workforce; and (2) how best to govern the new LIPA, either through an appointed or elected board, or combination thereof.
The Commission expects the governance question to be a focus of its upcoming hearings.
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