On February 4, New York State Assemblyman Fred Thiele spoke at LIMBA’s (Long Island Metro Business Action) virtual meeting in which he called for the Long Island Power Authority (LIPA) to be restructured as a public power company.
During his presentation, the assemblyman described how he voted against the LIPA Reform Act of 2013, which, he said, was supposed to revamp electric operations on Long Island in order to improve customer service, enhance emergency response and preparation, reduce the cost of LIPA’s debt and ensure safe and adequate service. Mr. Thiele voted against it because it lacked transparency, accountability and oversight. “It was the best ‘no’ vote I ever cast,” he said.
He explained that the current structure acts as a “three-legged stool”: PSEG LI, which is a third-party manager that runs the utilities on a day-to-day basis; LIPA, a nonpublic utility which contracts with other privately run utilities; and the Department of Public Services of Long Island (DPS LI), whose only function is to provide recommendations to PSEG. “There is a lack of transparency,” he said of this operation, adding that PSEG is “the least regulated and has the least oversight.”
He said National Grid — which is responsible for operating and maintaining LIPA’s electrical grid under a management services agreement with the power authority — was “a failure” during Superstorm Sandy, considering that Long Islanders pay the highest utility rates in the nation and get little to no return on investment. “They overpromised and underdelivered,” he said. “Their customers haven’t gotten what they paid for.” On what he described as a dismal response by PSEG LI to Hurricane Isaias, he said, “There were problems with communication and customer response times; these were problems that needed to be addressed.”
The assemblyman advanced the idea of making LIPA a publicly run utility. He pointed out that public utilities are “financially feasible” and more reliable than privately operated ones. Citing an options study that LIPA conducted after Hurricane Isaias, Mr. Thiele said that public utilities can help customers save $65-$75 million a year on their energy bills. In fact, he and New York State Senator James Gaughran introduced a bill that would make LIPA go public. The bill currently has 12 co-sponsors in the Assembly — nine Democrats and three Republicans — and 90% of those who publicly commented on the bill were in favor of it.
Under the proposed legislation, there would be a Legislative Commission on the Future of LIPA, an eight-member group that would report to the state Legislature what would be needed to restructure LIPA as a publicly owned power authority by the end of 2025. The Commission would also establish an Advisory Committee comprised of stakeholders in the fields of labor, business, government, education, higher learning and social justice; consumer and civic organizations; and local Native American tribes.
The problem with LIPA, Mr. Thiele said, is that, historically, the governor’s office, which is based in Albany, controls the utility and the trustees are appointed by the governor, the speaker of the Assembly and the state Senate majority leader — none of whom are from Long Island. He said he and Senator Gaughran hope to meet with Governor Kathy Hochul soon and have this bill included in the state’s proposed 2022-2023 budget.
Mr. Thiele is currently serving his 13th term in the New York State Assembly. During that time, he authored legislation which created the Peconic Bay Community Preservation Fund (CPF) Act. Under the Act, the five East End towns on Long Island established dedicated funds for land preservation and water quality protection, with the money coming from the 2% real estate transfer tax. Since its enactment 20 years ago, the CPF has generated more than $1.7 billion and has resulted in the preservation of more than 10,000 acres of environmentally sensitive land. Mr. Thiele is Chairman of the Local Governments Committee and serves as a Member of the Rules Committee, Environmental Conservation Committee, Oversight, Analysis and Investigation Committee and Transportation Committee.