Letter to LIPA COO Mike Hervey from Suffolk County Legislator Romaine
Re: Outsourcing Information Services
Dear Chief Operating Officer Hervey,
As you and the members of the Long island Power Authority’s (LIPA) Board of Trustees may be aware, I am opposed to privatization of LIPA and I favor municipalization over the current arrangement LIPA has with National Grid.
Chief among my reasons for supporting municipalization is that National Grid’s decisions and actions are made in the best interest of itself, which may not necessarily be in the best interest of LiPA and its ratepayers.
Just recently I learned that National Grid is in the process of outsourcing almost all of its Information Services (IS). Under the planned outsourcing, a sub-contractor will be responsible for LIPA customer billing programs, customer representative screens, electric service orders, field collections, electric substation maintenance programs, LIPA outage communication systems, etc. The subcontractor, most likely IBM, is planning to move National Grid’s IS infrastructure into their own data systems, which are not located on Long island.
When National Grid outsourced work in the United Kingdom with Customer Service Center, it made mistakes in contract language that were costly. Now questions are being raised that National Grid’s IS Finance group made accounting errors with its contract with Verizon that could potentially cost tens of millions of dollars more than that was anticipated. This raises concerns about National Grid’s ability to manage supplier contracts.
Furthermore, it is my understanding that National Grid employees have been teaching IBM employees in India to support their applications. This raises questions of transparency regarding who is doing IS work on behalf of LIPA. I don’t know, but I would think that LIPA would have concerns about the loss of local skills of the people who would actually be building its computer applications. It is obviously something that the ratepayers should be aware of. I wonder if LIPA is aware that it will be losing system experts and its applications will not be supported locally if National Grid’s plans for outsourcing continues.
With its current structure, LIPA has little or no control over major decisions such as which computer technologies should be used, outsourcing decisions, offshoring to India, moving Data Centers off Long Island and associated disaster recovery plans.
This is just one reason the current structure should not continue. I urge the LIPA Board of Trustees to carefully review National Grid’s outsourcing plans and what effect it will have on LIPA and its ratepayers. These are matters that should be made available for public scrutiny.
Suffolk County Legislator