SAME STRUCTURE – NEW CONTRACTOR – OLD CULTURE?


Unfortunately LIPA made a decision to essentially keep its present structure in place with a private contractor performing most of its utility operations. This undermines the nonprofit foundation of a public utility by introducing a for profit entity into the equation, which for the most part goes against the original purpose in establishing LIPA. A full scale municipalization with LIPA directly in control of all workers would have been a better structure to pursue and would have enabled the utility to have more control of its functions and costs.

Nevertheless, at its December 15 th meeting, the LIPA Board moved forward in selecting a contractor to continue with its present basic structure. This followed an extensive procurement process in which National Grid, LIPA’s present contractor, Consolidated Edison and PSEG of New Jersey emerged as finalists. After further consideration of experience, history, capabilities and cost, LIPA selected PSEG as the winner of the contract.

Once other state approvals from the Comptroller and Attorney General are received this utility will begin a transition process to eventually take over from National Grid on January 1, 2014.

The bad news is still that LIPA did not restructure as a full service municipal utility. The good news, however, is that LIPA did make a good selection in PSEG. They have a long history of outstanding utility performance and most recently did an excellent job of restoring electric service in New Jersey after two major storms. Hopefully this arrangement will work out for LI,  but as we all know the devil is in the details. If not there is always the tried and true municipal model to resort to.

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About lipaoversight

LIPA Oversight Committee was created to analyze the rates and practices to determine if it is working in the best interests of the Suffolk County ratepayers
This entry was posted in municipalization, national grid, servco and tagged , , . Bookmark the permalink.

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