The State Comptroller has finally approved the contract between LIPA and PSEG after some changes were made affecting PSEG’s status as an agent for LIPA. Assuming an on schedule transition, PSEG will replace National Grid as LIPA’s major operating contractor on January 1, 2014.
As previously stated on this site, a full service municipal structure would be superior to LIPA outsourcing its operating functions to a for-profit contractor. Nevertheless, LIPA elected to continue with a structure very similar to what it has had since its formation. Given that decision, however, at least the choice of PSEG was a good one.
In the end the success of this new marriage will depend on LIPA’s ability to manage and oversee PSEG’s performance. The Comptroller said essentially this in indicating the basis for his approval of the contract. Unfortunately, LIPA’s track record up to this point in supervising KeySpan and National Grid has not been too good.
Hopefully LIPA has learned its lessons from the past or the next stop is full municipalization.