Assemblyman Fred W. Thiele Pushes Through LIPA Reform Bills

State Assemblyman Fred W. Thiele Jr. announced last week that several bills he authored to help regulate LIPA passed both houses of the legislature. The package of bills, which Mr. Thiele introduced following Tropical Storm Isaias in August 2020, aim to increase transparency, accountability, and oversight over LIPA and its service provider, PSEG-LI, he said.

In 2012, Governor Andrew Cuomo signed the “LIPA Reform Act” which aimed to correct LIPA’s lack of preparedness for Hurricane Sandy and inadequate storm response. The act allowed LIPA to contract out operation of the entire electric system on Long Island to PSEG-LI, a private company based in New Jersey. The bill was intended to improve customer service, as well as emergency storm response and preparedness, but years later a similar breakdown occurred during Tropical Storm Isaias, Mr. Thiele charged.

“The Long Island Power Authority has always been problematic,” Mr. Theile said. “It’s been a continuing issue that reared its head most recently last summer after Tropical Storm Isaias, which was a disaster on Long Island. It wasn’t even a bad storm, it was a tropical storm, not a hurricane, but the lights went out on almost 500,000 customers on Long Island. … The biggest breakdown was in communications—nobody could get through to LIPA or PSEG-LI.”

Mr. Thiele’s legislation was introduced last fall, following Tropical Storm Isaias, and went into session in January. Mr. Thiele worked on the package of bills alongside State Senator James Gaughran and Senator Todd Kaminsky.

“We basically worked together on this package of bills that are designed to make LIPA more accountable, to get better service for the public, and to provide more information to the public,” Mr. Thiele said.

One of the bills introduced would require LIPA to successfully complete an annual stress test of outage management and communications systems. If the stress tests are not completed on time, a significant penalty would be imposed. Mr. Thiele explained that the completion of an annual stress test will allow customers to be confident that they will have access to electricity during storms, and that LIPA’s storm response will be effective.

“What happened last summer was that when the storm came, it was obvious that LIPA was unprepared, that the system hadn’t been tested, so when the storm occurred, everything broke down,” Mr. Thiele said.

LIPA’s contract with PSEG-LI requires it to conduct frequent stress tests of its system. Following the prolonged power outages last summer, LIPA ordered PSEG-LI to perform an immediate stress test, but to date, that test has not been successfully completed.

“On LIPA’s contract with PSEG-LI, this was something that PSEG was supposed to do, and they lied about it, so when the storm came, the entire system broke down,” Mr. Thiele said. “What our legislation does is it requires annual stress tests in law, as opposed to a contract, and it imposes a substantial penalty if there is a failure to do a stress test.”

Another bill would require LIPA and PSEG-LI to provide the public with their executive compensation information and to make this information accessible on the Department of Public Service’s website. Mr. Thiele said that in the past, he and his colleagues have asked PSEG-LI to, as part of the rate making process, let them know how much it was paying executives, but PSEG-LI refused.

“We asked PSEG-LI, the service provider, to let us know how much the officers of the corporation and the policy makers are making, and they basically said it was none of the public’s business. The second bill will require them to provide executive compensation information to the public so that ratepayers know where their money is going.”

The third bill requires LIPA to provide the public with a description of expenses related to advertising and lobbying, for similar reasons as the previous bill.

“LIPA and service providers are lobbying, and the public needs to know how much money is being spent in that regard,” Mr. Thiele said. “These two bills really go towards transparency, and allowing ratepayers to know how their money is being spent with regards to activities such as executive compensation and lobbying.”

Another bill would make sure that LIPA customers have access to a Community Choice Aggregation program (CCA), where they can find their power from companies other than LIPA and PSEG-LI. In its simplest terms, CCA allows customers of LIPA to seek alternative sources of power, either because they may want more renewable power, or because there’s cheaper power available, Mr Thiele said. With CCA, a town can contract with a third party energy supplier to purchase power on behalf of its residents — that power, often cheaper and greener. LIPA altered its official rulebook in 2020 to allow for CCA programs, but town officials have since accused their programs of being unfeasible, and failing to allow for competition.

“Since LIPA is a public authority, they have been blocking the opportunity for towns like Southampton and East Hampton to engage in a Community Choice Aggregation program,” Mr. Thiele said. “LIPA is supposed to provide a program that allows for that kind of competition, but they’ve really put some roadblocks in place in the Town of Southampton and East Hampton,” Mr. Thiele said. “This bill was really designed to make sure that our towns have the same access to a Community Choice program as they do in the rest of the state.”

The final bill would allow LIPA to borrow money in order to finance system resilience upgrades and improvements. The bill would also put a cap on how much LIPA can borrow, and allow oversight from the Public Service Commission.

“We wanted to see the resiliency of the system improve but we also wanted to put some checks and balances on LIPA as far as how much they could borrow, and some oversight to make sure that that borrowing was warranted.”

Mr. Thiele added that since LIPA is a governmental entity, a higher level of transparency and accountability is demanded. Still, private investor owned utilities also need to be transparent, he said. There are currently bills which have been introduced by other members of the legislature that affect private investor owned utilities, like ConEdison and New York State Electric and Power.

Mr. Thiele said the common theme of the set of bills he introduced is to reform LIPA and make it more responsive to the ratepayers, more transparent, and to give consumers better service.

“When there’s a total breakdown like there was last August,” he said, “that’s when we hear from our constituents. They pay some of the highest rates in the nation and they expect good service, and they did not get that reliability or response after the tropical storm.”