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LIPA Converts to PSEG-LI January 1st

By: Joe Randazzo  |

The Long Island Power Authority’s wounds became exposed during Hurricane Sandy. Frustrated customers were left in the dark for weeks and months wondering if their power company would come to the rescue. The mounting frustration led to an announcement in May by Governor Cuomo stating LIPA would be converted over to PSEG-LI. After months of planning, that change is happening now. With the ringing in of the new year, Long Islanders will also be ringing in a new power company.

“As our company assumes operations for the Long Island Power Authority on New Year’s, we know you — our new customers — expect a lot from us,” Dave M. Daly, the new COO of PSEG-LI, told Newsday. “We know you have been dissatisfied in the past. That’s why our focus, energy and investment will be on understanding and satisfying your needs and improving storm response. We’re committed to achieving these goals while freezing rates for two years. It won’t be easy but we won’t rest until the people of Long Island have the service they deserve.”

The privatized New Jersey based electric company jumped its final hurdle on Thursday December 26th, when they struck a 12-year-deal with the IRS. This deal allowed them to call Long Island home. With the paperwork finalized, on January 1st, PSEG will take in 1.1 million new customers in Suffolk, Nassau, and the Rockaway Peninsula.

According to Daly PSEG-LI will attempt to make up for past mistakes. New technology is set to be put in the call center by the summer and it will make for easier customer interaction and quicker response times. When the automated outage management systems are installed, the PSEG-LI COO says the company will be able respond to threatening situations faster. Tree trimming programs will also be expanded to make cleanup more efficient after the wind kicks up during storms.

“I worked with the team responsible for overseeing storm logistics at PSE&G, the PSEG subsidiary providing electricity in New Jersey, during superstorm Sandy, ensuring thousands of utility workers had the equipment, materials and support to restore power to 1.7 million customers, Daly says. “In the first three days after Sandy, we restored power to more than a million customers. Our quick action earned PSE&G awards for outstanding storm response.”

One of LIPA’s top criticisms came when the chief executive during Sandy, Michael Hervey, left for the firm Navigant. Governor Cuomo’s Moreland Commission found that three years before Hervey left to join the firm, LIPA paid their consultants a total of $28 million. In 2011. Hervey himself inked a five-year-contract extension worth $23 million with Navigant.

The Commission found that 50 consultants from the the firm charged LIPA with hourly rates of $300 and $500. Some consultants racked up over 1,800 hours a year, while one consultant documented well over 3,700 hours. For five years one Navigant employee collected $4.5 million from LIPA. LIPA paid that one particular consultant more than they did any other firm.