Customer Service, Executive Insight, Outage Management, T&D, Transmission

Gov. Cuomo says ‘broken’ LIPA to be taken over by PSEG

The majority of operations at New York state-owned public utility company Long Island Power Authority will be taken over by New Jersey-based private utility Public Service Enterprise Group (PSEG), said N.Y. Gov. Andrew Cuomo.

LIPA is broken and LIPA has to go away,” Cuomo said in a press conference. “We need a new and better way to provide utility services on Long Island.”

LIPA was criticized for its response to Hurricane Sandy, which left 90 percent of LIPA’s 1.1 million customers on Long Island without electricity, some for more than two weeks, according to a Reuters report.

Cuomo also wants to cut LIPA staff from 90 to 20 and remove 10 members of the utility’s board of directors, which currently has 15 members.

LIPA will still be allowed to receive federal disaster funding and will maintain certain tax advantages of a publicly owned utility, according to Cuomo.

LIPA has a service agreement with National Grid that will expire at the end of 2013. National Grid currently provides most of LIPA’s storm response capability and staff.

Cuomo’s proposal would change a law that lets LIPA refinance half of its debt at lower rates. The utility is $6.7 billion in debt, according to reports.

According to an April survey by the American Customer Satisfaction Index, LIPA’s customer satisfaction ranking dropped 26 percentage points following Hurricane Sandy. Customer satisfaction is ranked at 43 percent, which is the lowest score recorded by ACSI for any utility.