Suffolk Closeup: Get greed out of a public utility

New York Governor Andrew Cuomo’s imposition of a New Jersey utility, PSEG, on Long Island has had terrible results.

As Assemblyman Fred W. Thiele Jr. (I-Sag Harbor), who represents the Island, said earlier this year, Mr. Cuomo’s so-called “LIPA Reform Act” took effect in 2014 and “one year later where’s the reform?”

He voted against the Cuomo plan, Mr. Thiele explained, not because LIPA, which had been Long Island’s utility, “didn’t need real reform.”

But the Cuomo scheme “did nothing to help Long Island ratepayers,” Mr. Thiele added. “Instead, it transferred our energy future to a New Jersey-based company and eliminated any regulatory checks and balances. We deserved better. It has now been a year since PSEG-LI took over the reins … For those who were skeptical and thought nothing would change, you were wrong. It’s gotten worse.”

Mr. Thiele detailed how “the promise that electric rates would not increase for three years” has been broken, utility debt has skyrocketed, renewable energy has been discouraged and “a year later, Long Island still gives its electric utility [PSEG] the lowest ratings of consumer satisfaction in the nation.”

But the assemblyman was just getting warmed up: “PSEG apparently has no interest in improving this rating, judging by the way it handled the transmission pole controversy in East Hampton” — erecting giant poles, their bottoms saturated with a toxic chemical, refusing to consider burial of transmission lines and refusing “to talk to the community and elected officials.

“I can assure PSEG that increases in rates, increased LIPA debt, abandonment of renewable energy promises, and utter disdain for the established community interests … and the environment is not the formula for increased consumer satisfaction.”

PSEG is now seeking a new set of electric rate hikes of 4 percent a year for the next three years. Blasting the new PSEG rate hike plan last week was new Suffolk County Comptroller John M. Kennedy Jr. He pointed out that PSEG rates have already gone up and, he declared, PSEG hasn’t given “evidence” that this new rate increase “is necessary.” Governments are “struggling to keep their budgets within” tax caps, Mr. Kennedy said. “What gives PSEG the right to feel it is exempt from that?”

The answer is that PSEG is a private utility — unlike LIPA, a non-profit public power entity — and PSEG’s aim is to make money, lots of money. Indeed, another PSEG controversy was PSEG refusing a request by Newsday “to release the current and planned salaries of its 18 top executives” on Long Island whom, the newspaper reported, “are paid in part through a PSEG management fee that will increase to $73 million in 2016 from a current $45 million.”

Mr. Thiele, who has been leading the legislative challenge to PSEG, notes that PSEG’s keeping secret the salaries of its executives stems from the Cuomo deal giving it “a virtual unregulated monopoly with near dictatorial authority over Long Island’s energy future. No other utility company in the nation has the type of unfettered dominion over its service territory that has been granted to PSEG.”

On salaries, the arrangement is “totally different” from the situation for other private utilities “across the nation,” in which “executive compensation is an important issue … subject to review” as part of government regulation, Mr. Thiele said.

Meanwhile, PSEG is balking about giving the New York State Public Service Commission details on its planned 4-percent-a-year series of rate hikes. The PSC this month complained about PSEG’s “reluctance to be fully responsive to the discovery requests made by [PSC] staff.” PSEG has “failed to provide responses to many information and document requests.”

The problem here is that under the Cuomo deal, the PSC can only make “recommendations,” not regulate PSEG on Long Island, as it does other utilities.

What’s to be done? Easy. PSEG should be sent high-tailing it back to its home base in Newark. LIPA should be allowed to become what it was supposed to be when it was created to take over the Long Island Lighting Company, which had been an arrogant, short-sighted and greedy utility that PSEG years later is matching.

The key for LIPA was being a public power entity run by a democratically elected board. That way, Long Islanders would be charting their own energy future. But Mr. Cuomo’s father, Mario, and George Pataki, as governors, eliminated the democratic element. Then Andrew Cuomo decimated LIPA and foisted PSEG on us.

This all should be reversed and returned to the vision of a democratically-run LIPA fulfilling Long Islanders’ electric needs.