State Senator James Gaughran and State Assemblyman Fred Thiele have jointly introduced state legislation establishing a process by which LIPA would be restructured as a true public power authority operated and managed directly by LIPA.

Currently, LIPA is the only utility in the nation that is operated under a third-party management model. LIPA contracts with a private utility company to operate and manage Long Island’s electric utility. For more than 25 years. this model has repeatedly failed its customers. There has been a lack of transparency, oversight, and accountability. That failure has been most dramatically evidenced in the unacceptable storm response by LIPA and its third-party contractors during Superstorm Sandy in 2012 and Tropical Storm Isaias in 2020.

Assemblyman Fred Thiele stated, “In 1986 when the LIPA Act was first passed, it was the intention of the State Legislature to create a true public power authority accountable to its customers. That goal was repeatedly thwarted by Albany politics and we have repeatedly suffered the consequences. We need transparency, accountability, and oversight. Initial investigations by LIPA after Tropical Storm Isaias in 2020-2021 show both ratepayer savings and increased management efficiencies with the public power model. After more than 25 years of unsatisfactory third-party management, now is the chance to provide LIPA’s customers with the benefits of public power.”

Senator Jim Gaughran said "I believe public power is the best way forward for Long Island. Long Islanders have been exploited by PSEG who has failed to provide affordable and reliable service. This legislation will pave the path forward to municipalization -- modeled off the successful process that preserved the treasured Long Island Central Pine Barrens. I thank Assemblyman Fred Thiele for his partnership in this process."

The legislation would create the Legislative Commission on the Future of LIPA. The Commission would investigate and report to the Legislature on the establishment of a public power model for the operation of LIPA.Under such a model, the authority would directly operate and manage the utility as a true public power authority. The Commission would report to the Legislature on the specific actions, legislation, and the timeline necessary to restructure LIPA into a true publicly owned power authority. Such restructuring would occur no later than December 31, 2025.

The Commission would consist of eight members. Three members of the State Senate would be appointed by the Temporary President of the Senate. Three members of the State Assembly would be appointed by the Speaker of the Assembly. One member of the State Senate would be appointed by the Minority Leader of the Senate. One member of the State Assembly would be appointed by the Minority Leader of the Assembly.

The Commission would establish an Advisory Committee of local stakeholders to actively assist and advise the Commission. The Committee would consist of not more than fifteen members including representatives of business, labor, local government, Indian nations and tribes, as well as economic development, environment, energy, social justice, consumer, civic, school or higher education interests.

In reporting to the Legislature on public power, the Commission would consider (a) the method of governance of the public authority, (b) improved transparency, accountability, and public involvement, (c) improved reliability of the system, (d) the impact on electric rates, (e) improved storm response. (f) the powers required by LIPA to more effectively operate the utility, (g) the oversight role of the department of public service and the public service commission over LIPA’s operation, (h)the impact on existing bonded indebtedness, (i) improved long term energy planning, (j) compliance with the goals of NewYorkstateclimate leadership and community protection act, (k) increased reliance on renewable energy sources to produce electricity, (l) taxation and payments in lieu of taxes, (m) the special needs of communities that are or have been impacted by the siting of power generating facilities; and (n)any other matter relevant to the feasibility of establishing a public power model for the operation of LIPA.

After public hearing and comment, no later than December 31, 2022, the Commission would issue a draft report. No later than February 1, 2023, the State Comptroller would have discretion to review the draft report and issue any recommendations relating to public power. After further public hearing and comment, no later than Apri1 1, 2023, the Commission would issue a final report to the members of the Legislature. The report would provide the legislation required for implementation.

Thiele stated, “Our legislation will provide answers to the issues relating to public power. Further, it will provide a definite procedure and timeline for getting there. At the end, every LIPA customer will have the information they need before final action on public power.”