LIPA issues request for information for utility management services

The Long Island Power Authority (LIPA) has issued a request for information (RFI) seeking interest from providers to perform all or select portions of utility management services currently performed by PSEG Long Island.

LIPA owns the Long Island electric grid and contracts with PSEG Long Island, a subsidiary of Public Service Enterprise Group Incorporated, to operate the grid on a day-to-day basis. “Following PSEG Long Island’s failures before, during, and after Tropical Storm Isaias in August 2020, LIPA, as directed by its Board of Trustees, is now seeking organizational and contractual changes, as well as appropriate compensation for the costs unnecessarily incurred to restore electric service to customers,” LIPA states on its website.

On April 28, 2021, LIPA released a Phase II Report of its Options Analysis. The report details the pros and cons of four management options and provides the Board and stakeholders with the facts to make an informed decision. These options include selling LIPA’s assets to private investors, resetting the PSEG Long Island relationship and reforming the contract, contracting with a new service provider to improve operations or bringing utility operations under LIPA management.

The RFI issued by LIPA on May 19 seeks interest from other providers to perform all or select portions of utility management services currently performed by PSEG Long Island in the Long Island and Rockaway service territory. The action comes as negotiations are continuing with PSEG Long Island on a reformed contract as well as an ongoing analysis to examine a fully municipal model of utility governance.

The goals of the RFI include:

• Assessing the market for various portions of utility management services and the potential interest among potential service providers (including consortiums of providers) in providing utility management services to LIPA;
• Positioning LIPA to achieve the Board’s long-term policy goals through the selection of one or more qualified replacement service providers offering management services at competitive costs;
• Identifying service delivery strategies that foster genuine and effective partnership(s) between LIPA and the replacement service provider(s) related to the performance of the relevant utility management services;
• Enhancing LIPA’s ability to prepare a request for proposals for utility management services in the coming months

The LIPA Board of Trustees is holding virtual public comment sessions to hear from customers on the alternatives to improve the future management of LIPA’s assets. The first session took place on May 25, which the second session is scheduled for May 27.

The RFI is available here.