Opposition to state-proposed Long Island municipal utility plan solidifies
Unions and businesses have joined PSEG Long Island (PSEGLI) as opponents to a New York State municipal utility plan for Long Island, contending the proposal is misplaced.
“Municipalization introduces uncertainties that could undermine efforts to deliver reliable services, negatively impacting consumers and workers’ lives,” said Grant Newburger, director of communications and organizing for the Building and Construction Trades Council of Nassau and Suffolk Counties, AFL-CIO.
Newburger said the trades council represents the 36 different unions in the construction industry on Long Island, N.Y., with a membership totaling 65,000 local Long Islanders. PSEGLI, he said, manages a workforce of 2,500 experienced employees who “have tirelessly delivered reliable power across Long Island, and especially those residents throughout the Hamptons.”
“Municipalization jeopardizes the present PSEG workforce, their benefits, their pensions — the benefits that they’ve worked hard throughout their entire careers to accumulate are at risk of disappearing entirely,” Newburger said during a Sept. 20 hearing held in Southampton, N.Y., by the Legislative Commission on the Future of the Long Island Power Authority.
Likewise, PSEGLI has the same concerns.
“The unions, like much of Long Island, recognize that the public-private partnership is working for our customers and for our employees,” Christopher Hahn, vice president of external affairs for PSEGLI, told Daily Energy Insider on Tuesday. “More importantly, the union here has always been a private-sector union even though LIPA owns the grid.”
PSEGLI is part of the New Jersey-headquartered Public Service Enterprise Group (PSEG), a publicly traded diversified energy company that’s one of the nation’s 10 largest electric companies.
The New York State Legislature last year created the commission to study a state government takeover of the Long Island Power Authority (LIPA), the state’s municipal subdivision that owns the electric transmission and electric distribution system serving all of Long Island and a portion of New York City known as the Rockaways.
The local grid is currently run by PSEGLI, the service provider that has a management contract with LIPA. The commission’s idea is to transition LIPA to a public power provider after its contract with PSEGLI expires in December 2025.
Thus far, the legislative commission on April 11 released a draft report on the transition and held public hearings in May. A second round of public hearings was held this month, most recently last week. The next step is for the commission to consult with its advisory committee and then deliver a final report in November to the State Legislature, which would have to propose legislation for any change to take place.
Municipalization opponents steadfastly stand behind the status quo.
For instance, Newburger also pointed out that ratepayers and taxpayers will be negatively impacted by municipalization.
“As union members, we are residents here on Long Island and we are also ratepayers and taxpayers,” he said. “We’re not just some scary entity. We are the volunteer firefighters. We are the softball coaches. We are your neighbors. Residents here are already facing the daily burdens of inflation and a looming recession. And increases in rates cannot be an option beyond the potential severe impacts on workers’ lives.”
Newburger said the draft plan’s cost estimates are “completely speculative” and questioned whether the calculations truly account for the unrealized costs five, 10, 15 years from now.
“There’s no guarantee that initialization and unrealized costs, including the immediate huge cost of acquiring the utility and its infrastructure, would save already overburdened repairs and taxpayers alike,” he said.
New York Assemblyman Fred Thiele, co-chair of the New York State Legislative Commission on the Future of the LIPA, told Newburger during the Sept. 20 hearing that the commission’s draft report addresses protecting the union workforce.
“This commission was formed not because there was any dissatisfaction with the performance of the labor members that provide the services,” Thiele said. “From the beginning, there’s been nothing but wanting to protect labor. And that’s in the draft report. Nobody’s ever talked about them becoming public employees.”
Thiele also said that LIPA would not have to acquire all of the infrastructure because it already owns all the infrastructure. “This is about who manages the infrastructure,” he said. “Is it going to be nine appointees from labor that are appointed in Albany and a company that manages it that is from New Jersey and has their first interest there, or are we going to take back control over our utility?
“And I’ve said it before, I’ll say it again. If we find after talking to our attorneys that there isn’t a mechanism to protect the rights of labor and the benefits of labor, this thing will not move forward,” said Thiele.
“I think every member of this commission, both houses, both parties want to see the unionized labor force continue as they have with the benefits that they’ve always had,” the assemblyman added.
But are union members buying it?
Pat Guidice, business manager of the International Brotherhood of Electrical Workers (IBEW) Local 1049, testified during the commission’s Sept. 12 hearing held in Smithtown, N.Y., that union members would be directly impacted by the proposed municipalization, particularly how the plan would impact “our rank-and-file members,” their well-being, and their current benefits and protections, he said.
“The security of workers benefits structures allows families to back them as they bravely serve at all hours in any weather at any time,” Guidice testified. “IBEW Local 1049 members are wholeheartedly committed to delivering prompt, reliable, and high-quality electric service to families and businesses across Long Island and the Rockaways. We believe that these vital services are best provided through the [current] model… a public-private partnership model that has worked.”
And while the draft legislation attempts to ensure protections for all workers, Guidice said IBEW Local 1049 wants the good, unionized jobs maintained for not only the current members, but for future utility workers looking forward to careers in the era of emerging electrification.
“At IBEW 1049 we believe that transitioning workers to state employees has the potential to take away our retirement, and that will not sufficiently safeguard the hard-earned benefits and pensions that our members have built over decades,” said Guidice. “We urge that as the legislation is written and put together that the rights of the workers are kept first and foremost.”
During the Sept. 12 hearing, Thiele again said that protecting the rights of union workers is a shared goal.
Don’t fix what ain’t broken
PSEGLI’s Hahn said that when the original LIPA was formed in the late 1990s, early 2000s, the legislature had to create a separate company for the union, which is why they had a public-private partnership to begin with so that the union could maintain the benefits and the pensions that they fought so hard to achieve.
“Long Island has a long history of politics and meddling in the utility,” he told Daily Energy Insider, which is why in 2013 when the legislature created the LIPA, it set up a public-private partnership whereby a qualified utility operator became primarily responsible for making the decisions about how to properly run the utility. But in those early years, Hahn said some bad decisions linked to outside political forces were made.
Then, when PSEGLI took over management, Hahn said reliability and customer satisfaction increased, though municipalization proponents say failures by PSEGLI during certain severe weather events are part of the reason for considering a new plan.
“Since PSEGLI has taken over, reliability is up; customer satisfaction is up,” said Hahn. “We have been able to manage the power supply charge almost better than any utility in the country. In fact, the only utility out there better than us… is our parent company. There’s really no reasonable reason to move forward with a municipal utility.”
Hahn also noted that there have been folks out there pursuing the municipalization plan for a very long time, way before PSEGLI was the operator of the grid. The proposal, he said, is “really an ideological push that is not based on any fact.”
“I don’t believe this [plan] will actually happen,” Hahn said. “I think that there is a lot of opposition to this and the support for the other side is not really showing itself. And I don’t see large rallies of people calling for this.”
Municipalization supporters, he said, also are ignoring the fact that the current public-private partnership already provides many of the same benefits they think would be gained via a municipal utility. For instance, because LIPA owns the grid, the partnership qualifies for public financing at a much lower rate and can secure FEMA funds during a disaster.
“And we already have the ability for the state to make policy that would encourage us to be a more greener grid. PSEGLI would just be the one to implement that in a competent, sound, expert utility manner using industry best practices and sound engineering rather than having politics drive the train,” Hahn said. “That’s why the legislature in 2013 created the public-private partnership model.”
More opposition exists
In addition to the unions, there are also other municipal utility opponents.
Luis Vazquez, president and CEO of the Long Island Hispanic Chamber of Commerce, for example, testified during the commission’s Sept. 14 hearing held in Mineola, N.Y., that the chamber is against municipalization.
“This is a complex issue. Our community does not know half of what goes on. But we have a relationship with PSEG and we would like to keep it that way,” said Vazquez, saying there is consensus among members that the commission has not conducted public outreach and education to inform them about LIPA, the draft plan, or municipalization.
“Half of the problem is educating our communities and chambers,” he said. “I do have friends and we have chamber presidents and we speak and most of them are not in favor of this municipalization.”
In other testimony during the Sept. 14 hearing, New York Republican Assemblyman Jake Blumencranz chastised the commission’s draft report for not addressing the underlying issues with LIPA, which he said has faced a lot of trials and tribulations.
“I think we can also safely say that if we don’t start to seriously address the issues surrounding the debt that we have, then we can never start seriously looking at a solution for a future that’s more viable, that’s more affordable, that creates better rates for the ratepayers,” Blumencranz said. “I’m just very troubled that we have not seen anything in this report that really starts to try and tackle that.”
While Blumencranz said he understands that after every major storm there’s a call for more change, but if the root issues within LIPA aren’t changed, “then we are faced with a serious, troublesome future when it comes to our energy and our grid infrastructure.”
The draft report also doesn’t address the transition to green energy, he said. “I would conclude in saying that I strongly recommend that we do not move towards municipalization here in its current state because it’s not a municipalization and because I don’t feel like we are doing anything but repeating the history we’ve seen in the past,” said Blumencranz.
