LIPA published and presented the Phase I Options Analysis for the Management of LIPA’s Assets. The Options Analysis explored three potential alternatives for the future management of LIPA’s assets, including (i) privatization, (ii) continuing to contract day-to-day management to PSEG Long Island or another utility under a re-negotiated contract; and (iii) terminating the PSEG Long Island contract and directly managing LIPA operations.
The report found that privatization would significantly raise residential customer bills by an average of $32 a month. The report also recommended the types of changes that would be required under a reformed contract with PSEG Long Island. Finally, the report identified that terminating the PSEG Long Island contract and directly managing LIPA assets was not only feasible but could result in savings of up to $815 million over the term of the agreement.
The LIPA Board directed LIPA’s CEO to pursue both a renegotiation of the PSEG Long Island management contract as well as planning for termination of the PSEG Long Island contract, with LIPA taking over direct management of utility assets, and to report back no later than March 31, 2021.