Long Island Power Authority files lawsuit against PSEG, citing failures of Tropical Storm Isaias

Citing their failures in handling the aftermath of Tropical Storm Isaias in August, the Long Island Power Authority has filed a lawsuit against PSEG-Long Island.

The complaint, filed in state Supreme Court Wednesday, seeks $70 million in damages for the utility’s failure to oversee storm management, including properly tracking the storm, securing adequate staffing levels to support power restoration, and properly communicating with and receiving complaints from the public.

“The facts set forth in this complaint tell a tale of corporate mismanagement, misfeasance, incompetence, and indifference, rising well beyond the level of simple negligence. The failures of the defendant were willful, in bad faith, and grossly negligent,” LIPA charges in the legal filing.

“PSEG Long Island has collected nearly half a billion dollars from Long Island customers over the past seven years while failing to meet its basic obligations,” LIPA chief executive officer Tom Falcone said in a statement.

Tropical Storm Isaias brought strong winds and heavy rain to the region in August. It caused extensive damage and in some cases, lengthy outages for thousands of customers on Long Island. State officials estimate 1.5 million New Yorkers lost power during and after the storm, including more than 5,000 customers on the North Fork.

The filing also says that in addition to poor storm management, the utility left its ratepayers without “critical information,” about power restoration as its system was inundated with calls. As a result of failures in their communication systems, LIPA reported that power restoration efforts faced days of delay since work crews were often sent to areas where no outages occurred. In the suit, the authority estimates that 28% of outage reports were false.

Aside from $70 million in damages, the suit also calls for the utility to improve and strengthen their communications systems in preparation for future storms.

Legal action against PSEG Long Island was one recommendation outlined following an investigation and report prepared by the state’s Department of Public Service earlier this fall.

Poor storm response has also led to calls for terminating LIPA’s agreement with PSEG Long Island. “I’m glad LIPA is going to Court to get ratepayers their money back,” said Rory Lancman, who was appointed special counsel for Statewide Ratepayer Protection. “We also need to ask the bigger question: can LIPA’s contract with PSEG Long Island be reformed to truly protect Nassau, Suffolk, and Queens customers; should LIPA find a new service provider; or should LIPA provide the service itself, either as a true public utility or a privatized one?” Mr. Lancman said.

Meanwhile, state officials announced Thursday that they would hold a series of virtual public forums on utility performance during Tropical Storm Isaias.

The hearings will be conducted by the Department of Public Service and Mr. Lancman in order to hear from ratepayers who suffered damages and harm as a result of their providers storm response. 

“The response by utility companies to Tropical Storm Isaias was nothing short of unacceptable and New York is fully committed to doing everything we can to ensure this doesn’t happen again,” Governor Andrew Cuomo said in a statement. “If utility operations are mismanaged, the customers are the last people who should be forced to foot the bill. We pay them for a service and clearly that service was not provided.”

In Riverhead, town officials may join in calling for enhanced oversight of the Long Island Power Authority and PSEG Long Island.

Councilwoman Catherine Kent asked town board members to memorialize their support for a bill introduced by Assemblyman Fred Thiele (I-Sag Harbor) which calls for the Public Service Commission to have more control over the utility company.

The bill, which passed in both the Assembly and state Senate in July, would enable the PSC to make recommendations in any audits that reveal fraud, abuse or mismanagement, as well as issue civil penalties against LIPA and service providers if they fail to comply with those recommendations.

According to Ms. Kent, East Hampton, Southampton and Brookhaven towns have all passed similar resolutions in support of the bill. “I think it’s always good to have more oversight with these utilities,” she said Thursday.

Southold Town Supervisor Scott Russell said Friday that “LIPA is filing a lawsuit for a company they selected to maintain the infrastructure for their own failure in response to Hurricane Irene and Sandy.”

He said he believes it’s a more systematic problem.

“Certainly, PSEG needs to be held accountable but, there is a history of poor responses over the years regardless of the contractor,” he said. “Suing PSEG may be a necessary short-term action, but what’s the game plan for the future? Suing is the easy part. Answering that question needs to be the priority focus.”

The Riverhead Town Board is expected to approve the resolution at its regular meeting Tuesday and Jodi Giglio, who will vacate her council seat at the end of the year as she takes office as a member of the state assembly, vowed to support measures for additional oversight in Albany, calling it one of her top priorities.

The hearings will be held based on region as follows:

Central Hudson
Thursday, Dec. 17 at 4 p.m.

Orange and Rockland
Tuesday, Dec. 22 at 4 p.m.

Con Edison
Tuesday, Jan. 5 at 4 p.m.

PSEG Long Island
Tuesday, Jan. 12 at 4 p.m.

The hearing notice and instructions for signing into the virtual hearing can be found at dps.ny.gov and entering case number 20-E-0586 in the case/matter number search box.