Long Island Legislators Unveil Push for Public Power, With Union Nod to Labor Provisions

A new bill to municipalize Long Island’s utility includes key worker protections that the union had sought.

Julia Rock   ·   February 16, 2024
Morning scenic of a power line field in Suffolk County, Long Island, NY.
A new bill would set up the first full public takeover of a major utility in decades. | Joan D Squared

Correction: This story was updated to clarify the International Brotherhood of Electrical Workers local 1049’s position on legislation to municipalize the Long Island Power Authority. The local endorses the bill’s protections for its workers, is receptive to its advantages, and believes it is “unlikely to adversely affect our members” — but still prefers the utility’s current public-private structure.

When Tropical Storm Isais hit New York in 2020, Long Island’s utility left tens of thousands of customers without power for a week. The botched response revealed longstanding issues with the utility’s unique structure — publicly owned, but privately managed — and Long Island legislators embarked on an extensive study of its operations. In January, they unveiled their solution: a full public takeover of the utility.

And their legislation includes provisions that have mollified a key constituency. The union that represents the utility’s approximately 1,500 employees says that while it prefers the utility’s current public-private structure, it nevertheless endorses the bill’s inclusion of bolstered protections and rights for their workers, bucking a national trend of union opposition to public power campaigns.

The bill’s success would set up the first full public takeover of a major utility in decades, after a wave of failed campaigns in Maine, California, and Colorado, all of which lacked support from the utilities’ workers.

The Long Island Power Authority, or LIPA, serves 1.2 million customers in Nassau County, Suffolk County, and the Rockaways. It’s a public authority, but it outsources operations to a private contractor. It pays the New Jersey-based Public Service Enterprise Group, or PSEG, $121 million each year to manage utility operations, handle customer service, ensure reliable service, and prepare for and respond to emergencies.

The structure is the only one of its kind nationally, perhaps for good reason: It’s expensive, inefficient, and invites mismanagement, a bipartisan legislative commission found last year. Cutting out the middleman would save customers more than $500 million over the next decade, the commission estimated.

In January, LIPA commission co-chair and Long Island assemblymember Fred Thiele introduced legislation to do just that. The bill’s supporters hope to make power on Long Island more affordable, reliable, resilient during storms, and — critically — democratic.

“The biggest selling point is a public utility controlled by Long Islanders themselves,” Thiele told New York Focus.

The International Brotherhood of Electrical Workers local 1049, which represents LIPA workers, had previously strongly opposed a public takeover. But the legislation includes key provisions the union had sought — workers would keep their existing retirement plan and remain private sector employees, and the union would get a seat on LIPA’s board and a spokesperson told New York Focus the local is amenable to the bill.

IBEW Local 1049 is dedicated to protecting our members and remains committed to prioritizing their current benefits and wages,” Jerome Bost, the local’s Director of External Affairs, said. “While we believe our existing structure may provide the best protection, we are receptive to the potential advantages of the current legislation, which appears unlikely to adversely affect our members.”

The Long Island Power Authority was formed in 1986 to replace its investor-owned predecessor, the Long Island Lighting Co., as part of then-Governor Mario Cuomo’s crusade to shut down the utility’s Shoreham nuclear power plant. (The plant never opened, and Long Island customers are still paying for the $6 billion project in their utility bills.) But LIPA still doesn’t operate as a public utility, and it has tasked PSEG with running the grid since 2013.

After Isais, former Governor Andrew Cuomo threatened to revoke PSEG’s license, saying he was “as serious as a heart attack.” The authority set up a task force to investigate the storm response. It found that PSEG’s brand-new customer service system had failed during the storm, making it difficult for the utility to keep track of outages and customer requests.

“We are definitely NOT prepared for [a] weather event,” a PSEG manager on Long Island had written in an email about the new system before Isais. (It’s not the only time software bugs have plagued New York utilities.) The tech issues were exacerbated by PSEG’s organizational structure, which, the task force concluded, “diffuses accountability for critical business functions.”

“There’s this momentous opportunity to transform this entity that was supposed to have been a fully public utility anyway.”

—Michael Menser, Nassau County resident

After LIPA sued PSEG and renegotiated its contract, Cuomo, some legislators, and local environmental and progressive groups sought a more radical change for the utility. So in 2022, the legislature set up a commission to study the feasibility of making LIPA fully public.

Initially, the utility workers’ union resisted a public takeover. It worried that new management could threaten the benefits they’d won through rounds of contract negotiations. Becoming public sector employees also has legal downsides: Public workers in New York can’t legally strike, and, since the 2018 Supreme Court case Janus v. AFSCME, public sector unions can’t require members to pay dues.

“We strongly oppose LIPA becoming a fully municipalized public utility,” the union’s business manager Pat Guidice wrote in a Newsday op-ed in September, noting that “changing LIPA workers to state employees will not sufficiently safeguard the hard-earned benefits and pensions of our members.”

The commission worked to come up with a proposal that would win the union over. “Preserving the rights, benefits, security, and privileges that 1049 workers have negotiated for over all of these decades — preserving that was our North Star,” Rory Lancman, the executive director of the LIPA commission and a former state lawmaker, told New York Focus.

In November, after months of public hearings and stakeholder consultations, and with bipartisan support, the commission published its final report and a proposal for legislation, which was later taken up by Thiele. The report concluded that a public takeover would improve accountability for the utility’s storm responses and eliminate costly inefficiencies.

“The rates paid by LIPA’s customers are among the highest in the nation, and overall, ratepayers have a low level of satisfaction,” the report concluded. While rates are partly determined by the price of natural gas, the commission found that a public takeover could save customers $50 to $80 million each year, primarily by eliminating expensive PSEG management roles.

The report also emphasized that it was “critically important” to retain the utility’s existing non-management workforce — the 1,500 IBEW members — along with their “extensive institutional knowledge” of LIPA’s operations.

Thiele’s bill includes a legal maneuver that would retain workers’ private sector status by preserving the corporate subsidiary that currently employs them, thereby preserving their right to strike.

“Preserving the rights, benefits, security, and privileges that 1049 workers have negotiated for was our North Star.”

—Rory Lancman, LIPA commission executive director

The bill also proposes an overhaul of the utility’s governing board. The board is currently controlled by the governor’s appointments, but under the new structure there would be no governing majority. Five government bodies would get two appointments apiece: the governor, Senate, and Assembly on the state level, and Nassau County and Suffolk County on the local level. The mayor of New York City would get one seat. A new Community Stakeholder Board — made up of 26 ratepayers appointed by the legislature, and paid a stipend — would also get a seat, as would the IBEW 1049 itself.

“A key consideration for us is the potential for the National Labor Relations Board to maintain jurisdiction through state legislation, a scenario we view as more favorable than protection under the Public Employees Relations Board of New York State,” Bost, the union official, told New York Focus.

“We are also highly encouraged by the inclusion of a provision in the legislation for a voting board seat for the Business Manager of IBEW 1049,” he continued. “This is a measure we advocated for and are grateful to the LIPA Commission for supporting this. We endorse a plan that ensures these protections for our members.”

Public power has gained momentum in New York and across the country in recent years, as campaigners seek more democratic control over the energy transition — but utility workers have overwhelmingly opposed these efforts.

In November, Maine voters rejected a ballot measure proposing a state takeover of two private utilities. In San Diego, campaigners are trying to get a public takeover on the November ballot. In New York, Rochester residents are seeking a public takeover of their private utility. All three efforts have faced staunch opposition from utility worker unions.

Last year, the state legislature passed the Build Public Renewables Act, granting the state’s public power utility authority to construct and own renewable energy projects, without the IBEW’s support.

A public takeover of LIPA could also influence how the authority addresses the energy transition. Thiele’s legislation does not prescribe any particular climate policy for the utility, but Long Island progressives see it as an opportunity to exercise more democratic control over a clean energy agenda.

Michael Menser, a climate resilience planner and Nassau County resident, served on the LIPA commission’s advisory committee. He witnessed the “really bad scene” during PSEG’s response to Isais. “My neighbor’s lawn was catching on fire, and the trucks were at the wrong houses, and it was COVID, and it was hot,” he recalled. “And then there’s this momentous opportunity to transform this entity that was supposed to have been a fully public utility anyway.”

“The biggest selling point is a public utility controlled by Long Islanders themselves.”

—Fred Thiele, Long Island assemblymember

Asked how a fully public LIPA should approach climate planning, Menser pointed to the Long Island Solar Roadmap, a plan from the Nature Conservancy and other entities, including PSEG, to promote solar deployment. That plan is also backed by the Long Island Progressive Coalition.

“We already have some community plans that have been identified,” said Ryan Madden, the coalition’s climate campaigns director. “Why isn’t the utility following through?”

LIPA plays a key role in offshore wind development near Long Island and has historically been friendly to developers of those projects. The lobbying group for the developers, the Alliance for Clean Energy (ACE) NY, and a pro-offshore wind coalition, the New York Offshore Wind Alliance, will not be taking a position on the legislation, according to a spokesperson for ACE NY.

There’s a ticking clock on the public power push: PSEG’s current contract expires at the end of 2025, and lawmakers want to execute a takeover before then.

“The biggest challenge” in passing the bill will be “the fact that PSEG wants to keep the contract,” Thiele said. “They have lobbied rather aggressively to do that.”

Newsday reported that PSEG held private meetings with Governor Kathy Hochul and other top state officials last summer. It also spent more than $60,000 lobbying Long Island legislators on “commission testimony” and “utility regulation” in the second half of last year, according to state lobbying records. Hochul has not taken a position on the legislation, and her office did not respond to a request for comment. The current LIPA board hasn’t taken a position on the proposal either.

The powerful Long Island Association, a business lobbying group, has staunchly opposed the public takeover. The group commissioned its own report, from the investment bank Lazard, on fully privatizing LIPA. (Its president, Matthew Cohen, was a top LIPA official before joining the Long Island Association.)

Thiele’s bill is co-sponsored by four other Democrats from Long Island and Queens.

The legislation also needs to win support in the Senate. State Senator Kevin Thomas, the other LIPA commission co-chair, has not yet introduced the bill in his chamber but is expected to do so. (Thomas did not comment for this story.)

Another Democratic senator on the commission, James Sanders Jr., from Queens, told New York Focus he is looking forward to a “healthy discussion” on the bill but declined to endorse it.

“My district was hit hard by Sandy,” Sanders said. “So I will judge much of this by how we’re getting ready for the next Sandy.”

Julia Rock is a reporter for New York Focus. She was previously an investigative reporter at The Lever.
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