DPS LI Management and Operations Audit Report Released

On March 22, 2024, NorthStar Consulting Group, on behalf of the Department of Public Services LI, submitted to the Public Service Commission its “Comprehensive Management and Operations Audit of Long Island Power Authority and PSEG Long Island, LLC” report. It is 569 pages.

It states baldly in the Executive Summary: “Fundamentally it is not possible to outsource leadership for an enterprise.” This is a powerful indictment against the public-private model that runs our electric system.

It also reports: “At-risk compensation is not significant enough to change behavior and there is no incentive to improve efficiencies beyond established targets particularly at the operational decision-making level.” This means the current LIPA-PSEG contract is ineffective against a rogue contractor that flouts both the contract requirements as well as the law!

Here is a selection of some of the issues highlighted in the report demonstrating clearly that PSEG is:

• Making itself “the name and face of electric utility service in the LIPA service territory.”
• Not cooperating with LIPA
  • Delays in transitioning LIPA to a fully public utility
  • Making it hard to bring in a new 3rd party, if necessary
  • Thwarting CLCPA goals
  • Fully meeting on only 69% of performance goals, with 29% in Information Technology
• Demonstrating delays, cost overruns, poor planning, and execution of Information Technology programs:
  • System Separation, separating out PSEG systems so LIPA can fully manage the grid
  • Enterprise Asset Management System (EAMS), the management of the maintenance of LIPA’s physical assets
  • Customer Information System (CIS) Modernization
  • Outage Management System (OMS), which monitors power outages. Delays have put the electric grid at critical risk
• Not providing detailed information for LIPA to oversee PSEG LI’s Ethics and Compliance Program
• Incurring cost overruns

There are many more issues the audit reveals, but there are too many to report here. If you focus on the text in bold in the report you can get a good idea of the extent of the problems reported.