LIPA Has Signed One New Contract to Start in 2026, Others to Follow

In May 2024 LIPA issued a Request for Proposal for management of its grid starting in 2026, after the current PSEG-LI contract expires. John Rhodes, LIPA CEO, stated at the time that contracts for the various services might be divided among different companies, rather than lumped together under one contract with one service provider, as the PSEG-LI contract is.

So it was still with surprise that at the December 18, 2024 Board of Trustees meeting, Gary Stephenson, Senior Vice President of Power Supply, reported LIPA has signed a 5-year contract for fuel and power-supply management services with The Energy Authority (TEA), a not-for-profit organization owned by six public power utilities. This contract is estimated to be $20M.

Headquartered in Jacksonville, Florida, TEA provides public power utilities with access to advanced resources and technology systems so they can respond competitively in the changing energy markets. It will make sure all LIPA-contracted power plants get timely shipments of fuel, including natural gas and fuel oil, and the program includes a hedging program that helps offset volatility of power supply charges.

PSEG-LI is still in the running for the overall operations and management of the grid, but this contract seems to have been unexpected. And yet PSEG-LI suffers from poor residential and business customer satisfaction. Although parent company PSE&G of New Jersey has been in first place on the JD Power 2024 residential electric customer satisfaction survey among 18 large Eastern Region utilities, PSEG-LI is in 10th place.

This new contract, the first signed to begin in 2026, is a small, but significant step in the direction of loosening PSEG-LI’s hold on LIPA and it seems to have thrown PSEG-LI and PSE&G off balance.

Thank you, Mark Harrington, of Newsday, who put this news front and center.