The Long Island Power Authority has issued a request for proposals for a service provider to operate its electrical transmission and distribution system.
Besides day-to-day operations, the provider would be responsible for maintenance, emergency preparedness and response, customer service, billing and collection, and meter reading, according to a LIPA statement.
Since 2014, LIPA has contracted with PSEG Long Island, a subsidiary of Public Service Enterprise Group Incorporated, a publicly traded diversified energy company, for its management services, though the current contract with PSEG Long Island expires on Dec. 31, 2025.
“Our request for proposals is a crucial step in ensuring that we continue to provide clean, reliable, and efficient service while ensuring the best value for our customers,” John Rhodes, acting LIPA CEO, said in the statement. “By working together with our service provider, we aim to deliver superior service and sustainable energy solutions for Long Island and the Rockaways.”
LIPA’s service territory includes Nassau and Suffolk counties on Long Island and the Rockaway Peninsula in Queens, serving over 1 million residential customers and about 134,000 commercial customers. LIPA has historically contracted for most of the operations and management services and power supply and fuel management services used to operate the electric grid, however, some state officials have proposed that the services be municipalized instead of contracting with a private company.
“The release of this request for proposals represents a tremendous opportunity to build on the progress we have made for LIPA customers over the past 10 years while ensuring the best value for the operations services we seek,” Tracey Edwards, chair of the LIPA Board of Trustees, said in the statement . “By fostering competition, we are confident that we will secure the best possible outcome for our customers on Long Island and the Rockaways, allowing LIPA to continue to provide reliable, safe, and clean electric service.”
The new management contract would run for 10 years agreement, with a 5-year option to extend. The contract would include afixed portion of the management fee, an incentive-based portion of the management fee, and an at-risk portion of the management fee, subject to withholding if the Department of Public Service determines a major violation has occurred, according to the statement.
LIPAplans a three-phase evaluation process to secure a provider by the end of the year. It includes “the evaluation and satisfaction of specific threshold criteria toqualify a bidder, the evaluation of detailed proposals, and finally, further down-select and negotiating with asmall number ofthehighest-evaluated proposals competitively,” according to the statement.
Proposals and responses are due by Sept. 6. If a bidder other than PSEG Long Island is selected, LIPA’s aims to provide a one-year transition period to complete the handoff from PSEG Long Island to the next service provider by Dec. 31, 2025.
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