By Ronald J. Rosenberg
Hearings are getting under way on a proposal to socialize energy on Long Island. It would make the Long Island Power Authority the region’s sole entity responsible for keeping our lights on. Its structure would replicate virtually every government agency, bureau or department that you have cursed as inept, incompetent or indifferent.
The hearings, by a special commission, are the result of legislation signed into law by Gov. Kathy Hochul. It directs the review of a plan to convert the existing public-private partnership that manages our electrical grid to one that would, in essence, make the governor ultimately responsible for its operation and maintenance.
To set the stage for these hearings, you need to understand that LIPA currently owns most of the Long Island electrical grid, including the bulk of our power plants. It has an incentive contract with PSEG Long Island, which actually runs the system. If PSEG does well and hits certain performance criteria, it is financially compensated. If it fails, it will take a financial bath. This is the essence of why capitalism is always better, and why it provides for more-efficient creation and distribution of goods and services than any government-controlled or socialized economy.
What is instructive about this forced march to complete government control is that these hearings were mandated by law to be held by the end of September, but are just beginning now. The government commission couldn’t even get its act together to hold them on time. Good thing it isn’t responsible for directing our electrical future.
Oh, wait. It is.
James Hanley, a fellow with the Empire Center for Public Policy, is a seasoned observer of Albany’s political stinkpot. “It’s hard to predict what will come of this proposal,” Hanley has written. “Public power (left wing) advocates clearly want to eliminate any role for a private utility in operating LIPA’s grid. They don’t have any evidence that LIPA could improve upon PSEG’s management; they seem to think the word `public’ is a magical incantation that will make everything better.”
In truth, it makes everything worse. An example? Which delivery service is more reliable, the government controlled U.S. mail, or the privately owned Federal Express? The answer is obvious.
Hanley has identified the ideological underpinnings of this power grab. It has little to do with the efficiency, innovation and accountability demanded of PSEG Long Island under a strict don’t-screw-up contract with LIPA. Rather, it is about a progressive agenda of growing government whenever it can, assuming authority over infrastructure that it has no competence running and operating costs it has no interest in cutting.
What makes this power play particularly toxic is that LIPA had been tasked with running the grid before. It failed, miserably, when Superstorm Sandy came ashore a decade ago. As a result, then Gov. Andrew Cuomo required LIPA to engage private industry in running the grid, and to use financial incentives and penalties that are employed in the real world. Having had such a raving success with cashless bail, today’s progressive powerbrokers seem quite content to ignore those lessons, and now seek the keys to the power grid.
How would that work? For starters, the people currently working for PSEG would probably be asked to transfer their skills and expertise to LIPA, a government entity. As LIPA employees, they would be given salaries, benefits and pensions that you and I would pay for. The LIPA management structure would balloon with executives making six-figure salaries. There would be no financial incentives for any of them to work smarter, better, more efficiently.
Compare that with a recent J.D. Power survey that found dissatisfaction with PSEG Long Island among businesses on the Island. That could mean a financial hit for the utility management company, because its compensation is directly tied to customer opinions of its performance. Were LIPA in charge, and faced with such a report, its response would undoubtedly be “Feh,” for there would be no accountability under a socialized structure. That would be good news for those who feast on political patronage, because one suspects someone’s brother-in-law would be in charge of consumer complaints.
We can assume that it will be Hochul’s decision as to whether Long Island’s power goes progressive. She needs to, but probably doesn’t, appreciate, or care, that if that’s the future of LIPA, her office number will be on speed dial for 2.7 million Long Islanders the next time a hurricane takes down the grid. And if last month’s elections proved anything, it’s that those LIPA customers vote.
Ronald J. Rosenberg has been an attorney for 42 years, concentrating in commercial litigation and transactions, and real estate, municipal, zoning and land use law. He founded the Garden City law firm Rosenberg Calica & Birney in 1999.