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Isaias: PSEG To Forfeit $10M Incentive Bonus, Altice Could Also Face Penalties

Thousands on Long Island were left without power on Long Island as PSEG crews continue making repairs.
Thousands on Long Island were left without power on Long Island as PSEG crews continue making repairs. Photo Credit: PSEG Long Island

PSEG Long Island’s response to Tropical Storm Isaias will cost the utility company millions as New York Gov. Andrew Cuomo threatens to revoke its license to operate.

Cuomo announced that PSEG will forfeit nearly $10 million in incentive compensation following an investigation by the state’s Department of Public Service into New York utility companies’ responses to Isaias.

Cuomo's office has also threatened to terminate PSEG’s contract with LIPA if “the investigation deems it appropriate.”

PSEG was cited for a “failure of its outage management system, inaccurate communications, and problems with its call center.”

As part of the investigation, the Department of Public Service is also calling on PSEG to forfeit its 2020 incentive compensation of approximately $10 million as a first step of the investigative process.

PSEG Long Island should use those millions, the state says, toward compensating families and small businesses who lost food and medicine as a result of the extensive outages, which the company agreed to do.

Officials are also ordering utility companies statewide to take corrective actions that include:

  • Add crewing capacity via retainer contracts from private contractors or utilities located outside of New York, with a goal to be able to secure in advance of a storm and be able to double the level of internal linemen and tree crews;
  • Test capabilities at all command centers, call centers and back-up command centers to ensure capability to handle an event that affects 90 percent or more of their customers in their service territory and provide confirmation back to the Department regarding the results of this test within 10 days;
  • Refine coordination plans with municipalities tailored to each county (road clearing, local liaisons, etc.) and provide to the Department within 20 days a written confirmation from each county Emergency Operations Center that they understand and accept the plan; and
  • Update life support equipment and critical infrastructure lists to remove or add customers as identified during Tropical Storm Isaias and file such updated lists to the Department within 10 days.

The Department of of Public Service also found several potential violations related to Altice-owned Optimum's storm response on Long Island, including a failure to coordinate an emergency response with local officials, communications failures, and insufficient generator capacity for their network.

The Department’s letter demands that Altice-Optimum promptly remedies the issues and provides notice that the investigation will include a review of whether the company is in violation of a 2016 order approving its acquisition of Cablevision.

"The response to tropical storm Isaias by the electric utilities was completely unacceptable. Fifteen days later and we are still hearing complaints from families and businesses,"  Cuomo said. "With many weeks remaining in the hurricane season, we do not have the luxury of time — utilities must act immediately to fix their broken storm response apparatus, and the Department of Public Service must act more swiftly to hold utilities accountable. 

“DFS will help DPS on this investigation because I want a faster and more thorough investigation than they've done in the past, Cuomo continued. “I am also going to propose legislation to facilitate, expedite, and clarify the process for a utility to lose their franchise.

“These utility companies predict when we're going to have storms and when we're going to have emergencies - that's the art form of the business and what we pay them for. They need to do better and we are holding them accountable."   

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