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State Seeks $70M In Damages From PSEG Long Island For Tropical Storm Isaias Response

Thousands on Long Island remained without power nearly a week after Tropical Storm Isaias rocked the region.
Thousands on Long Island remained without power nearly a week after Tropical Storm Isaias rocked the region. Photo Credit: PSEG Long Island

Gov. Andrew M. Cuomo announced the Long Island Power Authority has filed legal action against PSEG Long Island for breach of contract and its performance in response to Tropical Storm Isaias. 

The complaint seeks $70 million in damages for PSEG Long Island's failure to adequately oversee outage management and communications systems from the Tuesday, Aug. 4 storm that affected more than 900,000 customers, the Governor's Office said.

The suit also claims a lack of business continuity plans that would have provided a failsafe option when key systems broke down. 

The filing is a direct result of the New York State Department of Public Service and LIPA's investigation reports issued in September and November and follows through with the Department's recommendation to the LIPA Board of Trustees.

"Utility companies are beholden to ratepayers, and when that service is inadequate - or as in this case, a complete failure -- those utilities need to be held accountable," Cuomo said. "Utility companies like PSEG Long Island get paid to manage the aftermath of a storm, and time after time they have failed to hold up their end. It's inexcusable, and we're going to make sure that it doesn't happen again."

In addition to the suit, LIPA is also asking the court to order PSEG Long Island to fix the systems to prevent future failures.

Peak outages affected approximately 900,000 customers. 

Cuomo had directed DPS to perform an expedited investigation into utility performance. In response, the department initiated an investigation into New York electric service providers' preparations and responses to the storm, as well as launching similar investigative efforts into telecommunication providers' services.

As a result of the investigation, the fastest ever conducted by New York's utility regulator, three of the state's largest utilities - Con Edison, Orange & Rockland, and Central Hudson - now face potential penalties totaling $137.3 million, with Con Edison and O&R also facing potential license revocation. 

All three will now be required to explain why penalties should not be imposed by the PSC for such apparent violations of the laws, regulations, and orders that are designed to ensure the safety and reliability of the electric system. PSEG Long Island was also the subject of the investigation, and numerous failures were identified by DPS, the suit said. 

In October, Cuomo also introduced new legislation to hold utility companies accountable to the residents that they serve. 

The new legislation would remove penalty caps for storm response violations, expedite the revocation process following repeated failures to provide safe and reliable service, and require the Public Service Commission to cap the amount of money ratepayers contributes to utility executive's salaries. 

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