Damianos: Track records would be illuminating in LIPA’s choice of power grid bidders

April 17, 2025 - Long Island Business News

It was not so very long ago that Long Island was debating whether running our electrical grid should be municipalized, thereby turned over to an authority with government employees who would be tasked with keeping the lights on.

After contemplating the implications, the decision was made to keep the structure as it is. The Long Island Power Authority (LIPA) contracts with a company that has the necessary experience and expertise to do the job.  Key to this structure is the word “accountability.” Failure to meet specific performance milestones results in financial penalties.

Now, Long Island finds itself at yet another energy crossroads. LIPA trustees are considering whether the current service provider, PSEG Long Island, should be retained to continue their role of running our grid as well as introducing innovations designed to keep pace with our state’s energy polices and our insatiable demand for more power. Their competition is Quanta, a Texas-based company whose experience in running a similar regional electrical grid is through their subsidiary called LUMA.

Much like our previous examination of proposed municipalization of the grid, Quanta’s LUMA performance needs to be carefully scrutinized, its current customers surveyed and its efforts at innovation, reliability and regulatory compliance measured against PSEG Long Island’s track record. In doing so, there should be no “hometown” advantage applied to one or the other, but a dispassionate analysis of their respective performances.

With that as the criteria for comparative reviews, we need to appreciate that Quanta’s LUMA is responsible for running the electrical power grid in Puerto Rico. And that is where LIPA’s trustees must study the actions of what would be their mirror organization on that densely populated island, the Public-Private Partnerships Authority (PPPA). In a news story published by a Puerto Rico media outlet, the authority is quoted as citing LUMA for “blackouts, lack of maintenance, failure to maintain the balance between energy supply and demand within the system, and lack of cooperation with the government to oversee its performance.”

But what is more alarming is that additional news coverage suggests PPPA is seeking to revoke LUMA’s contract for what is essentially non-performance, prompting thousands across Puerto Rico to purchase costly back-up generators to ensure their homes or businesses aren’t plunged into darkness because of the unreliability of LUMA’s work.

One has to wonder if its parent company, Quanta, is even remotely monitoring the performance of its subsidiary when, in a report to Wall Street analysts, they state, “LIPA bid offers a compelling proof of concept….(and they) see LIPA award as a key positive ahead; affirms (Quanta’s) credentials as grid service provider after running LUMA in PR.”

That is a stunning suggestion to their investors and a cautionary message to Long Island. Running Long Island’s electrical grid is not a “compelling proof of concept.” It is a 24/7 performance driven mandate. Even more disturbing is the idea that they believe their tenure in Puerto Rico “affirms (their) credentials.” It would appear they are deliberately ignoring calls by their Puerto Rico client to cancel their contract and neglecting to mention that their “PR credentials” include losing the entire island’s electrical grid on New Year’s Eve. It must have been a memorable blackout for 3.2 million people.

PSEG Long Island’s tenure as custodians of Long Island’s energy system has not been faultless with IT issues during Hurricane Isaias. They have paid financial penalties for those missteps as per their LIPA agreement. In response, PSEG LI is focusing on strengthening their technology to keep customers updated on recovery progress when storms bring down trees and damage the grid.

One can safely assume that LIPA trustees know what Long Islanders think about their electrical grid because we aren’t shy about voicing our opinions. It would be in everyone’s best interest for LIPA to ask Quanta’s Puerto Rican customers what they think about their experiences as it may well shed valuable light on who should manage our energy future.

By: X. Cristofer Damianos