DPS – Long Island

Other Review Areas


Annual Reviews

Capital Expenditure Plans:

DPS LI will review proposed plans to make electricity infrastructure improvements that may be necessary to ensure reliability or meet new demand. DPS LI will review proposed capital expenditure plans.

Incentive Based Performance Metrics:

The Operations Service Agreement (“OSA”) between the Long Island Lighting Company d/b/a LIPA, a wholly owned subsidiary of the Long Island Power Authority, and PSEG Long Island (“PSEG LI”) established performance metrics to measure PSEG LI’s performance against operational and customer satisfaction goals. Pursuant to the LRA, the Department reviews PSEG LI’s report of its performance against the metrics in the OSA, relevant supporting data and information, and LIPA’s evaluation of the data, information and reports. This review will help identify whether PSEG LI’s performance entitles it to incentives and whether improvements need to be made. Staged Updates and Utility Debt Securitization

Authority (UDSA) Reconciliations:

DPS LI will provide on-going monitoring oversight of the Company's actual costs in relation to forecasts through updated filings in accordance with the direction provided in the recently concluded three-year rate proceeding. The filings will capture known changes such as: 1) savings resulting from the UDSA bonds, 2) costs of debt and current interest rates, 3) PSEG LI labor costs resulting from a new union collective bargaining agreement (CBA), 4) actual payments-in-lieu-of-taxes (PILOTs) on transmission and distribution property, and 5) unanticipated costs associated with changes in federal, state or local laws, or rules, regulations and orders.

Management Audits

On February 1, 2012, Governor Cuomo signed into law the Long Island Power Authority Oversight and Accountability Act (the Act). The Act requires a review and evaluation of the Authority’s overall operations and management practices that includes, among other things, an examination of overall efficiency, construction and capital program planning, the Fuel and Purchased Power Cost Adjustment, the annual budgeting process, debt service obligations and the Authority’s compliance with its debt covenants. Additional comprehensive Management and Operations audits shall be initiated at least once every five years.

The first DPS comprehensive management and operations audit of LIPA was issued in September 2013, and contained 83 recommendations. These recommendations are to be used by LIPA and PSEG LI to ensure an improved level of service to electric customers on Long Island.

The next DPS-LI management and operational audit of LIPA and its Service Provider will be initiated in 2016.

As Needed External Audits:

The LIPA Reform Act authorizes the DPS to review all books and records of the Authority and the Service Provider, interview all appropriate personnel to perform financial audits and examinations relative to utility rate changes, fuel clause operations, prudence reviews and state and federal tax changes.




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Other Review Areas updated: 03/22/2016 01:20:14 PM