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Michael Hervey -LIPA

August 17, 2012 @ 12:00 am EDT


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Mr. Michael Hervey, President of LIPA was our speaker this morning and he covered a lot of topics. He explained the considerations that LIPA was making when it came to the workforce that makes it all happen in the new contractor selection


But there were other options that LIPA had.

  • It could have become a true municipal power company
  • It could have continued with National Grid with a newly negotiated contract
  • It could select a new contractor


The issues that were involved with true municipal were concerns over the nature of the workforce and how that would be handled

As far as generation is concerned not much would change. LIPA would still have to buy the power from outside vendors.

They chose to select a new vender under what we could gather, was better financial terms. That vender turned out to be PSE&G (Public Service Power & Gas)


The transition is actually quite complex and much of the complexity is the workforce. Some of the workforce was dual purpose serving National Grid’s gas division and also the electric power division. None of the PSE&G people will be in the gas division. That will still be in the hands of National Grid. Then there is the issue of management PSE&G can absorb the union labor but the management will be theirs. It was not clear to us what would happen regarding the management employees.


Hervey talked about the “storm hardening” measures that have been taken. The system was upgraded to withstand winds of up to 130 MPH. There has been a considerable amount of new equipment to support that effort and Hervey claimed that LIPA’s readiness was credited with being the best overhead system in the state.


The renewable energy plan has been installing solar at train stations parking lots and other places. These systems are performing, according to LIPA’s Mike Deering, at about 30% higher than the projections when the plans were made. These installations are capable of recharging electric cars that are parked in the lots while introducing excess power into the grid. With the small number of electric cars presently, most of the power generated is going into the grid.


Another area where LIPA tells us they have been aggressive is energy conservation. The main benefit of conservation is the avoidance of building more capacity because more capacity means the commitment of resources for a long period.


There has been some relief in the cost of power. We have seen the cost of power rise considerably in the past 10 years, but now the there are more plants designed for gas, and gas has been at a low price. The lower generating costs are being seen in our bills. The long term prospect for having low cost for gas seems to be pretty good.

We do not benefit from the low cost of Hydro-power from Canada because we simply do not have an energy trunk that can handle the power we need. The Governor has been working out the obstacles to moving that power to lower New York State and that would include Long Island.