LIPA’s Superstorm Sandy Performance Draws Third World Comparisons

Posted on November 13, 2012

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Shades of déjà vu.  In the wake of the 2010 “Snowmageddon” blizzard in the Washington DC area, Pepco was thoroughly blasted for their poor performance in maintaining and restoring electrical power, but that didn’t lead to any great improvements for 2011 or 2012.  The Maryland Public Service Commission fined Pepco a million dollars for their poor performance, and Pepco turned around and tried to pass their legal costs off to their customers.  For all the chastising about how they have been handing out checks to their shareholders while letting their infrastructure rot, nothing seems to have changed.  For obvious reasons, Pepco-bashing and Pepco-fining has rightly turned into a consumer and legislative sport around here.

Well, the Long Island Power Authority (LIPA) has signed themselves up to become the next public punching bag.  Governor Cuomo plans to haul them in before regulators to explain why it’s taking so long to restore power to so many customers… and they might start with this little detail:  union interference.  As Mark Harrington reports in Newsday, LIPA’s requests for assistance from out-of-state utilities came with a little condition attached:  the assisting companies would first have to contact the local electrical union so that inbound workers could be signed up as union members before they arrived.  Harrington writes:

Barry Moline, executive director of the Florida Municipal Electric Association, said Long Island could have received 125 additional workers from utilities across Florida as soon as two days after the storm if a dispute about the letters had been resolved sooner. He said most of the crews from Florida who were available were nonunion and refused to join Local 1049 of the International Brotherhood of Electrical Workers, even if only temporarily. IBEW Local 1049 represents some 2,000 National Grid workers contracted by LIPA.

Seriously, LIPA?  You have hundreds of thousands of customers in the dark and cold, and your priority is unionizing temporary workers who are coming in to help you with your emergency… and you allow union concerns to delay an emergency response?  Does no one at LIPA see the problem here?

And that’s not LIPA’s only problem.  Much like Pepco, LIPA has long known that it was unprepared for a storm like Superstorm Sandy.  Their slow, uncoordinated response and lack of basic repair materials has drawn third-world comparisons.  While some point to LIPA’s lack of company smartphones or tablets, I was more concerned about the fact that their power-outage management system still resides on a 25-year-old mainframe computer.  Now, I am a big advocate of being able to do things the old-fashioned way in case of catastrophic technological failures, but there is no excuse for setting oneself up for those failures in the first place.  Just like Pepco, LIPA allowed its infrastructure to languish and rot, rather than investing in good maintenance and equipment updates and upgrades.

Sadly, I don’t have a lot of faith that LIPA will do any better at fixing their problems than Pepco has, and the underlying problem is one of monopoly.  When a major company has captive customers… customers for whom they are the only choice… where is the incentive to spend what they should on the hidden, tedious, difficult job of maintenance and technical upgrades?   Where is the incentive to come down on the side of their customers, rather than on the side of their own greed or sloth?

I’m all for keeping things like utilities in private hands.  I don’t want the government’s rules and inefficiencies creeping into my cable TV or – God forbid – my Internet access.  But  the weakness with our patchwork of private companies across the US is that each is a local monopoly unto itself, and that creates these pockets of apparently third-world service standards… as we have seen in Pepco’s Maryland, and now in LIPA’s Long Island.

Some folks love to argue in favor of deregulation.   Laissez-faire, let the markets dictate, hey, whatever.  Well, that does not work so well with monopolies, which dictate to the market more than the other way around.  The consumer wants or needs a service and is made to put up with high prices for little in return.   We have seen where this has gotten us in other areas as well (Wall Street… airlines…).

Pepco, and now LIPA, are real-world arguments in favor of regulation to protect consumers by forcing companies to do the right thing: provide the service they are being paid to provide.  The government wouldn’t even notice or care about Pepco – or LIPA – if the power stayed on, was restored quickly, and rates were reasonable.  What draws the ire of consumers and the wrath of regulators is spectacular and repeated failure.  Pepco and LIPA have put themselves under the microscope.  If Pepco is any indication, Long Island residents should be prepared to see a lot of hairy stuff through that lens… and to limber up for many sessions of LIPA-bashing.

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