State Takeover of Utility Companies is a Bad Idea

Date Posted: 
Monday, February 15, 2021
The IBEW Utility Labor Council of New York State is opposed to Senate Bill 2852, introduced by Senator Leroy Comrie. This legislation directs the NYS Public Service Commission to conduct a state funded study on the feasibility of transferring ownership of utility companies over to New York State. This ill-thought-out piece of legislation is now in the Finance Committee and it needs to stay there.
This legislation, while well intended, creates more problems than it solves. First, both the IBEW and UWUA Local 1-2, represent employees at the New York Power Authority (NYPA). Getting results from NYPA management has been troublesome. Recently, the NYPA workforce went 4 years without a contract, negotiating with Cuomo's hired gun Joe Bresse. In 2019 NYPA agreed to an extended contract to avoid a second collective bargaining impasse. They did this under the pressure's of dealing with a sometimes-hostile political bureaucracy. Historically, there has been a very tenuous relationship between state-run NYPA and its dedicated and skilled organized employees, who have found it difficult to negotiate a contract with a government run power authority. If all the utility employees worked for a NYPA-like entity, the ability to collectively bargain would be a nightmare. Bargaining not only pertains to wages and benefits, but also addresses work rules, overtime, storm response and safety measures. The situation has become so bad over the years that both unions have sought binding arbitration.
Second, S. 2852 will create a massive amount of debt for the State. In 1986, Long Island Lighting Company (LILCO), a private company with private shareholders and bondholders was taken over by the Long Island Power Authority (LIPA). Long Island rate payers know that the money borrowed by LIPA to pay LILCO for their assets has led to power bills that are among the highest in the nation. All utility consumers across the state will face massive increases in their power bills should the state take over these utility companies.

Third, while the storm response by some utilities have been poor at times, they are still held accountable to the NYS Public Service Commission (PSC). When Con Edison, PSE&G or National Grid fail to provide service, they are penalized and required to make corrections to operate. If a government run power authority were to fail to provide service, where is the incentive to make corrective action?

Lastly, the PSC would be charged with conducting the study. We question if the PSC has the staff, expertise, or funds to complete this task. If there is anyone who understands how the PSC operates, it is us here at the IBEW Utility Labor Council of NYS. We know the job because we do the job.
Lawmakers and consumers have said that the NYC MTA has been mismanaged, overspends, and under performs. If that is accurate, do we really want to put the state's utility services in the hands of an MTA-like entity?
This bill would create a government run monopoly. It was not too long ago that the government broke up the utility industry to avoid that situation. IBEW and UWUA Local 1-2 represent 22,500 Utility workers across New York State. We urge you to understand the ridiculousness of this bill. Simply said, this bill is pandering and showmanship. We urge the legislature to draft urgent legislation that requires utility companies to hire more staff, upgrade infrastructure, and fund preventative maintenance. That will improve service, plain and simple.