National Grid out; LIPA signs with NJ-based service provider

The Long Island Power Authority Board of Trustees approved on Thursday a contract with New Jersey-based Public Service Enterprise Group to manage the operations of the electric grid on Long Island.

PSEG will replace London-based energy company National Grid, which took over the contract  in 2007 after purchasing KeySpan.

Before the contracts between LIPA and PSEG become effective, approvals are needed from the Internal Revenue Service, the state Attorney General and the Office of the State Comptroller, officials said.

The current contract for utility services between LIPA and National Grid expires on December 31, 2013.

“National Grid and its predecessor have worked hard serving LIPA’s customers for the past 13 years,” said LIPA Chief Operating Officer Michael Hervey in a press release. “We thank them for their commitment and look forward to working with them toward a successful transition.”

According to a LIPA press release issued this afternoon, the new 10-year contract requires PSEG to create a “wholly-owned subsidiary on Long Island dedicated to LIPA and its 1.1 million customers.” PSEG is expected to assume the operation of LIPA’s system on January 1, 2014.

Some of the reasons why LIPA has chosen PSEG as the new service provider include offering the lowest cost and best value for LIPA customers, as well as committing to cost control, efficiency and customer satisfaction.

“Partnering with PSEG for the operation of LIPA’s transmission and distribution system under an improved business model provides the best value for our customers while also providing greater transparency and tighter controls of all activities and costs,” said LIPA Board Chairman Howard Steinberg.

LIPA has set up the website,, to provide updates about the transition with PSEG.

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