Listen to this articleThe Long Island Power Authority (LIPA) has awarded a contract for power and fuel supply management currently held by a PSEG affiliate to another firm.
The $20 million contract, which had been assigned to PSEG Energy Resources & Trade LLC since Jan. 1, 2014, was awarded to The Energy Authority (TEA) at LIPA’s board meeting last month, according to a memo from acting CEO John Rhodes. This is the first time in more than a decade that LIPA has contracted with a company other than PSEG for management services.
Jacksonville, Fla.-based TEA is a nonprofit controlled by six public utility companies. Its new five-year contract with LIPA starts at the beginning of 2026.
LIPA is still considering several power companies, including PSEG, that responded to its 2024 request for proposals for the much larger contract to manage the Long Island electric grid beginning Jan. 1, 2026, after the current $80 million contract with PSEG expires on Dec. 31, 2025. A LIPA spokesperson said that decision is likely to be made in March. A push to municipalize the management of the Long Island electric grid has since fizzled.
The Power Supply Management and Fuel Supply Management (PSMFSM) Services provider is responsible for procurement and supply of fuel, and the scheduling, dispatch, purchase and sale of the electricity produced by generating units under contract to LIPA. The work also includes scheduling of imports and exports over the interconnection of utilities controlled by LIPA and managing LIPA’s wholesale power supply requirements. In addition to handling day-to-day purchases and sales of power and power plant fuels, the PSMFM Services provider also manages LIPA’s hedging program that addresses volatility in commodity costs, according to the LIPA memo.
“Transitioning our power supply and fuel management services agreement to The Energy Authority reflects LIPA’s ongoing commitment to ensuring value and the best outcomes for our customers and electric system,” Gary Stephenson, LIPA’s senior vice president of Power Supply, told LIBN via email. “We are confident this change will support LIPA’s mission to deliver clean, reliable, and affordable energy while maintaining the high standards our customers expect.”
TEA beat out three other firms that responded to the LIPA RFP in August to win the PSMFSM services gig. TEA currently works with more than 50 public power clients nationwide, representing over 30,000 megawatts of peak demand and 24,000 MW of installed generation capacity across the U.S., according to its website.
In an email to LIBN, a PSEG spokesperson said: “PSEG has been LIPA’s Power Supply Management and Fuel Management Service Provider for the last ten years. We are proud to have saved LIPA customers millions of dollars each year over the life of the contract.”