A lengthy search for a replacement for PSE&G as the manager of Long Island’s power grid concluded unexpectedly on Thursday, granting the company an annual extension of $80 million.
The Long Island Power Authority (LIPA) has forged a new agreement and opted against a competitive bidding process after it was revealed that board member John Rhodes and his spouse had financial interests in Quanta Services.
Rhodes and his wife owned as much as $120,000 in stock in Quanta until December 2024.
Rhodes advocated for Quanta, one of PSE&G’s two finalists, citing superior safety metrics and a marginally better customer satisfaction score.
However, skepticism arose among LIPA’s board members.
Critics highlighted concerns related to Quanta’s management of Puerto Rico’s electric grid.
During a review of an April recommendation, LIPA’s board discovered the previously owned stocks and subsequently rejected Quanta’s bid with a 6-1 vote. Interestingly, Rhodes had divested from the company just four months earlier.
“John Rhodes does not own any shares in Quanta Services, Inc., having owned and sold them in 2021 after identifying those holdings in December 2024,” according to reports.
On Thursday, the board decided to abandon the selection process entirely, opting instead to extend PSEG’s $80 million yearly contract.
This current agreement includes an option for a five-year extension, although the specific duration remains undetermined.
PSE&G has been managing Long Island’s power grids since 2014 but has faced increasing scrutiny over its performance, particularly after a tropical storm in 2020 left many residents without power for days.
This led to a restructured contract in 2021, which tied PSE&G’s $40 million compensation to various performance benchmarks, including reliability, storm response, and customer satisfaction.
