Crews work to lay new lines in Astoria. Attorney General Eliot Spitzer offered testimony last week pointing to his 1999 report about the large-scale blackout in Washington Heights, which stated that the Long Island City network served the most customers and carried the highest maximum load. Feeder cables in that network also failed during that blackout, Spitzer said, leading him at the time to recommend an evaluation of its infrastructure. “Thus, Con Ed was on notice seven years ago that this network was teetering on the edge of failure and needed to be upgraded,” Spitzer said in his testimony. A recent New York Times article showed that the Long Island City network experienced the more service interruptions than any other during the last two years. It has consistently been in the top four worst performing Con Ed networks since 2000, the article stated. A report Con Ed released in response to the blackout showed that many components in their system were decades old, some more than 60 years old. Con Ed engineers are still examining the broken equipment to determine the causes of failure, but company officials were quick to say that age was not necessarily a factor. In the next six months, Con Ed plans to replace a large portion of the Long Island City network that was damaged during the blackout, including more than half of the secondary mains. The company will also expedite existing plans to add more vented manhole covers and solid dielectric cables in the region, both of which should decrease the risk of system failure. The Watch Dog Blame has also fallen on the New York Public Services Commission, the agency charged with overseeing Con Ed and other utilities, for not keeping a closer eye on the company’s maintenance record. Spitzer said he was concerned that the PSC commissioners have little or no experience in either energy of telecommunications, “the very matters that the PSC regulates.” Other politicians have questioned the board’s actions after the 1999 blackout – which, they say, let Con Ed off the hook to easily – and some have even asked for federal monitors to intervene in the examination of last month’s incident. “The PSC is supposed to be exerting some influence over [energy utilities], but they have been very lax under this administration,” said Assemblyman Mike Gianaris (D-Astoria). Some energy experts contend it’s not the PSC that needs to be improved, but the very regulation system it enforces. The PSC evaluates Con Ed and other energy utilities with several performance indicators, which each company determines and submits in a series of reports each year. If the company misses certain predetermined standards – in terms of reliability, repair time, etc. – than it suffers financial penalties in the form of customer rebates. These rebates are applied when Con Ed requests a rate increase, getting deducted from the projected new revenue the company hopes to earn from customers, essentially lowering the amount of any price hike. For each network shut down in the five boroughs, the company must give a $5 million credit to customers, capped at $10 million per year. In practice, however, these penalties are relatively very low in comparison to the overall rate negotiations, said Gerald Norlander, an analyst at the Public Utility Law Project. In 2005, when Con Ed last received permission for a rate increase, it settled for a $1.5 billion rise in revenue, making several million dollars almost negligible, he said. This system encourages energy transmission companies to cut corners on maintenance, because they can save more money than they risks losing on the rate reductions, officials said. Since rates are frozen for long periods of time – in Con Ed’s case, from 1994-2005 – shrinking maintenance costs is one of the few ways to grow the bottom line. “For every dollar you don’t spend, you keep it, and it goes to profit,” Norlander said. “The more you cut, the more you make. The question is: did they cut too much?” Kramer said that as these blackouts become more frequent, he expects the PSC to become more involved in regulating energy companies. “It was sort of a wake-up call,” he said. Anne Dalton, a PSC spokeswoman, said it was not the role of the commission to make management decisions for the companies it regulates – the utilities themselves must be responsible for their day-to-day operations. The commission would likely look into its own practices, as it has in the past, she said, to find ways to improve service. “Our core mission to ensure safe and reliable service at just and reasonable rates,” Dalton said,” balancing system needs against the cost to maintain it.”

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