Profile: PSE&G’s Main Man at the Long Island Power Authority

David M. Daly faces familiar challenges at LIPA -- improve customer satisfaction, boost reliability, and speed restoration

david daly pse&g
Name: David M. Daly

Title: President and chief operating officer of PSEG’s Long Island LLC, a subsidiary of Newark-based Public Service Enterprise Group.

Age: 52

Education and experience: Daly has an electrical engineering degree from the State University of New York Maritime College, and a master’s degree from Rutgers University. He has been with Public Service Electric & Gas, the state’s largest utility for 30 years. Much of his career has involved managing the utility’s infrastructure.

Hometown: Keyport, but moving to Long Island.

What he does: Daly has the big job of improving customer satisfaction and reliability of the Long Island Power Authority (LIPA) electric system, which came under intense criticism following Hurricane Sandy, where some customers were left without power for up to two-and-a-half weeks. The authority’s experience during Hurricane Irene was not much better.

Why it is important: In 2011, PSEG was awarded 12-year contract to manage LIPA’s electric transmission and distribution system, which serves about 1.1 million customers, about half the number that PSE&G serves in New Jersey. Daly has been leading the transition for the past two years. It begins operation of the system in Long Island in January 2014.

Why it is important for PSEG: In 2014, the Long Island contract is expected to contribute 3 cents per earnings per share to the company’s profits, and grow to 7 cents and 8 cents per share in 2016. This is expected to occur despite a three-year rate freeze imposed under the contract.

What he knows about Long Island: Daly, who has been out there two years assessing the condition of the LIPA system, says there are a lot of similarities with PSE&G customers. “They are very environmentally conscious; they value their natural resources; and there is a lot of volunteerism.’’ But they want a lot of improvement in reliability.

His big challenges: There are three. The first is improving customer satisfaction, which has dropped to very low levels in the wake of Hurricane Sandy and other recent storms, as Daly concedes. The second is achieving a higher level of reliability, which Daly said LIPA met during normal times, but failed to during extreme weather. Finally, Daly said the company needs to improve its storm restoration efforts — so customers will not be out of power for extended lengths of time.

How he solves them: Daly has brought in an 18-member senior leadership team to help implement the changes necessary to achieve his goals. “It’s a little bit of technology and best-in-class utility practices,’’ he said. He plans to borrow practices from PSE&G, which has been ranked as the most reliable utility in the country for five of the past eight years. “Better management , improved technology, and finding efficiencies about the process,’’ Daly said.

What he’s found in two years out on Long Island: The fundamental infrastructure assets — the distribution and transmission lines — are in good shape, Daly said. What LIPA has failed to do involves poor tree-trimming practices, which cause many power outages during storms, a lack preventive maintenance efforts at substations, and not spending enough replacing wood poles holding up utility lines, according to Daly.

What else will help: LIPA also is committed to reducing demand on its power system by promoting the increased use of renewable energy systems, an expanded program of energy efficiency initiatives, according to Daly. It also endorses the use of demand-response programs, which curtail electricity consumption at times of peak demand by industrial customers.

Why he is passionate about this: “This is a job I have been preparing for my whole career. It is a tremendous challenge and responsibility. They are anxious for change,’’ Daly said, referring to the 1.1 million LIPA customers.

Personal: Married for 29 years, with three children, two girls and a boy.

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