A tentative deal between LIPA and PSEG Long Island could keep the utility on Long Island until 2025.

LIPA and the power service provider reached the agreement Sunday. LIPA's CEO described the deal to News 12 as a pay for performance deal, which is seen as necessary after PSEG Long Island was criticized for its response to Tropical Storm Isaias. That storm knocked out power to more than 300,000 customers.

"I think this is a comprehensive acknowledgment that this wasn't what we hired PSEG to do. It's a comprehensive commitment that it will be better in the future and we're gonna stick to it," says LIPA CEO Thomas Falcone. "If they don't deliver, there are going to be penalties and there's nothing in this agreement that keeps the board from reconsidering their options in the future if they don't deliver."

If the new deal is approved, PSEG Long Island will be required to meet certain goals and timelines, strengthen its local management, pay $30 million in restitution for IT systems that failed, and cover the cost of spoiled food and medicine. In addition, the utility would have to donate to Long Island charities.

MORE: Ratepayers rally to demand LIPA pull plug on its contract with PSEG Long Island

Critics say this is a bad deal.

"PSEG has shown time and time again they mismanaged the storm," says Lisa Tyson, of Long Island Progressive Coalition. "They are mismanaging our system. I mean you are basically giving a contract to someone who has failed."

Daniel Eichhorn, president and chief operating officer, PSEG Long Island says, "PSEG Long Island is pleased that LIPA has made the best choice for our customers in retaining us as service provider. We are proud of our employees, their achievements and the improvements we have made since 2014. PSEG Long Island looks forward to continuing to serve Long Island and the Rockaways, improving system reliability and enhancing customer service while being an engaged and responsive community partner."