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LIPA set for overhaul after storm criticism

Long Island Power Authority customers in the Rockaways will not have to deal with the darkness dealt by the utility company if the governor's plan to privatize comes to fruition.
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The utility company charged with lighting Long Island and the Rockaways is reaping the consequences of its highly criticized handling of electrical outages caused by Hurricane Sandy.

Gov. Andrew Cuomo announced legislation this week transforming the Long Island Power Authority in an effort to improve service, stabilize rates, strengthen emergency response and privatize utility operations.

Thousands of residents in the Rockaways remained without power months after the superstorm hit, and much of the blame was attributed to LIPA for its antiquated equipment and disorganization.

“The aftermath of Superstorm Sandy made it undeniably clear that the LIPA status quo was unacceptable and that we needed to create a new Long Island utility system,” the governor said. “Today’s proposal will transform the utility service on Long Island by ending LIPA as we know it and creating a new structure that is designed to put ratepayers first by prioritizing better customer service, reducing the cost of debt, and placing the new utility under strong oversight.”

Cuomo’s proposal would shift LIPA’s day-to-day operations over to Public Service Enterprise Group, a private utility based in New Jersey. The governor’s plan eliminates the old structure by giving PSE&G full authority to manage daily operations including budgeting, operation and maintenance of the utility system, storm preparedness and response, infrastructure improvements and energy efficiency activities.

The October superstorm left more than 90 percent of LIPA’s 1.1 million customers without power, some for many months.

Following the storm, Cuomo established the Moreland Commission to investigate the utility’s response, preparation and management. The investigation concluded that LIPA’s poor customer service, high rates, large debt load, insufficient and antiquated infrastructure and failure to perform during natural disasters is a result of its poorly conceived structure.

Under that structure, many decisions were made using consultants, rather than utility managers. Also, LIPA had not been subject to any state oversight with no accountability for performance.

“LIPA is broken and LIPA has to go away,” Cuomo said. “We need a new and better way to provide utility services on Long Island.”

But LIPA will remain a state-owned holding company that will allow it to receive federal disaster funding and certain tax advantages, Cuomo said. The proposal will also cut the number of LIPA board members from 15 to five and LIPA staff from 90 to 20.

State Sen. Joseph Addabbo (D-Howard Beach) said his constituents in the Rockaways had problems with LIPA even prior to Sandy coming ashore.

“When you provide a critical service, you have to make sure you provide it in a reliable manner,” he said. “And LIPA has always had issues with that.”

Addabbo said LIPA would typically give his office periodic updates and, three months after the storm, more than 6,000 people in the Rockaways were still without power.

“This is New York City, how can thousands still have no power? It was very frustrating,” he said. “Ask any one of my constituents if they are confident in LIPA handling the next storm, the answer is no.”

Reach reporter Steve Mosco by e-mail at smosco@cnglocal.com or by phone at 718-260-4546.

Posted 8:20 pm, May 16, 2013
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