How broken is the Long Island Power Authority (LIPA)? Well, this anecdote may be emblematic: The public utility, whose management is widely viewed as discredited by a mediocre response to Hurricane Sandy, is still sending bills to a homeowner whose dwelling burned down in the conflagration at Breezy Point during the storm.
"Firefighter Kieran Burke, whose house in Breezy Point burned down during Hurricane Sandy, is still getting bills from the Long Island Power Authority, whose own negligence possibly started the fires in the first place," the Gothamist reports ("Man Whose House Burned Down During Sandy Still Gets BIlls From LIPA," by Max Rivlin-Nadler). "LIPA, which is basing his electricity bill off of last year's meter readings, has been sending Burke bill after bill, even tracking him down to a New Jersey P.O. Box as his family moved from hotel to hotel in the wake of the superstorm." (Icing on the cake: a monthly charge of $3.01 for "efficiency and renewables.")
LIPA itself, however, may not be long for this world. Announcing "LIPA is broken," New York Governor Andrew Cuomo proposed in mid-May to freeze the company's rates for three years and hand its operations over to New Jersey-based Public Service Enterprise Group, Eyewitness News 7 reported ("Cuomo wants PSE&G to takeover LIPA," by Kristin Thorne).
In a letter to Long Island business owners, Cuomo campaigned for support for his idea, reports Newsday ("On LIPA overhaul plan, Cuomo seeks business support," by Yancey Roy). The mailing asks owners to sign on to a letter urging lawmakers to back Cuomo's plan, saying, "For years, LIPA has not worked for Long Island's business community."
But not all lawmakers are convinced. There's a control issue, Newday reports ("Assembly Dems question Cuomo's LIPA plan," by Mark Harrington): assembly counsel analysis found that "the legislation would effectively remove the oversight powers of the state attorney general and the office of the state comptroller to review and approve LIPA contracts, while diminishing the new powers of the Public Service Commission and removing local decision-making about programs such as clean energy."
Lawmakers want the newly reorganized utility placed under the authority of the state Public Service Commission, which has recently gained increased power over management of other utilities in the state. But the Cuomo administration says that such a move would violate covenants in bonds already sold by LIPA, requiring a major refinancing that could boost the company's operating costs and result in higher charges to customers. "In a perfect world that sounds wonderful -- except that it would result in a massive rate increase for Long Island ratepayers," said one official. "It's a nonstarter." Said Cuomo spokesman Matthew Wing: "Governor Cuomo's legislation seeks to freeze rates, not raise them."