New York – Long Island Power Authority, a state-owned New York utility company that was criticized for its response during last year’s Superstorm Sandy, will see most of its operations taken over by a private company, New York Governor Andrew Cuomo said on Monday.
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Public Service Enterprise Group Inc , a private utility in neighboring New Jersey, will take over management of LIPA’s operations next year. Lawmakers faulted a bifurcated system where operations were partly run through a services agreement with UK power company National Grid Plc .
Sandy in October left more than 90 percent of the 1.1 million LIPA customers on Long Island without power, some for more than two weeks.
LIPA’s services agreement with National Grid is due to expire at the end of 2013. PSE&G was already set to take over as the system’s operator but the governor’s proposal will see that role expanded to take over most of the company’s operations.
“LIPA is broken and LIPA has to go away,” Cuomo said at a press conference in the state capital Albany. “We need a new and better way to provide utility services on Long Island.”
LIPA will, however, remain a state-owned holding company that will allow it to receive federal disaster funding and certain tax advantages, Cuomo said. The governor also cited “philosophical reasons” for keeping LIPA in state hands. He did not elaborate.
The governor said the proposal includes a change in the law that allows LIPA to refinance half of its $6.7 billion debt at lower interest rates. About 10 percent of consumers’ energy bills under LIPA are made up of debt payments, the governor said.
The proposal will also cut the number of LIPA board members to five from 15 and LIPA staff to about 20 from 90.
This is all a farce.
PSEG is a private company. not to be confused with PSE&G, a public utility in NJ. The article already confused the 2 of them.
LIPA has to make a profit. PSEG has to make a profit. Who pays for it? the consumer. Layer upon layer of beaurocricy. (I spelled that wrong – spell checker went out to buy blintzes)
Cuomo wants to keep it in state hands so that he can put another do nothing political hack on the board. HE reduced the board? Then he gives his friends a new title and a new salary. We all saw how it works.
The light is still out on my street since LIPA workers took out the bulb after Sandy to bring it to another street. We called for 6 months to get another bulb
It is all a shell game.
Remember: LILCO preceded LIPA and managed to soak everyone with Shoreham nuclear plant. They had to go live for the money even though they knew they would’t use it, and it would be much harder to decommission.
$ 6 BILLION and never any power. And now back to private with PSEG??? (And thank you, #2 , for the excellent clarification – so we get a lower priority than Jersey which had numerous problem long lasting problems with outages.)
Regarding the national electrical grid and the Long Island Power Authority, it should be noted that the LIPA is really no different than most electrical utilities around the country. Most electrical plants are aging rapidly, and depend upon technology of the 1950’s. Also, the maintenance staff at most electrical utilities have been cut to the bone. If there are massive blackouts, they all depend upon imported workers from out of state. Hence, consumers should be prepared with automatic, standby, natural gas powered generators. They are not inexpensive, but they still cost only one fifth of what a new car would cost. Less than 1% of all residential homes have them, but today, they are a necessary evil. I finally had one installed last summer, following a three day blackout, where we svitzed in 100 degree heat. I’ve never regreted that decision. This past winter, when there was a smaller blackout, our power was restored within 20 seconds!
So now Long Island throws out LIPA because there were 2 weeks after the hurricane without power and brings in a company from New Jersey that was 10 days after the hurricane without power.
What do they gain?