Long Island Power Authority: Will 3-year rate freeze help?

Debates over the Long Island Power Authority continue after Governor Cuomo's bold suggestion to freeze LIPA rates for three years.

Mike Groll / AP
New York Gov. Andrew Cuomo speaks at the Capitol on May 13, in Albany, N.Y. Cuomo wants to freeze Long Islanders’ energy rates for three years as part of a proposal to end operating control of the Long Island Power Authority. Most New York lawmakers remain noncommittal, but Assembly Speaker Sheldon Silver and Senate Republican leader Dean Skelos said Cuomo’s proposal was a good first step.

Gov. Andrew Cuomo received tentative support from legislative leaders Monday for his plan to finally sideline the Long Island Power Authority, which has been criticized for high rates and questionable response in disasters for years.

The Cuomo proposal would replace LIPA's role in daily operations by Public Service Electric & Gas Co. of New Jersey. The proposal would freeze Long Islanders' rates for three years.

Assembly Speaker Sheldon Silver would only say Cuomo's proposal was a "thoughtful plan" to "a complex challenge" and "certainly an important step in the right direction."

Assembly Republican leader Dean Skelos of Long Island was just as noncommittal of the proposal, although the Cuomo administration worked with key legislators on its provisions for weeks. Skelos called it "still a work in progress."

Long Island legislative representatives, the county executives of Nassau and Suffolk counties, and business leaders gave stronger support for Cuomo's proposal.

But some customers who are already paying some of the nation's highest utility bills are still concerned.

"Let's take the proposal one step further with a long-term solution that will give Long Islanders a stronger voice in the utility regulatory process," said Beth Finkel of AARP in New York. "A consumer advocate office with teeth to stand up to utility companies like PSEG and LIPA is the missing piece to Gov. Cuomo's plan for oversight of utilities."

Cuomo and legislative leaders said they will try to turn the proposal into a bill that could be voted on by the end of the session on June 20.

Cuomo said that even if the transition from LIPA, and its currently contracted operator, National Grid, isn't done in time for the summer and fall hurricane season, Long Islanders will still be better served. Cuomo said he will end what he called the current, confusing relationship by empowering National Grid to act quickly and decisively in the event of major power outages. Cuomo credited National Grid for quickly responding to a major snow storm shortly after he took office in 2011.

LIPA said it will cooperate.

"We will continue to work with government leaders and all other stakeholders to make sure highly reliable service continues to be provided to customers at the best possible value," said LIPA spokesman Mark Gross.

Cuomo said he envisions a privatizing of utility operations through PSE&G while reducing the number of LIPA's political patronage jobs and LIPA's role to handling the authority's $6.7 billion in debt. The network, however, would still be owned by the state authority to make sure it can still receive federal disaster aid to secure lower borrowing rates, Cuomo said. Cuomo said the delays in restoring power during Superstorm Sandy prompted his proposal after years of complaints by Long Islanders.

"It was an incompetent response," Cuomo said. "There is no alterative because the status quo is dangerous for the people of Long Island."

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