LIPA's in crisis, yet Cuomo lacks urgency

Governor Andrew Cuomo in Long Beach. (Nov. 10,

Governor Andrew Cuomo in Long Beach. (Nov. 10, 2012) (Credit: Howard Schnapp)

A state investigative panel tasked by Gov. Andrew M. Cuomo to determine what went wrong during LIPA's superstorm Sandy response fired off its first subpoenas last week.

The Moreland Commission, empaneled by Cuomo two weeks ago, is said to have been told to complete its work within weeks rather than months.

Sounds like something's finally happening -- except, of course, that it is not.


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The Long Island Power Authority is in crisis, yet there seems to be no sense of urgency in resolving its newest challenges.

The resignations last week of LIPA chairman Howard Steinberg and trustee X. Cristofer Damianos -- appointed in 2007 by Gov. Eliot Spitzer -- leave the board with eight members, the minimum needed for a quorum. If others resign or if one trustee misses the next board meeting, the board will not be able to conduct business.

Steinberg's resignation Friday brings to six the number of vacancies waiting for Cuomo and state lawmakers to fill. Why is it that Cuomo -- who controls most of the appointments -- has yet to fill what are now crucial posts?

The board's next scheduled meeting is Dec. 13, when it is likely to vote on LIPA's 2013 budget -- which will be a challenge since LIPA is facing hundreds of millions of dollars in Sandy-related expenses.

Until FEMA comes through with reimbursements, LIPA, as two Wall Street credit agencies recently pointed out, could face a cash crunch. Even at that, officials estimate that the federal government may not reimburse up to $200 million of those expenses.

One month after Sandy, three other LIPA leadership posts also are, or are soon to be, vacant. It's been years since LIPA had an executive director; and the chief operating officer, Michael Hervey, along with Bruce Germano, LIPA's vice president of customer service, also have announced their intentions to depart.

A board down to a bare quorum; a potential cash-crunch at budget time; and three key management positions unfilled or soon-to-be unfilled.

All this demands more from Albany than subpoenas. It's a situation that demands action.

But maybe -- maybe? -- that's what Cuomo has in mind.

If his intent was to seed a post-Sandy crisis at LIPA -- of leadership, of customer confidence, of potential financial instability -- the job's done.

Cuomo, who as the state's top elected official ultimately is responsible for LIPA's operation, has said the authority must go. At this point, he's got public sentiment behind him.

What comes next? Could LIPA, as some have suggested, be replaced by a private utility?

That would be an irony, because public outcry after another storm, 1985's Hurricane Gloria, eventually helped push Gov. George Pataki toward the conviction that another private, for-profit utility, the Long Island Lighting Co., had to go.

LIPA did consider the option of privatizing, according to an internal utility report released last year. Authority officials decided against it, in part, because a private utility taking on LIPA's debt would have to do so without the state authority's lower, tax-exempt financing.

That, in turn, would mean a 10 percent to 20 percent increase in customer rates because of higher financing costs, plus a private owner's profit margin.

Is there another way? Cuomo has said that everything's on the table.

But even as investigators investigate and Cuomo considers how the electricity needs of Long Islanders will be served in the future, LIPA needs action now to ensure its stability.