Cuomo aide: Guv not wedded to a privatized LIPA

Gov. Andrew M. Cuomo's new gun-control law has Gov. Andrew M. Cuomo's new gun-control law has cost him public support among voters who live in gun-owner households, a new poll says. (Nov. 20, 2012) Photo Credit: Charles Eckert

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Gov. Andrew M. Cuomo isn't wedded to selling LIPA's assets to a private company and could consider creating a Long Island-based watchdog to oversee the utility, a top aide said Tuesday.

One day after Larry Schwartz, secretary to the governor, and five financial experts from consulting firm Lazard Ltd. appeared before state lawmakers to discuss the options, Schwartz emphasized that the meetings were "just the beginning" of a dialogue. He's due to make visits to Long Island in coming days and weeks.

While lawmakers said nearly all of the information presented by Lazard addressed the privatization plan Cuomo has endorsed, Schwartz stressed the meetings were not a platform to galvanize support for privatization. Meetings were held with Long Island delegation of Assembly Democrats and Senate Republicans in Albany.

"This was not a privatization meeting," Schwartz said. "It was not a brainwashing meeting. It was, 'let's look at all the issues, and get answers to all the questions that will be raised.' "

Assemb. Steven Englebright (D-Setauket) said while discussion of a fully public Long Island Power Authority came up, most of the talk was on privatization, about which he has concerns. "I'm very skeptical of placing ourselves entirely into the hands of a private company model."

Worse, he said, he had little faith that even a fortified Public Service Commission promised by Cuomo would solve the utility's problems. "The PSC is the one that rubber-stamped Shoreham approvals in the first place," he said of the never-opened nuclear power plant, the debt from which remains on LIPA's books. "And they're telling us the PSC will be there for you. They've never been our advocates."

Schwartz said Cuomo has broached with lawmakers the idea of a Long Island-based iteration of the PSC. "We could create a Long Island-local version of the PSC to oversee the new entity," he said.

Senate co-leader Dean Skelos (R-Rockville Centre) said after meeting with Schwartz and the consultants that he's still undecided about privatizing LIPA, and that the issue needs more study.

"We all agree, including the governor, that we want to move slowly on this," Skelos said. "We have not received the documents" on Lazard's analysis of privatization, Skelos said. "Once we do, we'll make our own evaluation."

LIPA has commissioned studies, including a 2011 report by the Brattle Group, that show privatizing would raise rates. But Schwartz said privatizing would provide rate and property tax stability, and he raised questions about that report.

"Lazard will tell you the Brattle report is a flawed report," he said. "It has a lot of holes in it, as many holes as Swiss cheese." In any case, Schwartz said, legislators who are behind the concept of a fully public utility must present a compelling case for it to be seriously considered.

"If someone says to me, 'We should go to a public-utility model,' I'd like them to say which model. . . . Show me your model. I want to make sure ratepayers know if we go down that path, here's the impact on their utility rates, property taxes, on customer service going forward, and on being better prepared" for storms.

With Yancey Roy

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