LIPA chair concedes communication woes

During the LIPA trustees meeting and vote on During the LIPA trustees meeting and vote on who gets the new 10-year management contract, Chairman Howard Steinberg listening to other trustees speak. (Dec. 15, 2011) Photo Credit: Newsday / J. Conrad Williams, Jr.

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LIPA chairman Howard Steinberg said Friday that he agreed with the chorus of residents and local elected leaders who have blasted the utility's communications over the last two weeks.

"Communications is definitely a problem. It's a big problem that's not acceptable to the board, which is why we've authorized significant improvements to our systems," Steinberg said.

He was referring to trustees' approvals during recent months to invest roughly $150 million into new computer systems to handle outage management and customer communications. But, Steinberg said, the improvements were planned to begin in 2013 and be completed when PSE&G takes over the electrical grid contract in 2014.

"Unfortunately the improvements we've authorized were just not in place in time for Hurricane Sandy," said Steinberg, who heads the 15-member board. Only 10 positions are currently filled.

Newsday reported Friday that LIPA had been warned as far back as 2006 that it was unprepared to handle a major storm, failed to upgrade its technology, neglected maintenance and underbudgeted for storm response.

LIPA board member Neal Lewis said debt from the never-opened Shoreham nuclear plant has been a "constraining factor" in LIPA's ability to spend money to make necessary upgrades.

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"Frankly, we would like to spend more on making the whole system more resilient," Lewis said. "But it's kind of like having a second mortgage on your house and then trying to get a home-improvement loan."

Steinberg, who has been on the board since 1999, said ratepayers may not like the costs of hardening LIPA's infrastructure to handle storms once thought to be "once in a lifetime events."

"If you go to them and say, we want to build this system to be able to cope with Sandy-like events as if they're going to be routine -- but if we build at that level, you're going to have to pay 60 percent or 70 percent more in your electric rates, I'm not so sure what the response is," he said.

Steinberg acknowledged that trustees have studied the costs of transitioning from an aboveground electrical distribution system in a heavily treed area to an underground one, but that the cost could be between $20 billion and $30 billion.

"People do talk about undergrounding, and there's a lot to be said for it, if you can do it, but from a financial point of view, it's just not in the realm of reality here, with such high rates and high costs and limited dollars," he said.

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Lewis suggested a bond referendum to fund the upgrades necessary to battle the "new normal" of "extreme weather patterns."

"Frankly, we need some major bond initiative that recognizes the new normal," he said. "We know we're having more and more severe storms and that the only way to meet the challenge is a big investment in our system."

Steinberg promised that LIPA trustees would demand a full action report from utility management on the storm response to get an understanding of where the lapses occurred. "We're going to do a thorough review, from soup to nuts, and we're going to hold National Grid and our [LIPA management] team accountable," he said.

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