LIPA, Cuomo aides discuss rate freeze
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LIPA trustees had a long-awaited meeting with top Cuomo administration officials Friday about the authority's future, focusing on a proposed rate freeze, the timing and scope of a new PSEG contract, public hearings on a pending LIPA bill and the continuity of green-energy programs.
Attendees said a three-year rate freeze under Gov. Andrew M. Cuomo's proposal was described as a "goal" that will not be in legislation that Cuomo hopes to pass in the State Legislature next month. Officials have said it would apply to the delivery charge portion of bills, which has increased only marginally -- 3.8 percent -- in LIPA's 15-year history.
"They said the rate freeze is a goal, an aspiration," said LIPA chairman Larry Waldman. "They would like to see the rates held down, [but] there are a lot of caveats. If there's anything we can do without compromising safety and service we will do that."
Trustees also were told the administration will hold public hearings on the LIPA legislation before the bill is put up for a vote this legislative session, which ends June 20. Cuomo spokesman Matthew Wing said details of the hearings would be announced in the "near term," but were "still being locked down."
Administration officials are at work with PSEG, the New Jersey-based company that is to take over management of the Island's electric grid in January, and LIPA in hammering out the details of a new, expanded contract with PSEG, trustees said. Waldman said his hope is that the contract, which would lay out PSEG's expanded role, is drawn up before the legislature votes on any LIPA bill.
The meeting at LIPA's offices in Uniondale was attended by Larry Schwartz, secretary to the governor, and Richard Kauffman, the state's chairman for energy policy and finance, among other state officials, and LIPA's 11-member board.
Waldman and other trustees said Kauffman gave assurances that his history supporting renewable energy and related programs at the U.S. Department of Energy would transfer to support for them on Long Island, where PSEG will take on the work.
Trustee Neal Lewis, a supporter of continuing LIPA efficiency programs, described the meeting as "a good back and forth among a roomful of professionals who feel passionately about what is the right thing to do."
Trustee Matthew Cordaro said he told officials the legislation would result in significant cost increases for ratepayers and raised the issue that IRS approval of the deal was critical to its completion.
An administration official who asked not to be identified confirmed that the parties are close to finalizing a term sheet in advance of a new contract with PSEG. The official confirmed that bond advisers for LIPA are working on the IRS issue and "confident the IRS will approve any agreed upon contract," and that the administration is "open to other ideas" for the LIPA board, "as long as the bottom line is LIPA becoming a holding company."
Wing described the meeting as "positive and productive," and part of a broader outreach effort.