LIPA: It welcomes, but did not request, NYPA review

With a blizzard forecast for Feb. 8, 2013, With a blizzard forecast for Feb. 8, 2013, the embattled LIPA will cede control of operations and its public face during a potential emergency for the first time since its 1998 creation. (Nov. 12, 2012) Photo Credit: AP

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The Long Island Power Authority is challenging the contention that it requested the review of its power contracts that is being done by the New York Power Authority.

In a statement released Friday in response to a Newsday story, LIPA said that while it welcomed the NYPA review, it "did not request any additional review at this time."

The Newsday story quoted state sources as saying the review -- using NYPA experts in power resource planning, acquisition, finance and law -- was requested by LIPA, whose power markets staff were to participate.

A Cuomo administration source on Friday said the administration requested the review.

According to the official, "We want to review and make sure that the substance of the contracts is in the best interest of ratepayers, in terms of backup power, emergency response, and that they were obtained at the best price."

In its statement Friday, LIPA said it had a "rigorous" procurement process to make sure contracts are in customers' best interests. "LIPA's contracts have been subject to numerous layers of review, approval, oversight and audit, by various state, federal and other entities over the years," the statement said.

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Newsday in December reported that some of LIPA's contracts had raised red flags, including a nearly $1 billion capacity contract that allows the authority to purchase energy from a Pennsylvania plant in only the rarest of circumstances.

According to Gov. Andrew M. Cuomo's Moreland Commission, NYPA was even considered as a prospective operator of LIPA, but the option was rejected. It may have duties in LIPA's transition to a new owner or operator, the Moreland Commission report said.

A NYPA spokesman didn't return a message seeking comment.

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Meanwhile, several forums are planned this week for the future of LIPA. Cuomo has broached the idea of selling off LIPA assets to a private company, but some local lawmakers and business leaders are pushing for a fully public LIPA or an improved version of the existing model. Cuomo has said he's open to all options.

The International Brotherhood of Electrical Workers Local 1049 is holding a forum at its Hauppauge headquarters, seeking to answer the question, "Will the new model provide lower rates and better service to Long Island?"

"We have serious concerns about costs, synergies, and the overall issues that need to be addressed in any discussion of privatization," the union said in its promotional material.

The union also will address a concern that about 1,100 of its members who work in natural gas and power plant operations for National Grid may not be available for storm restoration efforts once PSEG of New Jersey takes over management of the grid next year.

Don Daley, business manager of the union local, said he recently learned the two companies have not been able to reach an agreement that would keep those 1,100 workers stationed on the LIPA grid if a storm hits.

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Officials for National Grid, LIPA and PSEG did not immediately have a response.

On Wednesday, state Sen. Carl Marcellino (R-Syosset) is expected to lead a hearing in Albany about LIPA's future. The purpose: "To examine the best course of action to ensure the residents of Long Island receive the electrical and customer service that they deserve at affordable prices."

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