LIPA trustees meet as electricity sales drop 3%
LIPA's new board of trustees is scheduled to meet for the first time Tuesday to approve the appointment of a Wall Street executive as the authority's new chief financial officer and review 2013 fiscal results that saw electricity sales drop by 3 percent.
A resolution posted on LIPA's website Monday said Thomas Falcone will be appointed LIPA's chief financial officer starting Jan 21.
Falcone's online profile says he spent 13 years at Morgan Stanley working for clients that included the Los Angeles Department of Water and Power, Southern California Public Power Authority, the New York Power Authority and LIPA.
Falcone would replace Michael Taunton, who left in December. Attempts to reach Falcone were unsuccessful, and LIPA didn't respond to an inquiry about him.
A copy of LIPA's 2013 preliminary financial results, also posted on its website Monday, shows the authority ended the year with $3.755 billion in revenue, up from $3.54 billion in 2012. The 2013 revenue figure is $158 million above LIPA's budgeted projections for the year, but the increased revenue was eaten up by expenses.
LIPA reported spending $1.75 billion on fuel and power expenses last year -- $216 million over budget.
Operations and maintenance expenses for 2013 also were over budget by $15 million, LIPA said. That was due in part to previously unbudgeted costs of $35 million to set up a payroll/procurement computer system for PSEG Long Island, which took over most of LIPA's operations on Jan 1. Other expenses included a $10 million write-off for a storm outage management computer system that was abandoned in favor of a new $31 million system recommended by PSEG.
PSEG Long Island spokesman Jeffrey Weir and LIPA spokesmen didn't respond to requests for comment Monday.
Sales of electricity for LIPA in 2013 dropped in all three customer sectors -- residential, commercial-industrial and public -- by a combined 3 percent, LIPA reported in the preliminary results. Overall, residential customers used 263,369 megawatt hours less than they had in 2012. Commercial and industrial customers used 239,618 less megawatt hours. Public sector and street lighting customers cut use by 4 percent, or 26,490 megawatt hours, LIPA reported.
LIPA ended 2013 with long-term debt of $6.98 billion, a $366.8 million jump from the previous year's $6.61 billion, according to the financial report. Short-term borrowings totaled $263 million, compared with the previous year's $200 million.
LIPA ended 2013 with $652.3 million in cash and investments, including unrestricted cash of $128.7 million. Among the accounts is a new "PSEG fund" totaling some $263 million, said LIPA, which provided no further details.
PSEG Long Island Tuesday also is scheduled to give its first progress report since taking over operations. PSEG is expected to give an update on the failure of a New York Power Authority transmission cable earlier this month under the Long Island Sound.
NYPA has said the cable is leaking around 5 gallons of nontoxic fluid an hour and that the failure isn't expected to lead to disruptions because there is a backup cable. PSEG is working with NYPA on the repairs.