New LIPA chairman lists priorities
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New Long Island Power Authority chairman Lawrence Waldman says his primary aim is to stabilize the much-criticized utility, including the appointment of a new acting top executive, as discussions about its future structure continue.
Waldman said Friday that privatization of LIPA is a possibility. The administration of Gov. Andrew M. Cuomo is eyeing some form of privatization, sources told Newsday last week.
"Everything has to be looked at," Waldman said. "If privatization works -- I know there's a lot of hurdles -- but if it works, great."
The same goes for other options LIPA has studied, such as going fully public or creating a variation of the current public-private structure, he said, adding, "We should look at all those."
But he stressed, "LIPA needs to be better . . . We have to come up with the right answer for the ratepayers."
Waldman's comments come as LIPA tries to right itself following widespread criticism of its response to superstorm Sandy. About 90 percent of LIPA's 1.1 million customers lost power in the storm, and thousands did not regain service for two weeks.
Waldman, formerly a trustee, was appointed chairman by Cuomo last week.
Waldman said one of his first tasks will be the appointment of a new top executive as chief operating officer Michael Hervey prepares to leave by year's end. The chief executive's post, which requires State Senate confirmation, has been vacant for more than two years.
"We're looking at a variety of people," including insiders and some outside the company, Waldman said.
He declined to name candidates. But asked if chief financial officer Michael Taunton, a former KeySpan and Arrow Electronics executive rumored to be a leading candidate, could take the job, Waldman said Taunton and "several others" were qualified. LIPA could make the appointment at a trustees meeting Monday.
Another potential candidate is North Hempstead Supervisor Jon Kaiman. In response to a question at a town-hall meeting last week about whether he still expected to be considered, Kaiman, a Democrat, said: "It's become a larger discussion. When they get some more clarity about what they want to do, I'll see whether there's an appropriate role for me."
LIPA declined to comment.
Waldman is a certified public accountant and partner-in-charge of practice development in EisnerAmper's Long Island office.
He said LIPA trustees are "very mindful" of concerns by bond rating agencies about LIPA's leadership and finances following Sandy. At a finance committee meeting Monday, board members will be discussing "negative outlook" designations by Fitch and Standard & Poor's, and Moody's recent threat of a ratings downgrade.
"Stabilization means making sure the ratings agencies are comfortable with the plan that we have," Waldman said.
But Waldman said he's also concerned about stability in the employee ranks at LIPA.
"The biggest issue is trying to keep everybody's morale up," he said. Staff has "taken a tremendous beating," particularly in the aftermath of Sandy.
Waldman said he will make sure LIPA's operations are fully up and running after Sandy.
"We took a lot of damage," he said. "We know winter is coming. Nobody's praying for no storms more than me."
Observers familiar with LIPA expressed confidence in Waldman.
"Given Larry's financial expertise and his familiarity with LIPA's finances, he is the right guy at the right time for LIPA," said former LIPA chief Kevin Law, now president of the Long Island Association, the Island's largest business group.
Matthew Cordaro, chairman of the Suffolk County Legislature's LIPA Oversight Committee, called Waldman "probably the best choice" for chairman among LIPA's current trustees.
"He's a straight shooter and a smart guy," who frequently questions LIPA's financial presentations, Cordaro said.
LIPA's 15-member board has six vacancies. The governor and state legislative leaders make appointments. Cuomo last week named Michael Maturo, president and chief financial officer of RXR Realty, to the board. RXR owns the Omni Building in Uniondale from which LIPA has long operated, and recently expanded to larger space under a $25 million, long-term contract.
Maturo didn't return a call seeking comment. A Cuomo administration source said the relationship wasn't a conflict.
With Scott Eidler
and Jennifer Barrios