LIPA expected to delay vote on contractor

LIPA trustees Thursday will approve a new operating structure largely based on the existing one -- with some service and financial enhancements -- but will delay until December a vote on which company gets the contract to run the local grid, sources said.

Trustees are expected to require more time to examine the relative merits of the three companies vying for the contract, the sources said. The three contenders are Con Edison, National Grid and PSE&G of New Jersey.

LIPA declined to comment on specifics of the agenda, other than to say Newsday's characterization of the vote timing was accurate.

The enhanced structure model, which LIPA has called Servco, gives the authority greater financial transparency into the financial workings of the contractor that operates the grid, and a greater ability to push for increased customer service through penalties and incentives, LIPA said. London-based National Grid currently operates the local grid under a seven-year, $2.3 billion contract.

LIPA trustees for months have been examining the relative merits of three different future structures. They include selling LIPA to a private entity, taking on existing workers and some equipment in a municipalization model, and the enhanced existing model that consultant the Brattle Group has recommended.

The delay in awarding the contract is expected to provide breathing room for Gov. Andrew M. Cuomo, whose staff has been working with renewed vigor on LIPA issues in recent weeks, including pending chief executive and chairman appointments. A Cuomo-requested inspector general's audit of LIPA is expected to be wrapped up before the final vote on the contractor selection in December. Joshua Vlasto, a spokesman for Cuomo, declined to comment.

LIPA trustee Neal Lewis said that he was prepared to vote on LIPA's future structure Thursday, and that he supported the enhanced existing model, in part because it benefits renewable energy programs.

Matthew Cordaro, co-chair of the Suffolk Legislature's LIPA Oversight Committee, said the board's vote, if it approves Servco, means that the "existing operation remains in place, and that's not an acceptable solution here," given reports of billing overcharges, excessive storm costs and other problems. The committee has supported municipalizing LIPA.

The trustees meeting is scheduled for 11 a.m. at the Long Island Marriott Hotel, 101 James Doolittle Blvd., Uniondale.