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3 LIPA trustees seek PSEG contract's release

Nassau County Executive Edward Mangano and Suffolk County

Nassau County Executive Edward Mangano and Suffolk County Executive Steve Bellone watch as Gov. Andrew M. Cuomo removes a LIPA sign from a truck and replaces it with a PSE&G sign. (July 29, 2013) Credit: Steve Pfost

Three LIPA trustees this week urged the authority to publicly release its newly expanded contract with PSEG in advance of a board vote on the $4 billion-plus pact next week.

The unusual request, in a letter sent to board chairman Larry Waldman on Monday, sets the stage for a possible challenge to passage of a contract that is central to Gov. Andrew M. Cuomo's LIPA reform effort. The contract turns near-total control of the Long Island electric grid to Newark-based PSEG in January.

In their letter, trustees Neal Lewis, Suzette Smookler and Matthew Cordaro noted that the contract could be in effect for up to 20 years, and gives PSEG authority to make major decisions about the region's energy future.

"The public has a right to know how this new arrangement will work before it becomes legally binding," the trustees wrote to Waldman.

In response to Newsday questions, LIPA spokesman Mark Gross said the authority expects the document to be made public after a state Department of Public Service review. He said that could happen as soon as Thursday.

The contract, which LIPA distributed to trustees last week, expands upon a prior pact with PSEG that took state Comptroller Thomas DiNapoli's office several months to review and approve. DiNapoli spokesman Mark Johnson said the contract and related documents were "voluminous and complex." Because of language in the LIPA reform bill passed this summer, the comptroller doesn't get to approve the new PSEG contract.

Department of Public Service spokesman James Denn said that agency "has been monitoring the contract negotiations between LIPA and PSEG since May, and was "at the table for negotiations to advise on utility oversight matters." Agency staff, he said, is "familiar with the contract," is completing the review of the contract terms and "drafting the recommendation as required by law."

Lewis, who heads the Sustainability Institute of Molloy College, said he's concerned that the new contract as written provides few concrete assurances that funding for green-energy programs would continue.

"I am concerned that significant cuts in efficiency and renewables programs can be made with little or no public input," he said. "It becomes a decision by a private company. I'd like to see some of those things written into the contract."

Cordaro said his primary concern is that the new, enlarged contract has not been reviewed by an outside entity to determine its financial impact on ratepayers. He said he is likely to abstain from the vote next week.

"We haven't had enough time for the public to weigh in on this, and no one's ever done an analysis of the cost," he said.

Lewis said he hasn't made up his mind whether to vote for the contract, but added, "The fact that at least three of us were concerned enough with the lack of transparency to write a letter indicates that it may not be a unanimous vote."

Smookler didn't respond to a request for comment.

LIPA's board has 10 members, short of its 15-member slate. One person familiar with the process said three abstentions on the contract vote could delay passage.


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