Bill on LIPA rate increases under review

Gov. Andrew M. Cuomo's office is reviewing recently passed legislation that would mandate a review of Long Island Power Authority rate hikes of 2.5 percent and above over a 12-month period, as the bill's author says he is preparing a follow-up legislation with more consumer protections for LIPA customers.

Assemb. Robert Sweeney (D-Lindenhurst), sponsor of the bill, said he had been in discussions with Cuomo's staff in recent weeks, during which he indicated he was willing to strike a deal if Cuomo wanted to do something different. A Senate version, authored by Sen. Kenneth LaValle (R-Port Jefferson), had already passed.

"We're reviewing" the bill that passed in the legislature, said Joshua Vlasto, a Cuomo spokesman.

He declined to comment further. LIPA declined to comment, but last week LIPA chief operating officer Michael Hervey said the authority had been discussing "alternatives" to the bill. He declined to elaborate.

Sen. Charles Fuschillo Jr. (R-Merrick), who supported the Senate version, last week said, "Requiring PSC review and approval of LIPA rate increases will give new protections to ratepayers and make LIPA more accountable and transparent to Long Islanders." He urged Cuomo to sign it.

Sweeney said at one point that Cuomo's staff had taken the LIPA position that the bill could trigger a rating downgrade and thus increase LIPA borrowing costs -- a factor in its veto by Gov. David A. Paterson in 2009.

LIPA has opposed the bill for the same reasons, arguing it would raise rates. Without the legislation, LIPA can raise rates at will, rather than justify increases before outside regulators. Wall Street gives LIPA high bond ratings because of its ability to raise rates when it chooses to.

Sweeney has argued there's no reason rating agencies should downgrade LIPA's rating simply because it would have to subject certain rate increases to PSC, or Public Service Commission, scrutiny.

The assemblyman said he would push for a second part of the legislation that has some protections for consumers, such as the ability to have billing and repair complaints fielded and mediated by the PSC. Customers and lawmakers recently have complained their options are limited in billing disputes, which are often handled by the same staffers that field National Grid gas complaints. LIPA last week won concessions from National Grid to improve dispute response.

The Sweeney bill requires LIPA to seek a Public Service Commission review of any rate increases of 2.5 percent or more.