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Long IslandColumnistsJoye Brown

Cuomo's latest LIPA plan a step forward

LIPA crews work on a pole leaning over

LIPA crews work on a pole leaning over the westbound LIRR tracks just west of the Hickville station in Hicksville. (Jan. 31, 2013) Credit: Howard Schnapp

What's the difference between Gov. Andrew M. Cuomo's latest proposal on the Long Island Power Authority and the one the governor was pushing before?

It comes down to this: Under the old plan, the region's electrical needs would be served by a private company that would have owned and operated LIPA's assets.

Under the new proposal, LIPA's operations would be turned over to a private company, New Jersey-based PSEG, but a slimmed-down authority would continue to own LIPA's assets.

It's like going private, without going private.

And that's a shade of difference that, for LIPA customers, would have profound implications.

For one, LIPA would retain its federal tax-exempt status; for another, the authority would remain eligible for federal reimbursement of expenses incurred responding to disasters such as superstorm Sandy.

A private company pays federal taxes and is not eligible for federal disaster funding. Had Cuomo's first proposal gone through, such costs likely would have been passed down to customers.

Cuomo's new proposal, unveiled last week in a piece of draft legislation that has yet to find a sponsor in either the state Senate or Assembly, still includes one hearty carrot:

A three-year rate freeze for LIPA customers.

But, as with the first plan -- which was never fashioned into a public piece of proposed legislation, which scuttles a point-by-point comparison -- there's little indication of what will happen to rates come Year Four.

Cuomo's new plan lives up to one goal of his old one: LIPA -- along with the size of its workforce and governing board -- would drop to a minimum.

Which, on paper at least, would mean fewer opportunities for patronage hiring (trustees are not paid).

And then there's Cuomo's proposal to have LIPA refinance its killer multibillion debt. The only question here, since the authority on its own could have sought refinancing, is what took so long?

Under Cuomo's proposed legislation, LIPA doesn't just get to live; it gets to keep some of its current powers, too, including some oversight functions in areas such as clean energy.

Another component that's survived both iterations is Cuomo's push to have LIPA's operations, through PSEG, placed under the state's Public Service Commission. That, for LIPA, should have happened years ago.

There are other goodies sprinkled through the 70 pages of Cuomo's proposed legislation. And the governor is to be commended for responding to the vigorous local opposition to his first plan.


State Sen. Dean Skelos (R-Rockville Centre) and other state officials are right in taking a wait-and-see stance.

For one, we've not yet seen any of the long-promised analyses of options, which included going to a full municipal utility.

Is this the best proposal? We likely will learn more over the next few weeks, especially if Cuomo wants state lawmakers to move before the end of the session next month.

Cuomo, like LIPA's current board and other local groups such as the Long Island Association, is looking at a hybrid model to make LI's electrical system work well, and at a reasonable cost, for residents.

That, as some officials said last week, is a step in the right direction.

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