Cuomo staff discusses bill on LIPA hikes

Gov. Andrew M. Cuomo's office, largely silent on Long Island Power Authority issues since the governor took office in January, has taken a new interest in the utility.

Over the past month, Cuomo staffers have met with members of Assemb. Robert Sweeney's office to discuss a bill by Sweeney (D-Lindenhurst) seeking Public Service Commission approval of rate increases of more than 2.5 percent.

More recently, Cuomo's office directed LIPA and service commission staff to draw up a memorandum of understanding for the commission to supervise an audit of LIPA charges.

Cuomo spokesman Joshua Vlasto confirmed the meeting with Sweeney's staff and the commission memo. "We want to ensure that rates are being appropriately set by LIPA."

Michael Hervey, chief operating officer of LIPA, said the authority is working with the commission on a method for an audit of LIPA's delivery charge and other charges on bills. He declined to elaborate, but said the commission will use a third-party auditor and results will be presented to LIPA.

The notion of a third-party audit was broached in Senate hearings on Long Island earlier this month, led by Sen. Charles Fuschillo (R-Merrick), after Matthew Cordaro, co-chair of the Suffolk Legislature Committee on LIPA Oversight, recommended a full audit in March. LIPA already has submitted to a third-party audit of its power-supply charge, the results of which were presented to LIPA and publicly released. The audit, conducted in 2009, found LIPA's practices for the charge were generally in line with other utilities.

On Monday, Sweeney said his staff's meeting with Cuomo energy secretary Tom Congdon was primarily to discuss Sweeney's legislation. He said Cuomo's staff had questions about LIPA claims that the bill would spook Wall Street credit-rating firms. LIPA says a lower rating could mean higher borrowing costs.

"We had one meeting with the governor's office," Sweeney said. "They wanted to talk about my bill. Of course, I said, 'Sure.' I said right up front, it's got to be something meaningful."

Cuomo's office also is expected to have a say in the appointment of a new chief executive at LIPA. Hervey is interim chief and is in the running along with LIPA power markets vice president Paul DeCotis and an unnamed outside executive for the spot.

Sweeney said regardless of executive support, "I will keep the bill moving through the process in the Assembly." A similar bill already has passed in the State Senate. Sweeney said he hopes for a "three-way agreement" with the GOP-controlled Senate and Cuomo.