Experts: Complications face LIPA reform plan

A desire by Gov. Andrew M. Cuomo to drastically reform the Long Island Power Authority could complicate the transition to a new grid manager as well as plans to develop new power projects, according to Long Island utility experts.

Newsday reported Thursday that Cuomo saw LIPA as a "bloated" agency and would move to return the authority to its core mission of providing cheap, reliable power with a smaller staff, according to administration officials.

But people who follow LIPA closely, some of whom fund projects through the authority, worry that such a vastly streamlined LIPA could cede local control of funds for Island energy projects out of the region. There's also concern that LIPA, which is transitioning to a new electric grid operator in New Jersey-based PSEG and eyeing contracts for new power sources, could face costly delays.

"I'm definitely troubled by what this all means in terms of making sure LIPA fulfills all its responsibilities," said Neal Lewis, a LIPA trustee and executive director of the Sustainability Institute at Molloy College. He noted that LIPA "has a lot of balls in the air" with the PSEG transition, new power projects and commitments to renewable energy, which he said he worries could be cut if not locally administered.

In addition, Lewis said, "I'm not sure I've seen a lot of evidence that a 100-person staff is too much."

People close to LIPA said authority employees were caught off-guard and "devastated" by the potential for staff cuts.

In a statement, LIPA said it "supports any ideas that could result in lower cost and better service to ratepayers. We will continue to look for opportunities to improve our operations as we continue to transition to a new service provider."

At the same time, a state inspector general's audit of LIPA, ordered by Cuomo in April 2011, is wrapping up and a draft has been reviewed by the agency, a source said. An IG spokesman said, "We will not comment on any pending investigation."

Greg Fisher, who recently sued boards of elections to make LIPA trustee positions elective posts, Thursday wrote to the state energy secretary, saying that rebranding and streamling LIPA is "like renaming the Titanic and reducing the number of musicians of its ill-fated orchestra." He noted LIPA's expenses don't get reduced by "outsourcing" and "renaming seems like a plan to dodge past transgressions."

Peter Gollon, energy chairman for the Long Island Sierra Club, said it was "vital that any changes implemented do not impede [LIPA's] broad transition to clean, renewable energy or reduce LIPA's ability to innovate in this area. If anything, they should be moving faster, and it's not at all clear that a new structure would help that."

Matthew Cordaro, chairman of the Suffolk legislature's LIPA Oversight Committee, said the big question about the governor's reported plan is, "Why did he wait so long to do this?" He also said it could raise questions about "who will have oversight" and whether legislation is required to refine LIPA's mission.

Michael Faltischek, a former LIPA trustee who has an interest in a proposal to increase the size of the Caithness power plant, said that if a move to reform LIPA results in delayed decisions on power, it "will only result in higher costs." His message to the governor: "Let LIPA do its job, staff up properly and appoint new leadership. The region can take care of itself."