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LIPA: It welcomes, but did not request, NYPA review

With a blizzard forecast for Feb. 8, 2013,

With a blizzard forecast for Feb. 8, 2013, the embattled LIPA will cede control of operations and its public face during a potential emergency for the first time since its 1998 creation. (Nov. 12, 2012) Credit: AP

The Long Island Power Authority, in a statement released Friday, said it did not request a review of its power contracts that is being done by the New York Power Authority.

In a statement released Friday in response to a Newsday story in Friday's editions, LIPA said that while it welcomed the NYPA review, it "did not request any additional review at this time."

The Newsday story quoted state sources as saying the review, using NYPA experts in power resource planning, acquisition, finance and law, was requested by LIPA, whose power markets staff were to participate.

In its statement Friday, LIPA said it had a "rigorous" procurement process to make sure contracts are in customers' best interests. "LIPA's contracts have been subject to numerous lawyers of review, approval, oversight and audit, by various state, federal and other entities over the years," the statement said.

Newsday in December reported that some of LIPA's contracts raised red flags, including a nearly $1 billion capacity contract that allows the authority to purchase energy from a Pennsylvania plant in only the rarest of circumstances.

A spokesman for Gov. Andrew M. Cuomo, who has deputized NYPA to work with LIPA during the last two major storms, wasn't immediately available for comment. According to Cuomo's Moreland Commission, NYPA was even considered as a prospective operator of LIPA, but the option was rejected. It may have duties in LIPA's transition to a new owner or operator, the Moreland Commission report said.

A NYPA spokesman didn't return a message seeking comment.

The LIPA statement concludes, "LIPA is continually focused on ensuring that its contracts have been executed with the goal of providing the best value for its customers, and although LIPA did not request any additional review at this time, we welcome any opportunity to demonstrate the integrity of our procurement process and contracts."

Meanwhile, several forums are planned next week for the future of LIPA. Cuomo has broached the idea of selling off LIPA assets to a private company, but some local lawmakers and business leaders are pushing for a fully public LIPA or an improved version of the existing model. Cuomo has said he's open to all options.

The International Brotherhood of Electrical Workers local 1049 is holding a forum at its Hauppauge headquarters, seeking to answer the question, "Will the new model provide lower rates and better service to Long Island?"

"We have serious concerns about costs, synergies, and the overall issues that need to be addressed in any discussion of privatization," the union said in its promotional material for the event. "Local 1049 urges that there be no rush to judgment on this matter, which has implications for the provision of essential utility services to millions of customers."

On Wednesday, state Sen. Carl Marcellino (R-Huntington) will lead a hearing in Albany on the topic of LIPA's future. The purpose: "To examine the best course of action to ensure the residents of Long Island receive the electrical and customer service that they deserve at affordable prices."

LIPA trustees, meanwhile, are scheduled to meet Thursday at LIPA headquarters in Uniondale.

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