LIPA overhaul agreement reached with Assembly; Senate not done

ALBANY -- A tentative compromise to Gov. Andrew M. Cuomo's plan to dramatically overhaul the Long Island Power Authority has been reached with the state Assembly, but the Senate is still raising concerns, a Cuomo official said Monday.

The compromise would include language to expand the board to nine trustees and provide some new layers of oversight and "aspirations" on green energy, Assemb. Fred Thiele (I-Sag Harbor) said of the agreement with the Assembly. Thiele said he still opposed the proposal.

The new plan would significantly shrink LIPA, reducing it to essentially a financial holding company and cutting staff.

It would hand over day-to-day management of the Island's grid to PSEG, the New Jersey-based company that was set to takeover operations in January, though in a more limited role.

The plan would allow LIPA and PSEG to amend their pending contract without being subject to state comptroller approval and public bidding "provided that final agreement would be subject to department of Public Service review and recommend" scrutiny, according to a draft of proposed amendments provided to Newsday.

Cuomo's bill to revamp LIPA is expected to be amended Monday.

A second source briefed on the amendments described them as short of the more complete oversight that Democratic legislators proposed, and said they were aimed at appeasing constituent concerns about regulation of LIPA and PSEG.

Cuomo officials didn't immediately comment.

Among other terms:

PSEG would be required to publicly post contracts semi-annually more than $250,000 on a website.

The state comptroller would have "pre-approval of LIPA contracts and public bidding would remain: but OSC would not have pre-approval over contracts between PSEG and third parties."

New "aspirational" language on continuing LIPA's renewable energy initiatives, including maintaining programs recently approved by the LIPA board.

The amendment would also allow for the Department of Public Service to make "recommendations on incentive compensation and liability for imprudent/unreasonable storm costs."

The LIPA board would be increased to nine from Cuomo's five.

The new plan would allow the Public Authorities Control Board to review any plan to securitize LIPA debt and accept or reject it within 30 days.