LIPA's $59M cost for storm that missed Long Island is not reimbursable

The hefty tab LIPA paid to prepare for Tropical Storm Henri only to see the storm miss Long Island has a second, painful element: it's not federally reimbursable.

Newsday on Wednesday reported LIPA spent $59 million preparing for the storm, mostly for the cost of bringing in and housing more than 2,700 off-island utility workers.

LIPA chief Tom Falcone said in an interview with Newsday on Tuesday, the utility won’t be able to apply for federal reimbursement for the storm as it had for Sandy and Isaias, because the Federal Emergency Management Agency "only reimburses if an event happens."

Nevertheless, said Falcone, spending the money to prepare for the storm "was the right thing to do."

Failing to secure the thousands of workers potentially needed in advance of the storm would have left those resources unavailable after the storm, Falcone said.

"It costs a ton of money to staff up for a category 1 hurricane hitting Long Island," he said. "It would have been a very bad storm."

LIPA’s 2022 budget presentation on Wednesday noted the cost of the storm, at one point a category 1 hurricane, in what turns out to have been the year’s most costly, even though it resulted in less than 5,000 outages. By comparison, this week’s tornadoes left less than 40,000 customers without power.

Henri had been predicted in weather models to hit Long Island directly, but ultimately shifted east, to Rhode Island.

"It was like a little rain mist, it really didn't affect us at all," Falcone told LIPA trustees Wednesday. "It happens. These are models. Suddenly you go from disaster to a nice sunny day at the beach."

PSEG and LIPA called in about 2,730 off-island utility workers and tree trimmers for the storm, in addition to local crews and PSEG workers who numbered 777, LIPA said. In the end, the storm led to exactly 4,767 outages, LIPA said.

By comparison, Isaias led to more than 645,000 outages for 535,000 customers, some for more than a week. LIPA at one point estimated the storm would cost around $330 million for crews and repairs, costs LIPA expects to be 75% reimbursed by FEMA. Superstorm Sandy was reimbursed more than $730 million, with another $700 million for future storm hardening.

It's not the first time LIPA prepared for a storm that didn't hit. In 2010 LIPA spent $30 million preparing for Hurricane Earl, which also missed Long Island.

Each $36 million or so of LIPA costs, including for storms, represents a 1% increase in rates, but LIPA has a mechanism called the delivery service adjustment that allows it to recoup the costs over three years. The DSA will increase $1.76 a month next year, in part because of storm costs.

LIPA for 2021 has spent over $123 million for storms and it plans to increase its budget by another $4.5 million next year. Among other storm costs are $30 million for Tropical Storm Elsa, $18 million for a winter storm, $7 million for Tropical Storm Ida and $9 million for several smaller storms.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.