LIPA oversight bill eyed by state lawmakers

Copies of a newly drafted "LIPA Oversight and Accountability Act" went out to Long Island state legislators Thursday, seeking co-sponsors as the bill moves toward introduction in January.

The bill, the first of its kind mandating outside oversight of the Long Island Power Authority through regular, comprehensive audits and complaint fielding by state regulators, is the product of months of negotiations among Gov. Andrew M. Cuomo, Assemb. Robert Sweeney (D-Lindenhurst) and state Sen. Kenneth LaValle (R-Port Jefferson).

"This is the significant step forward that we've been looking forward to for so many years," Sweeney said. LaValle declined to comment.

An earlier version of the bill that Sweeney and LaValle sponsored and which the legislature passed last summer will be signed by Cuomo by January's end, but the new bill would replace it. Cuomo spokesman Joshua Vlasto said, "This agreement will better protect ratepayers and improve service."

In addition to mandating comprehensive management and operations audits of LIPA, the bill calls for regular public hearings to shape and discuss findings from the audits, which will start immediately and be repeated at least every five years. It also allows consumers for the first time to take complaints about their electric service or bills to an outside agency -- the state Consumer Protection Division.

The audits would focus on rate setting, annual operating and capital budgets, construction costs, efficiency, debt service obligations, fuel and purchased power costs, according to a copy of the proposed bill.

The Public Service Department will be charged with conducting the audits or assigning an outside firm to do them. The auditor will hold public hearings in Nassau and Suffolk counties to allow the public to comment on their scope. Once completed, the audit will be sent to the PSC, the governor, and leaders of the Senate and Assembly, and be posted on LIPA's website. There's a process for LIPA to comment on or object to the findings, with an additional public hearing.

Sweeney said the bill "seriously addresses a lot of the concerns Long Islanders have experienced over the years about LIPA."

The earlier bill that required Public Service Commission review of LIPA rate hikes over 2.5 percent in a year "warrants further discussion," Sweeney said, although there's no immediate plan to reintroduce it.

Cuomo and his predecessor, Gov. David A. Paterson, had concerns that bill would lower LIPA's bond rating because it removed the utility's ability to raise rates at will to cover costs.