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Moreland Commission member surprised at interim LIPA report

Power lines seen at sunrise in Melville on

Power lines seen at sunrise in Melville on Jan. 11, 2013. Photo Credit: Newsday / Karen Wiles Stabile

A member of Gov. Andrew M. Cuomo's Moreland Commission on LIPA said Friday that he was surprised to discover recently that an interim report on privatizing the utility excluded references to several commissioners' early misgivings about the idea.

Peter Bradford, a former chairman of the state Public Service Commission, was one of three members of the 10-person commission who believed it was too early to support the idea of privatizing LIPA, which would have involved selling its assets to a private company. While initially supportive of privatization, the Cuomo administration later dropped the idea.

The interim report was released in January 2013, when the commission had existed for only six weeks, Bradford said, and he and others believed the group needed more time to fully explore the implications of privatization.

The dissenting members had been led to believe that the interim report would say that only a majority of commissioners supported privatization, two members said. Bradford has retained a copy of that report, which mentions majority support four times, he said.

Yet the released version of the report excluded that language. Bradford on Friday said he'd only recently discovered that changes were made before the report was publicly released. "It's fair to say I'm surprised the report as released differs from the report the commission approved," Bradford said. "That just doesn't seem right."

In a statement, Cuomo spokesman Rich Azzopardi said, "This administration has never shied away from the fact that we directly coordinated with the commission throughout this process -- and we are proud of it, because that work spurred change that ended LIPA as we know it."

While the released interim report says the commission "recommends privatization," Azzopardi noted that it didn't say the commission "unanimously" supported the idea; instead it identified many options, highlighting the pros and cons of each.

Another commissioner, former New York City Public Advocate Mark Green, had threatened to resign from the commission after the interim report excluded presumed references to majority support.

"I was surprised and disappointed when the interim report was mischaracterized, and I complained to the [commission] co-chairman Ben Lawsky about it," Green said Friday. "I was later pleased that they corrected it and got it right in the next week's State of the State reference to the commission."

While Cuomo didn't mention the commission's support in his speech, documents filed with it noted that "a majority of the commission believes that privatization is the best option." That mention assuaged Green, he said, and he remained on the commission until it was disbanded in spring 2013.

In addition, a news release mentioning the "majority" support, which the commissioners said they were led to believe also was to be released, was not made public, Bradford and Green said.

Bradford said the commission early in its work received a briefing from financial firm Lazard supporting the notion of privatization.

"Lazard had been in the picture before the Moreland Commission was ever formed," Bradford said. "In the first weeks we got a briefing from Lazard that was pretty much pro-privatization."

Lazard received $250,000 a month in consulting fees as part of its work for the state on LIPA. In the end, the administration didn't take Lazard's advice to privatize LIPA, and instead opted for a version that gave New Jersey-based PSEG operational control over the grid, with LIPA owning the assets.

Green, in a Newsday story in July, said he believed the administration had a preconceived plan to privatize LIPA before the commission completed its work. "I became concerned when Cuomo appointees would call to pressure us to come to conclusions they had already arrived at that just clashed with the governor's initial declaration that the commission was independent," he said.

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