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State Assembly, Senate OK LIPA overhaul

The State Assembly and Senate approved Gov. Andrew

The State Assembly and Senate approved Gov. Andrew M. Cuomo's bill to reform the Long Island Power Authority early June 21. The Senate approved the bill by a vote of 63-0. Credit: Newsday / Ken Sawchuk, 2012

ALBANY - The State Assembly and Senate early this morning approved Gov. Andrew M. Cuomo's bill to reform the Long Island Power Authority. The Senate approved the bill by a vote of 63-0. The Assembly vote was 103-34 in favor of the bill after a sometimes spirited debate largely along party lines.

The bill would give near total control of the LIPA system to PSEG while reducing LIPA to a skeletal staff and cutting its board to nine trustees from 15. It establishes a new Department of Public Service branch on Long Island and paves the way for refinancing around half of LIPA's $7 billion debt.

Before casting his vote for the bill, State Sen. Kenneth LaValle (R-Port Jefferson) said the legislation will "ensure the technology and manpower we need and leadership we need to keep the lights on" will be available through a new provider.

Before the Assembly vote, members on both sides of the debate made their opinions on the bill's merits -- or lack thereof -- clear.

Assemb. Fred Thiele (I-Sag Harbor) criticized the rush to get it passed just one month after it was introduced. He noted that no one has seen the pending PSEG contract and worried that other terms remained undisclosed.

"There's a lot we don't know about this deal," he said, including "what happens to the rates after the three years" of the rate freeze. Nor is the monitoring of LIPA and PSEG adequate, he charged.

"This bill simply does not have proper oversight to protect Long Island ratepayers," Thiele said.

Assemb. Robert Sweeney (D-Lindenhurst), the bill's sponsor, defended the governor's proposal against mostly Republican criticism. "We are going to have ongoing continuing oversight of every action that LIPA takes," he said, noting the bill's checks and balances on unjustified rate increases, overhiring of staff and securing low interest rates on new debt offerings. "Those are some very significant changes and provide some very significant oversight that doesn't currently exist," he said.

"The major concern is service and the secondary concern is rates," Assemb. David McDonough (R-Merrick) said.

One lawmaker said while the bill doesn't have everything, it's important to move quickly to fix LIPA. "You can't get the whole package, we would like to get the whole package but you can't," said Assemb. Harvey Weisenberg (D-Long Beach), who said he supported the bill, which he co-sponsored, because LIPA doesn't have the time to waste.

Asked by Assemb. Joseph Saladino (R-Massapequa), "Can we give Long Island assurances we will be much better adapted and avoid the pitfalls" that dogged LIPA during Sandy, Sweeney said yes.

"Having a plan in place that is a professional, publicly developed plan . . . is what's going to happen under this bill," he said. "The differences between what we have now and what we have in the future will be very, very significant."

Assemb. Al Graf (R-Holbrook) said of the bill, "If this nonsense comes through and we pass this, there's more people that are going to be moving south, there are more businesses that are going to be moving south."

He called Cuomo a "bully," and said he was tired of the governor "trying to ram things down our throats." He called the bill "a piece of garbage" and said he wouldn't vote on it.

Assemb. Andrew Raia (R-Huntington) saluted Cuomo for "a very good first offer" on a tax settlement in his district, but said he wouldn't vote for the bill because he didn't have a settlement in hand. He noted LIPA has sued his district seeking $171 million in taxes.

"I need not tell anybody what would happen to their school districts if all of a sudden they got a bill for $171 million. They'd lock the doors and go home," Raia said.

Negotiations to settle the tax issue continued through most of Thursday. It wasn't clear this morning if a resolution had been reached.

Cuomo has said the bill gives Long Islanders a new utility with a strong track record for customer satisfaction, while promising a two-year rate freeze and commitments to green energy.

Steve Englebright (D-Setauket), in an interview, took note of the "epic journey" to the LIPA reform bill, and said, "I'm confident that what we have [in the new law] is dramatically better than what we had."

Sweeney said: "We see a need to do something. I congratulate the governor for taking on this subject."

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