Lawmakers fault LIPA credit checks

Two Suffolk lawmakers are demanding answers in the wake of reports that LIPA is reviewing the credit records of all commercial customers and requiring some to pony up hefty security deposits or face a shutoff.

The topic, reported in Newsday on Tuesday, was discussed Wednesday at the first meeting of the Suffolk Legislature's newly formed LIPA oversight committee. The committee, composed of energy experts and two former LIPA trustees, was formed to provide a check on the authority's operations amid concerns about high rates, overcharges and future energy plans. The committee has no legal authority over LIPA.

The letter being sent to LIPA notes that the authority is undertaking the credit scrutiny at a time of economic distress on Long Island. It requests information about the grounds for LIPA's credit checks, which are being conducted using Dun & Bradstreet and Experian credit services. One LIPA customer who received a letter was threatened with a disconnect notice unless he provided a $5,025 deposit, letter of credit or surety bond, or could otherwise show that the credit agency analysis of his finances were incorrect.

Suffolk Legis. Wayne Horsley (D-Babylon) and Edward Romaine (R-Center Moriches) called the credit checks "logic defying," "overreaching and invasive." "They will cause businesses already struggling in these harsh economic times to dig deeper into their coffers to give up more money for something essential to their business, your electricity," the legislators wrote.

LIPA spokeswoman Vanessa Baird-Streeter said it conducts such credit checks of commercial customers periodically, and claimed only 35 such letters went out in the most recent "cycle."LIPA didn't say how many cycles were recently initiated.

Baird-Streeter said the practice is common among state utilities, and argued it protects the bulk of LIPA ratepayers who ultimately pay the cost when a nonpaying customer defaults. With James Bernstein