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State DPS: DiNapoli report on LIPA act 'simply wrong'

New York State Comptroller Thomas DiNapoli is seen

New York State Comptroller Thomas DiNapoli is seen in this photo from Sept. 19, 2014. Credit: AP

The state Department of Public Service Friday struck back at a report by state Comptroller Thomas DiNapoli that said the LIPA Reform Act has left Long Islanders facing higher rates, more debt and less oversight, calling his analysis "simply wrong."

Pointing to a three-year rate freeze and the "unprecedented" oversight now in place, DPS called the 2013 reform act "a success" that has brought a "full-blown" review of a proposed 3.2 percent rate hike and a debt refinancing that will save ratepayers "hundreds of millions of dollars."

DiNapoli's report, released as LIPA and PSEG Long Island rate proceedings are concluding, was timed to have an impact on those proceedings, he said Thursday. But the DPS said DiNapoli "could have joined as a party" in the rate case, allowing his office access to considerably more information and allowing it direct input into the revenue requests.

"Instead, he chose to attack from sidelines rather than doing the work necessary to constructively participate in the rate case," the department said in a statement, calling DiNapoli's report "political."

But others applauded the report and one even urged DiNapoli to go further.

Brookhaven Supervisor Edward Romaine said he was grateful the comptroller appeared to heed his request to focus scrutiny on the LIPA-PSEG rate hike.

"This report further buttresses our call for an audit from the state comptroller so we get accurate numbers and an independent review," Romaine said.

George Maragos, Nassau County's comptroller, applauded DiNapoli's examination of the PSEG contract with LIPA, including its move to strip away DiNapoli's former role scrutinizing contracts.

"I think the whole agreement between the state and PSEG has to be rethought and more controls put in place," said Maragos, who has criticized the rate hike.

Jennifer Freeman, a spokeswoman for DiNapoli, said, "We'll let LIPA ratepayers judge whether the latest reforms are working or not. We stand behind the findings of our report."

PSEG also challenged the report, saying reliability, storm response, call center and other measures have improved on its watch. LIPA spokesman Sid Nathan said the reform act requires LIPA work with PSEG to bring "the most efficient and lowest cost service to customers and that is what we will continue to do."

Assemb. Fred Thiele (I-Sag Harbor) applauded the comptroller's report, saying it mirrored concerns he voiced in opposing the law.

Thiele called "ludicrous" the DPS' characterization of the reform act as a success.

"We are currently facing a substantial rate increase that Long Islanders can't afford," Thiele said in a statement. "DPS has bungled the review with major mistakes and has totally lost public confidence."

But DPS officials say it's DiNapoli's office that got it wrong. It pointed to increased transparency through public rate hearings and noted that its oversight of PSEG has increased to unprecedented levels for LIPA.

"There is no difference between DPS' role for PSEG and for any other utility in New York," the department said.

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