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Cuomo declares end to 'tragedy of LIPA'


4. LIPA CEDES CONTROL TO PSEG - After questions were raised about LIPA's management, finances and response time after superstorm Sandy, Gov. Andrew M. Cuomo proposed a plan that gave PSEG, a New Jersey utility company, nearly complete control of the Long Island power grid, replacing the LIPA brand with a new entity, PSEG-LI. On Oct. 3, LIPA trustees approved Cuomo's effort to reform the utility. Read the full story Credit: Steve Pfost

Gov. Andrew M. Cuomo Monday declared an end to the "tragedy of LIPA" as he signed reform legislation that greatly shrinks the 15-year-old utility.

At an appearance in Uniondale, Cuomo went so far as to rip a LIPA logo from a prop utility repair truck. He later slapped a magnetic logo of PSEG, the Newark company that will replace LIPA, onto the truck, saying LIPA's successor would bring much-needed change.

Surrounded by a contingent of state and local lawmakers, Cuomo blasted away at LIPA for being "wasteful, expensive and incompetent" -- a "bad combination of things, especially in a utility company." No LIPA officials or trustees were at the signing ceremony.

He promised the new utility would hold rates -- the delivery-charge portion of bills only -- until January 2016, and bring a new level of "professionalism" that ratepayers were unaccustomed to.

Asked later how LIPA could finance a fortifying and upgrading of the electric grid with a three-year rate freeze in place, Cuomo said it wasn't all about "more money.

"You have to operate the utility better," he said. "LIPA's answer to everything was more money, more money, more money. We don't have more money. You can't keep putting your hand in the pocket of the ratepayers. That's not the answer. The answer is, use the money you have better."

He said he was confident PSEG would be able to "figure it out. "We went and got the best utility we could find," he said. "I do believe they will be significantly better than LIPA."

LIPA as the local utility brand still has five months left on the job, with National Grid USA as the utility behind it, until PSEG takes over in January. Most of the more than 1,200 employees who will work in the field and in customer offices for PSEG will be the same unionized workers who currently work for National Grid.

Critics of the legislation, including some who protested outside the ceremony a few hundred yards from LIPA's headquarters in Uniondale, argue the bill was too hastily signed, and could mean higher rates.

"There hasn't been any transparency in this thing and that was the problem before," said the Rev. Martin Curtin, a member of the Long Island Congregations Associations and Neighborhoods, which is made up of religious and nonreligious institutions from Nassau and Suffolk. Curtin is assistant pastor of St. Joseph the Worker Roman Catholic Church in East Patchogue.

Cuomo held two public meetings in advance of the bill's passage, but some who attended said critical speakers were pushed to the end of the roster. It led to a screaming match during the second night of meetings.

Curtin pointed to LIPA's decision last week to move forward with a plan to have a plant developer build a new 707-megawatt plant in Yaphank that will increase 2018 rates up to 3 percent. "We're hostage to this," he said.

Peter Maniscalco, a one-time anti-Shoreham nuclear plant activist, said a new Long Island Ratepayer Coalition will seek to make LIPA a fully public power company, not run by a private entity. He said he believes the need for an Internal Revenue Service declaration that LIPA can maintain its tax-free debt status is the "weak link" in the legislation's future.

LIPA trustee Matthew Cordaro expressed concern that ratepayers still don't have a cost analysis of the expanded PSEG contract, and whether it makes sense from a rate perspective.

"It's compounding the errors of his father in establishing LIPA to begin with," he said. LIPA was launched during the administration of Cuomo's father, then-Gov. Mario Cuomo. Officials including Suffolk County Executive Steve Bellone hailed Cuomo's bill, saying the utility "will be reformed once and for all." He said his "days of camping out at LIPA substations will be over," a reference to his disputes with LIPA during superstorm Sandy.

Senate Majority Leader Dean Skelos (R-Rockville Centre) praised Cuomo for "taking the bold steps" in the "great" legislation, which he said would "restore the people's faith in the utility."

LIPA employees, many of whom worked round the clock during the storm, in the past have defended their work during Sandy, and critics have noted that Cuomo's administration had numerous staffers on the ground on Long Island, including from the New York Power Authority and the state Public Service Commission.

Bill sponsor Assemb. Robert Sweeney (D-Lindenhurst) pointed to a new Long Island branch of the Department of Public Service in saying LIPA would have oversight "that has been missing for a very long time."

Senate Majority Leader Dean Skelos (R-Rockville Centre) praised Cuomo for "taking the bold steps" in the "great" legislation, which he said would "restore the people's faith in the utility."

Cuomo called the legislation "the silver lining" after the disaster of Sandy, which exposed, he said, all of LIPA's shortcomings.

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