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LIPA gets $267M initial federal reimbursement

A Long Island Power Authority in Belle Harbor,

A Long Island Power Authority in Belle Harbor, Queens. (Nov. 12, 2012) Photo Credit: AP

The Long Island Power Authority Friday was cleared to receive $267.3 million in federal reimbursements as a first installment for restoration work following superstorm Sandy.

The payment would come none too soon for LIPA, which has resorted to borrowing to help fund operations as it pays the $800-million-plus bill for Sandy.

According to a Federal Emergency Management Agency document outlining the award, LIPA was approved for the amount for "repairs to disaster-damaged overhead power distribution lines and components, including repair labor, materials" and tree-trimming after Sandy. It covers work done between Oct. 26 and Feb. 13.

More than 14,000 workers, the vast majority from out of state, helped LIPA restore more than 1.2 million outages as a result of Sandy, which ravaged LIPA substations, knocked down poles and disconnected power lines.

The notification, provided to Newsday by Sen. Charles Schumer (D-N.Y.), who pushed for faster payment, says the payment is the first for LIPA, and that more funds are expected to follow.

LIPA originally estimated the costs at $950 million, but has since dialed the number back to $800 million. It anticipates that at least 75 percent was eligible for federal reimbursement, but that percentage is expected to hit 90 percent because the total damage to New York State is expected to exceed a federal requirement.

LIPA expects that ratepayers will have to foot the bill for around $80 million in unreimbursed costs, which it plans to collect starting next year, and spread over 10 years.

LIPA spokesman Mark Gross confirmed the award, saying, "Yes, we were aware it was being processed." A FEMA spokesman in New York wasn't able to comment Friday afternoon.

Schumer, who was first alerted to the amount Friday, said in a statement, "Superstorm Sandy wreaked massive havoc on Long Island's power grid and this desperately needed federal relief means LIPA won't have to tap its already hard-pressed ratepayers to foot the bill for repair."

Said Schumer, "Though LIPA did a poor job during and after Sandy, it was important to get these funds to them quickly so they can continue to make repairs, keep the lights on, and avoid taking on additional high interest debt that would eventually be passed on the ratepayers."

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