LIPA's official Irene tab: $176 million

The largest power restoration effort in Long Island history cost $176 million, the Long Island Power Authority reported Friday, as officials are set to begin separate probes into what went right and what went wrong in Tropical Storm Irene's aftermath.

At the same time, officials at a trustees meeting Friday said they will strongly resist increasing rates to recover the storm costs, which are more than double the $68 million LIPA paid to restore power after a 2010 nor'easter. About 523,000 customers were left in the dark after Irene ripped across the region in late August, and it cost an average of $336 per outage to restore power.

Contractor National Grid amassed a workforce of about 7,500 people, including 3,500 outside contractors who were housed, fed, transported and paid on LIPA's dime.

LIPA expects three-fourths of the costs -- all but $44 million -- to be reimbursed by federal disaster relief funds, although the timing of the reimbursements, certainly months away, could prove problematic.

LIPA chief Michael Hervey said he hoped to "absorb" the costs into LIPA's current rate structure without an increase, even though he acknowledged that all LIPA expenses are ultimately paid through customer rates.

Chairman Howard Steinberg told trustees he had "no appetite" for a rate increase to pay the costs, and added that LIPA would work "aggressively" to find savings in other costs, including property taxes, to obviate a rate hike.

Matthew Cordaro, co-chairman of the Suffolk County Legislature's LIPA oversight committee, countered that a rate increase might be needed because the authority had "run out of accounting gimmicks" to cover costs. LIPA offset part of last year's total of $200 million in storm costs through the discovery of $231 million in customer overcharges tied to power leakage on the system.

While he worried about how soon federal reimbursements would arrive, Hervey noted the authority had recently completed a $250-million bond offering and said he didn't expect the massive storm tab to hobble LIPA's cash flow.

It will likely take months and mountains of paperwork to apply for federal disaster funds. LIPA last year received about $50 million to cover the $68-million cost of the March nor'easter.

Trustee David Calone and other officials will conduct a review that examines restoration and communications efforts separately. That review is separate from one that LIPA will undertake. Aides to Gov. Andrew M. Cuomo said this week that LIPA also will provide information to the Public Service Commission, which is conducting a comprehensive storm review statewide.

"Clearly some aspects of the storm response were unacceptable," said Calone, noting most trustees were without power for "several days."

Steinberg said the review will be thorough and aimed at real fixes. "We can't ignore or excuse the failings of what happened in Irene," he said, adding that the board was "not going to shy away from facing up to the problems and insisting that solutions are found and implemented."

And as he has before, he took sharp aim at contractor National Grid, even as he applauded the line workers who restored power. "It's also more than high time that we stop acting like we control the process and finally acknowledge that it's National Grid that really controls what happens in the field," Steinberg said. "They own the systems, they dispatch the crews, they run the show."

With Yancey Roy