Flickering LIPA needs a jolt

The Long Island Power Authority is perpetually caught in storms of its own making. The latest ones include overcollecting on energy bills, overcharges for fuel, overspending for storm preparation and overpayments in taxes for aging power plants.

Overall, each of these issues will get examined. Taken together, however, the swirling controversies should sound an even louder alarm in Albany that LIPA needs a much bigger fix to restore confidence in the utility and contain the costs of electricity.

Gov. Andrew M. Cuomo, displaying increasing dissatisfaction with LIPA, has directed Ellen Biben, the state's inspector general, to get answers about billing errors and rate-making decisions. Biben, who was also tapped to investigate the failures of the Nassau County police crime laboratory, might well consider a short-term rental in Mineola. (Does she have any expertise in serial killers?)

Cuomo's challenge, however, is more than documenting LIPA's mishaps. He needs to chart an intelligent course for LIPA's future. The first step toward this deeper involvement would be the appointment of two utility-savvy trustees to fill upcoming vacancies on the agency's board, people who can take a lead role in choosing a new management team.

In coming weeks, Biben will be examining the overcollection of $230 million, over a decade, to recoup the cost of power that evaporates during transmission, and another $136 million from charging ratepayers too much last year for fuel. Long Islanders also want to know why they are on the hook for at least $33 million to cover the cost of out-of-area crews called in early for Hurricane Earl last year and then kept on standby after it was clear that the storm had lost its potency.

While LIPA practices have been audited by outsiders before, as well as challenged in lawsuits, Biben is likely to find that its management is linked to its political heritage. Former longtime chief Richard Kessel, now the embattled head of the New York Power Authority, was followed by Kevin Law, now president of the Long Island Association. Both were keenly aware of the political consequences of their decisions. With their background, overspending for extra crews would make sense to avoid a loud public outcry over delays in restoring power. However, when LIPA's current chief operating officer, Michael Hervey, who is a utility executive, did not immediately refund all of the $230 million overcollected for lost power, he was soundly criticized by elected officials for being politically out of touch.

While few major decisions by LIPA haven't been influenced by political consequences, that doesn't mean it can't operate efficiently and economically as a public authority in the future. That was the reason for the state's initial takeover. The other option, selling its assets to a private utility, should be considered, but convincing evidence will have to be produced to show that ratepayers can save while shareholders collect.

In September, LIPA is scheduled to award a long-term contract to manage the delivery of electricity. That decision shouldn't be rushed. Instead, the current operator, National Grid, could be asked to extend its management to keep LIPA and the governor's focus on developing a strategic plan.

Solving the contradiction of LIPA could be Cuomo's legacy for Long Island. Until then, it's likely to be just one storm after another.