PSEG to run most of New York's LIPA utility

NEW YORK Mon May 13, 2013 5:31pm EDT

New York Governor Andrew Cuomo talks about the New York Secure Ammunition and Firearms Enforcement Act in Albany, New York January 15, 2013. REUTERS/Hans Pennink

New York Governor Andrew Cuomo talks about the New York Secure Ammunition and Firearms Enforcement Act in Albany, New York January 15, 2013.

Credit: Reuters/Hans Pennink

NEW YORK (Reuters) - Long Island Power Authority, a state-owned New York utility company that was criticized for its response during last year's Superstorm Sandy, will see most of its operations taken over by a private company, New York Governor Andrew Cuomo said on Monday.

Public Service Enterprise Group Inc (PEG.N), a private utility in neighboring New Jersey, will take over management of LIPA's operations next year. Lawmakers faulted a bifurcated system where operations were partly run through a services agreement with UK power company National Grid Plc (NG.L).

Sandy in October left more than 90 percent of the 1.1 million LIPA customers on Long Island without power, some for more than two weeks.

LIPA's services agreement with National Grid is due to expire at the end of 2013. PSE&G was already set to take over as the system's operator but the governor's proposal will see that role expanded to take over most of the company's operations.

"LIPA is broken and LIPA has to go away," Cuomo said at a press conference in the state capital Albany. "We need a new and better way to provide utility services on Long Island."

LIPA will, however, remain a state-owned holding company that will allow it to receive federal disaster funding and certain tax advantages, Cuomo said. The governor also cited "philosophical reasons" for keeping LIPA in state hands. He did not elaborate.

The governor said the proposal includes a change in the law that allows LIPA to refinance half of its $6.7 billion debt at lower interest rates. About 10 percent of consumers' energy bills under LIPA are made up of debt payments, the governor said.

The proposal will also cut the number of LIPA board members to five from 15 and LIPA staff to about 20 from 90.

(Reporting by Edward Krudy; Editing by Phil Berlowitz)

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Comments (1)
MichaelRS wrote:
Here’s the reality… Under Cuomo NY has experienced the demise of 39,453 NY state businesses last year, Cuomo is raiding $1.75 billion from the reserves of the already over budget State Insurance Fund (SIF). Cuomo can not even hold on to his democratic majority which is in the middle of a corruption scandal with “show-me-the-money culture” and “pay-to-play politics” throughout Albany. Cuomo has disenfranchised the Northern and Western part of New York with his SAFE Act. Cuomo is afraid to make a decision, either way with respect to fracking, gambling or abortions. No matter what your position is, Cuomo is leaving New Yorkers with no resolution to these issues or the ability to move forward. New York has the highest taxes in the nation, is the most indebted state, with 33 percent of income dedicated to borrowing. It is ranked as the least “business-friendly” state in the country and if that were not bad enough NY has the distinction of being the least free state in the union and is called the “Nanny State” with politicians legislating what we eat and drink. Municipal governments from Nassau County to Yonkers to Syracuse are teetering. And during Mr. Cuomo’s time in office, unemployment has risen above the national average. 9% of the state’s 2000 population left for another state between 2000 and 2011 — the highest such figure in the nation, see the study by George Mason’s independent libertarian-leaning Mercatus Center.

May 13, 2013 10:28pm EDT  --  Report as abuse
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