NEW YORK, March 3 The Long Island Power
Authority (LIPA) is no longer facing the risk of an imminent
downgrade to its credit rating but the long-term outlook for the
New York state utility company is still negative, Standard &
Poor's Ratings Services said on Monday.
LIPA, a public entity which was heavily criticized for its
response to Superstorm Sandy in 2012, was overhauled by the
state last year. Its debt was restructured and New Jersey
utility PSEG was brought in to manage the firm's operations.
S&P credit analyst David Bodek said the securitization of
nearly $2 billion would not lower customer bills as the
restructuring had intended, which could inhibit the firm's
"Combined securitization and unsecuritized debt service will
closely parallel pre-securitization debt service, which could
perpetuate customers' and politicians' rancor regarding the
utility's rates and potentially constrain financial
flexibility," he said.
LIPA had around $7 billion of debt, a large part of which
relates to the cost of constructing and financing the
now-abandoned Shoreham nuclear power plant. The state said
during the restructuring debt service costs were about 10
percent of consumer bills.
S&P placed LIPA on credit watch in July last year. The
agency rates LIPA A-minus, a medium investment grade, with a