NEW YORK, June 19 New York lawmakers announced a
deal on Wednesday to privatize utility operations on Long Island
and revamp the Long Island Power Authority, a state-owned New
York utility company that was criticized for its response during
last year's Superstorm Sandy.
The deal, announced by Governor Andrew Cuomo, includes a
rate freeze through 2015.
Public Service Enterprise Group Inc, a private
utility in neighboring New Jersey, will take over management of
LIPA's operations. Lawmakers faulted a bifurcated system where
operations were partly run through a services agreement with
power company National Grid Plc.
"For years, LIPA has provided lackluster service while
asking ratepayers to foot the bill for its financial problems.
LIPA's failure during Superstorm Sandy was a wakeup call for
action," Cuomo said in announcing the deal with the majority
leaders of both houses of the state legislature.
After Sandy slammed into the northeastern tip of the United
States last October, more than 90 percent of the 1.1 million
LIPA customers on Long Island were left 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.
PSE&G will assume full authority over the utility's
day-to-day operations including budgeting, maintenance, storm
preparedness and response and infrastructure improvements.
LIPA will in effect be reduced to a holding company with a
significantly reduced staff, which will allow the state to
maintain its eligibility for FEMA and tax benefits.