Gov. Cuomo signs bill to privatize LIPA

Sponsored by

N.Y. Gov. Andrew Cuomo has signed into law a bill to privatize utility operations of Long Island Power Authority. New Jersey-based Public Service Electric and Gas Co. (PSEG) will take over many of LIPA's responsibilities.

“LIPA has offered lackluster service for too long, and after its failure to perform during Superstorm Sandy it was clear we needed a change," Cuomo said in a release.

The legislation also seeks to establish a rate freeze lasting until 2015, according to the release. The LIPA’s debt has not decreased since the late 1990s and represents almost 10 percent of ratepayer’s bill, according to Cuomo’s office.

The legislation signed July 29 will refinance up to half of the $6.7 billion debt at a lower interest rate and establish a 2 percent property tax cap for the transmission and distribution system.

LIPA will become a holding company and will be staffed only at the levels necessary to ensure the authority is able to meet its core obligations. LIPA’s board will also be reduced to nine members. The changes maintains the utility’s eligibility for FEMA and tax benefits, but “offers the benefit of PSEG Long Island’s more efficient management structure as a private company,” Cuomo’s office stated in a release.

The new system will remain under public ownership with tax exempt financing for new capital investments. It will also face tougher state oversight under a new Long Island office of the Department of Public Service that will have the authority to review PSEG Long Island’s operations and issue recommendations to the LIPA Board for implementation.

Cuomo had established a commission to investigate LIPA after Superstorm Sandy, which concluded the “LIPA’s failures were the result of a dysfunctional bifurcated management structure that allowed poor customer service, high rates, lackluster storm preparations and inadequate infrastructure to persist without being addressed,” according to the release.

Sponsored by

Get All the Electric Light & Power and POWERGRID International to Your Inbox

Subscribe to Electric Light & Power or POWERGRID International and the email newsletter today at no cost and receive the latest news and information.

Related Articles

New Mexico reviews power plan for Facebook data center


In its application, PNM says the agreement with Facebook would pay for a transmission line extension and provide the utili...

New York ISO doesn't need Ginna nuclear plant beyond March 2017


In the wings to rescue the Ginna plant is New York's new Clean Energy Standard

PJM authorizes transmission projects for units of Exelon, AEP, FirstEnergy


The proposal originated out of PJM’s competitive process for transmission improvements

West of Devers transmission project gets BLM environmental review


The BLM will not issue a final decision on the proposal for a minimum of 30 days after the date that the U.S. Environmenta...

VIDEO: PJM board approves $636 million investment in transmission projects


The $320 million market efficiency project is expected to alleviate transmission congestion across the Pennsylvania and Ma...

Entergy eyes construction of four gas-fired power projects


Two of the projects are not fully described


10-200 MW Modular Gas Recip. Power Plants: The preferred simple cycle power generation solution

Modular power plants with multiple natural gas reciprocating engines have become the preferred si...

Get Smart Turning PV Big Data into Actionable Information

Join DNV GL and GreenPowerMonitor for an informative, free webinar where you’ll get answers to th...

Fire Safety for Battery Energy Storage Systems: Practical Considerations for Fire Fighting, Ventilation, and What this Means for the Codes

DNV GL and Rescue Methods have been engaged on joint fire testing programs for energy storage sys...

Optimizing reliability indexes and operational efficiency with a centralized Self-healing solution

Utilities companies are constantly trying to improve quality and efficiency of distribution by in...

Moisture in Transformer Oil Behavior – a Deeper Look into a Complex Phenomenon

As our understanding of how moisture movement in transformers improves, so does the evolution of ...

POWERGRID International

July 2016
Volume 21, Issue 7