As the October 6th LIPA Trustees decision date on a new structure and major operating contract approaches, it is disconcerting that LIPA and its Brattle Group consultant have made no public mention of the $600 million unfunded pension dispute with National Grid. As a minimum this issue should have been addressed as a risk, assumption or constraint with in the content of the Brattle report.
If LIPA actually owes this large sum to National Grid, could it have an effect on what structure the utility will choose and does it give National Grid a real or implied advantage in the contact competition? Surely, Con Ed and PSE&G would like to know the answers to these questions.
Regardless if this issue does not factor into the decisions, which is hard to swallow, the sheer magnitude of this unfunded pension liability could have a serious impact on LIPA’s financial condition and ratepayers. As such, in the spirit of transparency, it deserves a complete public airing including an explanation why it was not prominently considered in the Brattle Report let alone its annual reporting and possible budget impact.
This is not a new issue and it has been banging around LIPA’s “hallways” for many years yet it seems to have been ignored as a “real issue”.
Perhaps the reason it has been heating up is that the timetable of the Pension Protection Act of 2006 which requires companies to fully fund defined-benefit pension plans over seven years is quickly coming to an end?…..specifically 4 months before the existing National Grid contract expires at the end of 2013?
This is yet another issue for the Inspector Generals Audit ordered by the Governor to take up and a reason why LIPA should delay the October 6th decision date. There are just too many questions to be answered before rushing to judgment. The public needs more unbiased information before it can accept what the LIPA Board of Trustees may settle upon.