What is confusing and quite worrisome is that LIPA is only starting now with its review of the Maintenance Service Agreement (MSA) to determine its pension liability.
This issue has been a known by the LIPA Board Of Trustees for a very long time and now in the twelfth hour LIPA is “starting to review”, its potential obligations. This can only translate into, “Oop’s we missed that one, what do we do now?”
What makes this all the more concerning is that this obligation may cost the ratepayer potentially up to $600 Million. It is hard to believe that the Governor is allowing such willful mismanagement by LIPA to languish at the detriment of the ratepayer.
Pension Liability Excerpt
LIPA is reviewing the agreement, MSA, to determine which, if any, employee plan obligations need to be separated at the end of the MSA. Although LIPA has consistently funded the annual plan costs throughout the MSA term, NGES, National Grid Energy Services, has advised LIPA that there are pension and other employee plan benefit obligations that are currently substantially underfunded or unfunded (such as OPEBs, Other Post Employment Benefits). The nature and extent of LIPA’s potential obligation for such unfunded costs, if any, cannot be reasonably predicted at this time.