Tell Your Senator To Slow The LIPA Process Down, We Cannot Afford Not Too…


There are very disquieting rumors that pressure is being applied to our very strong Senate delegation to support the Governor’s hastily cobbled together LIPA restructuring legislation.

Please know that the LIPA Oversight Committee is here to support a new proposal for a measured and thoughtfully developed approach for restructuring LIPA.

Too many years have gone by, and too many dollars have been wasted, without the potential of the LIPA statute being realized.

Do not allow our Senate delegation be rushed into a decision in three days, which will undoubtedly bind the ratepayers of LI for decades to come.

You must not permit solutions to near term problems to outweigh the necessary long term solutions our residents and their children must have.

Call your Senator today and ask them “What is the rush?” and to slow the process down to ensure another mistake is not made as with the creation of LIPA….

Senator LaValle:

 

Albany Office

188 State Street Room 806, Legislative Office Building

Albany, NY12247

United States

Phone:(518) 455-3121

See map: Google Maps

 

District Office

28 North Country Rd Suite 203

Mount Sinai, NY11766

United States

Phone:(631) 473-1461

Fax:(631) 473-1513

See map: Google Maps
Email address: lavalle@nysenate.gov

 

 

District Office

4155 Veterans Highway Suite 5

Ronkonkoma, NY11779

United States

Phone:631-585-0608

Fax:631-585-0858

See map: Google Maps

 

 

Albany Office

Legislative Office Building Room 802

Albany, NY12247

United States

 

 

Senator Flanagan

 

Phone:518-455-3570

Fax:518-426-6741

See map: Google Maps

District Office

NYS Office Building

Hauppauge, NY11788

United States

Phone:631-360-3356

Fax:631-360-3269

See map: Google Maps

 

District Office

260 Middle Country Road Suite 102

Smithtown, NY11787

United States

Phone:631-361-2154

Fax:631-361-5367

See map: Google Maps

 

Albany Office

Room 805 Legislative Office Building

Albany, NY12247

United States

Phone:518-455-2071

Fax:518-426-6904

See map: Google Maps
Email address: flanagan@nysenate.gov

 

 

 

 

 

 

Senator Boyle

 

District Office

 

69 W. Main Street

Bay Shore, NY11706

United States

Phone:(631) 665-2311

See map: Google Maps

 

Albany Office

 

814 Legislative Office Building

Albany, NY12247

United States

Phone:(518) 455-3411

See map: Google Maps
Email address: pboyle@nysenate.gov

 

 

Senator Marcelli

 

Albany Office

 

188 State Street Room 811, Legislative Office Building

Albany, NY12247

United States

Phone:(518) 455-2390

See map: Google Maps

 

District Office

 

250 Townsend Square

Oyster Bay, NY11771

United States

Phone:(516) 922-1811

See map: Google Maps
Email address: marcelli@senate.state.ny.us

 

 

 

Senator Hannon

 

 

Albany Office

The Capitol Room 420

Albany, NY12247

United States

Phone:518-455-2200

See map: Google Maps

 

District Office

595 Stewart Ave. Suite, 540

Garden City, NY11530

United States

Phone:516-739-1700

See map: Google Maps
Email address: hannon@nysenate.gov

 

 

Senator Fuschill

 

Albany Office

 

188 State Street Room 609, Legislative Office Building

Albany, NY12247

United States

Phone:518-455-3341

See map: Google Maps

 

District Office

 

5550 Merrick Road Suite 205

Massapequa, NY11758-6238

United States

Phone:516-882-0630

Fax:516-882-0636

See map: Google Maps

 

 

Email address: fuschill@nysenate.gov

 

 

Senator Martins

 

Albany Office

Legislative Office Building, Room 946

Albany, NY12247

United States

Phone:518-455-3265

Fax:518-426-6739

See map: Google Maps

District Office

151 Herricks Road, Suite 202

Garden City Park, NY11040

United States

Phone:516-746-5924

Fax:516-746-0439

See map: Google Maps

 

 

Email address: martins@nysenate.gov

 

Albany Office

Legislative Office Building, Room 909

Albany, NY12247

United States

Phone:(518) 455-3171

See map: Google Maps

District Office

55 Front Street

Rockville Centre, NY11570

United States

Phone:(516) 766-8383

See map: Google Maps
Email address: skelos@nysenate.gov

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Amendments to LIPA Bill


Amendments to LIPA Bill

 

  • Authorize LIPA and PSEG to amend Operating Service Agreement without being subject to Office State Comptroller approval and public bidding: provided that final agreement would be subject to Department of Public Service review and recommendation.

 

  • Office State Comptroller would have pre-approval of LIPA contracts and public bidding would remain: but Office State Comptroller would not have pre-approval over contracts between PSEG and third parties

 

  • Ability for Department of Public Service to make recommendations on incentive compensation and liability for imprudent/unreasonable storm costs

 

  • Cannot modify or recommend modify of underlying contract compensation

 

  •  LIPA staffing at minimum levels

 

  •  9 member LIPA board (5 appointed from Governor and 4 from Legislature)

 

  •  PSEG would be required to post contracts semi-annually over $250K on website

 

  •  Securitization: Public Authorities Control Board review 30 days up or down

 

  •  Eliminate $26 million state franchise tax

 

  •  PILOT cap at 2% increase

 

  •  Aspirational renewable /solar language including maintaining programs recently approved by LIPA board. 100MW solar feed-in, 20 MW renewable feed-in tariff and 280 MW renewable RFP
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Storm clouds gather over LIPA revamp – By George J. Marlin


Storm clouds gather over LIPA revamp – By George J. Marlin

The following appears in the June 7-13, 2013 issue of the Long Island Business News:

Since Gov. Andrew Cuomo unveiled his LIPA reorganization proposal last month there has been plenty of public weeping and gnashing of teeth, much of it justified.

The lowering of LIPA’s bond rating by Moody’s Investor Services to borderline junk, BAA1 from A3, did not help the governor’s cause. LIPA, Moody pointed out, has “little, if any, cushion for the unforeseen events that seem to occur every year.”

Political interference, Moody concluded, could make it “increasingly challenging for the board to take steps to systematically enhance the long-term financial and operational stability of the utilities, particularly if those actions would lead to rate increases.”

The feasibility of the governor’s pledge to freeze rates for three years has also been challenged.

The Director of Evercore Wealth Management’s municipal research department, Howard Cure, observed, “To start off with saying we’re not going to have any rate increases for three years when there’s a lot of capital needs – the math doesn’t work for me.”

The loudest complaints have been over the political decision to continue the $586 million in annual PILOT payments to local municipalities and school districts. Many commercial real estate proprietors and homeowners are tired of subsidizing municipal entities in which they do not own property or reside.

I, for instance, live in the New Hyde Park school district and paid about $9,000 in taxes this past school year. Because 15 percent of my monthly LIPA payments go to PILOTs, I also contribute year in and year out to the operating budgets of other school districts where LIPA owns land. That is truly “taxation without representation.”

Eliminating these egregious PILOTs could lower rates or at the very least freeze rates. Also, the revenues could be used to finance much needed capital improvements.

Another concern is the review and oversight of LIPA contracts over $50,000. Cuomo’s plan would amend Public Authority Law Section 1020-CC to eliminate the present requirement that “all contracts of the Authority shall be subject to the provisions of the state finance law relating to contracts made by the state.”

Such a change in the LIPA statute would cut the office of the State Comptroller out of the process to review and approve contracts. This in turn could open a new era in crony capitalism.

Finally, there is the issue of the proposed “advise and recommend” role of the Department of Public Service. Many are fearful that DPS will be a toothless tiger permitting the new five-member board to run wild.

The Cuomo administration has defended this structure, pointing out that LIPA bond covenants prohibit direct DPS control over rates and management.

This claim is substantially true. The rating agencies prefer public utilities to be free from crawling through state bureaucratic mazes to get approval for rate increases in order to meet principal and interest payments on outstanding debt.

Nevertheless, the DPS will not be opening an office in Long Island merely to take in the sights. Hovering over the LIPA board, scrutinizing budgets and capital project plans, utilizing the bully pulpit and issuing critical public edicts of board practices or policies, will most likely keep the trustees on the path of righteousness.

The clock is ticking. The governor has only a month to get a LIPA reorganization plan through the state Legislature and hurricane season is rapidly approaching. This may mean Cuomo will have to put aside his pride and address some of the issues raised here and by other critics.

If Cuomo fails and Long Island gets hit with another Sandy debacle, he will not be able to evade responsibility for the miserable response of one of his state agencies as he did last year. The finger he will be able to point will only be at himself.

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Op Ed: need for accountability and oversight involving lipa restructuring


LONG ISLAND COMMUNITY NEWS RELEASES

   For Immediate Release: June 10, 2013

   Op Ed: Need for Accountability and Oversight Involving LIPA Restructuring

Long Island Press Releases —
Assemblyman Hennessey on LIPA Restructuring: Oversight, Rates, PILOTS:

(Long Island, NY) Govern
Continue reading

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Freedom Of Information Request Submitted to Moreland Commission For LIPA Restructuring Proposal


Dear Moreland Commission Records Access Officer:

Please email the following records if possible (include as much detail about the record as possible, such as relevant dates, names, descriptions, etc.): 

“All detailed records associated to the analysis, correspondence, discussions and or consultant advisory opinions of the Governors restructuring proposals, including but limited to comparisons to other alternatives, specifically full municipalization and any and all detail regarding the Internal Revenue Service.”

OR

Please inform me of the cost of providing paper copies of the following records (include as much detail about the records as possible, including relevant dates, names, descriptions, etc.). 


AND/OR

If all of the requested records cannot be emailed to me, please inform me by email of the portions that can be emailed and advise me of the cost for reproducing the remainder of the records requested ($0.25 per page or actual cost of reproduction).

If the requested records cannot be emailed to me due to the volume of records identified in response to my request, please advise me of the actual cost of copying all records onto a CD or floppy disk.

If my request is too broad or does not reasonably describe the records, please contact me via email so that I may clarify my request, and when appropriate inform me of the manner in which records are filed, retrieved or generated.

If for any reason any portion of my request is denied, please inform me of the reasons for the denial in writing and provide the name, address and email address of the person or body to whom an appeal should be directed.

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RESOLUTION OF LIPA OVERSIGHT COMMITTEE


THE LIPA OVERSIGHT COMMITTEE, HAVING CONSIDERED  AND EVALUATED THE PROBLEMATIC LEGAL, FINANCIAL, IRS, REGULATORY,AND ECONOMIC ISSUES PRESENTED BY GOVERNOR CUOMO’S LIPA REORGANIZATION BILL,  AND  THE PROPOSED AMENDMENTS TO THE OPERATIONS SERVICE AGREEMENT BETWEEN LIPA AND PSE&G, AND  HAVING ALSO REVIEWED THE STATEMENTS AND MATERIALS SUBMITTED BY THE GOVERNOR ,   THE STATE COMPTROLLER,  NEW YORK STATE ASSEMBLY MEMBERS, THE COMMENTS OF THE PARTICIPANTS AT THE PUBLIC MEETINGS  IN NASSAU AND SUFFOLK COUNTIES, AND THE MEDIA,

UPON MOTION DULY MADE ,  AND  SECONDED,   ADOPTED ON JUNE 7, 2013,  THE FOLLOWING RESOLUTION :

RESOLVED: THAT THE LIOC OPPOSES, AND RECOMMENDS THAT THE SUFFOLK COUNTY LEGISLATURE OPPOSE THE  ENACTMENT OF THE BILL IN ITS PRESENT FORM, IN THIS OR ANY FUTURE LEGISLATIVE SESSION, AND DEMANDS THAT THE BILL, AND ANY PROPOSED CHANGES TO THE OSA BETWSEEN LIPA AND PSE&G, BE AMENDED, AFTER MANDATORY ADVANCE NOTICES, PUBLIC HEARINGS, AND APPROVALS AND RULINGS,  BY THE STATE COMPTROLLER, PSC, AND IRS,  TO INCLUDE  AS CONDITIONS PRECEDENT TO ENACTMENT, PROVISIONS THAT WILL CURE THE  DEFECTS IN THE BILL, AND THE PROPOSED NEW OSA.,  PROTECT THE INTERESTS OF THE RATE PAYERS, TAXPAYERS, AND BONDHOLDERS, AND ASSURE LIPA’S CONTINUED STATUS AS A FINANCIALLY  VIABLE TAX EXEMPT PUBLIC POWER AUTHORITY.

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DiNapoli: LIPA plan doesn’t protect customers


June 5, 2013 3:19 PM   By MARK HARRINGTON Newsday

State Comptroller Thomas DiNapoli, in a preliminary analysis of Gov. Andrew M. Cuomo’s proposal to restructure LIPA, raises questions about lessened accountability and oversight and whether the new utility would be able to maintain its tax-exempt status.

DiNapoli provided the analysis to state lawmakers Tuesday, a day before public hearings on the new legislation are scheduled to take place on Long Island. DiNapoli’s oversight role at LIPA in reviewing contracts would be eliminated under Cuomo’s bill.

Because the legislation as written would allow LIPA alone to negotiate terms of an amended contract with new system operator, PSEG, “virtually all existing laws that relate to transparency, accountability, oversight, and best practices to ensure lowest costs and protection of ratepayers would be effectively bypassed,” under Cuomo’s proposal, the analysis says.


EXPLORE: Employee-politician connections | LIPA salaries MORE: Report on LIPA’s Irene response | Utility ignored 2006 warnings PHOTOS: LIPA protest | Stunning scenes from Sandy


Among those entities that normally review LIPA contracts is the state comptroller himself, who would be excluded from approving the new PSEG contract, and all future contracts. DiNapoli, noting Cuomo’s proposal considers comptroller review “redundant and unnecessary,” disagreed, saying it’s an important check. The analysis notes that because it’s still not known precisely how LIPA’s new contract with PSEG will be changed, “it is impossible to assess whether sufficient public control would be preserved to maintain LIPA’s public ownership tax-exempt status.”

“The pre-approval function of the comptroller provides a mechanism to ensure that Long Island ratepayers are protected fiscally and from a public safety perspective, and should be preserved,” the analysis says.

Further noting that the legislation would eliminate competitive bidding requirements for certain LIPA contracts, the comptroller’s analysis asserts that they should be preserved because they help guarantee better, cheaper goods and services and “greater openness and transparency.”

In a statement in response to DiNapoli’s analysis, Cuomo spokesman Matthew Wing defended the governor’s proposal.

“Unlike nearly every resident on Long Island, Comptroller DiNapoli wants to preserve the broken LIPA status quo when it has time and again failed on performance, customer service and most of all during superstorm Sandy,” he said, suggesting DiNapoli “wants to keep in place a bifurcated structure with LIPA acting as its on operator and regulator — the very structure that the Moreland Commission found was dysfunctional and ineffective. This is not an option that Long Islanders want and, especially given the response after Sandy, not an option the Governor is willing to accept.”

Wing said Cuomo “has proposed what Long Islanders have been calling for: a new utility structure that would keep rates affordable, improve performance and disaster preparedness, and create real accountability through DPS oversight, ending the accountability loophole that has allowed LIPA to avoid facing responsibility for its failures.”

The comptroller’s analysis takes issue with Cuomo’s idea of creating an entity to issue so-called restructuring bonds to refinance a portion of the LIPA debt. It notes the new bonds wouldn’t be subject to Public Authority Control Board approval, that ratepayers would be subject to new “transition charges,” atop existing rates, and that it’s unclear how much of LIPA’s debt would be restructured.

“It is unclear what regulatory or statutory mechanism would protect ratepayers against the erosion of checks and balances, transparency and accountability in the constitution and operation” of the new bond issuing entity, DiNapoli’s analysis says, “and in the shifting of debt from LIPA to the new entity. The proposal as currently structured seems to lack basic financial limitations or parameters on the issuance of restructuring bonds.”

DiNapoli’s analysis also raises questions about how LIPA budgets will be drawn up and executed, noting that they are now approved by LIPA’s board of trustees.

“It is unclear how this control and public accountability will be preserved, if budgeting is shifted to PSEG and no regulatory entity is authorized to impose restrictions on costs,” the analysis says.

The analysis takes issue with the new Department of Public Service entity that would be created to monitor the new utility’s operations, noting it has only limited enforcement powers.

“The bill does not identify a new entity to provide regulatory oversight of LIPA and PSEG, other than the new” Long Island Department of Public Service entity, “which is given power to ‘audit, review and make recommendations’ without the power to enforce such recommendations.”

It notes that while the DPS entity would review any rate increase greater than 2.5 percent, LIPA’s board could choose “not to abide” by the DPS’ rate recommendations, after public hearings.

In the end, the analysis states, Cuomo’s bill “does not provide Long Island ratepayers with the same protections afforded ratepayers in the rest of the State.”

A senior Cuomo administration official who asked not to be identified called it “unfortunate” that DiNapoli never reached out to the governor’s office for a briefing before issuing his analysis, which the official said was “full of errors and omissions.” The official acknowledged that the administration never reached out to DiNapoli either, but said it would be difficult if unprecedented given the amount of legislation that could technically involve the comptroller’s office.

The administration is near to finalizing a new term sheet for an amended contract with PSEG that will specifically outline the New Jersey company’s larger role. That document will be submitted to the U.S. Internal Revenue Service for review so that LIPA’s tax-exempt status can be maintained, the official said.

“Our lawyers believe the IRS will approve  based on their expertise,” the official said. “If they don’t, the original operating service agreement applies.”

The administration has said that under the legislation, LIPA and its board would approve the utility’s budget, and that a new office of the Department of Public Service “cannot set rates” because it would violate existing LIPA bond covenants.

The only way around it would have been to privatize LIPA, a path state lawmakers objected to, the official said. “They can’t have it both ways,” he said.

Administration officials also defended the notion of removing comptroller pre-approval of LIPA contracts, saying that maintaining it would have created red tape that would have hobbled the new utility. They noted that the comptroller continues to have the authority to audit LIPA. “The only thing the comptroller is doing is maintaining the status quo and being a Monday morning quarterback,” the official said.

The officials noted that LIPA’s obligation to competitively bid contracts over $1 million, including sole source contracts, remains intact under the proposed legislation, as it does for all other state entities.

They said they believe they will have the support of the state Senate and Assembly by the end of the current legislative session.

“I believe there is going to be support at the end of day,” one administration official said. “If not, then everybody on Long Island will know that the Senate and the Assembly support the status quo. The blame will be squarely on them.”

The first of two public meetings on Cuomo’s plan to overhaul the Long Island electric utility convenes at SUNY Old Westbury Wednesday night.

The meetings will include presentations by Cuomo’s senior staff, the Moreland Commission — empaneled to review utilities’ performance after superstorm Sandy — and new system operator PSEG of New Jersey. Those interested in attending can send an email to: RSVP.LI@exec.ny.gov. The governor’s office has requested attendees to RSVP in advance, but those who have not will be allowed to attend and comment.

Ratepayers will have an opportunity to ask questions at the Nassau meeting, which starts at 6:30 p.m. in the Multipurpose Room of SUNY Old Westbury’s Student Union, 223 Store Hill Rd. The Suffolk meeting is at 6:30 p.m. Thursday at the Western Suffolk BOCES Conference Center, 31 Lee Ave., Wheatley Heights.

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Politics of Power: Session Countdown on Long Islands Energy Future


“There’s been this insistence [on] refus[ing] to make LIPA a real utility, and the latest version just perpetuates that. LIPA employs an outside, for-profit contractor to carry out most of its operations, and has since day 1. This is totally different than the structure that 2,000 other utilities throughout the country follow. They function as full-service municipal utilities responsible for operations. LIPA has been through three iterations, trying to improve it and deal with the problems. This latest, fourth iteration the governor has proposed is not an outright privatization. It’s a camouflage privatization to try to retain some form of LIPA to have tax-exempt financing and some of the benefits of public power. I don’t think that will work very well. Having gone through this and dealt with the IRS on privatizations for municipal utilities, the IRS just won’t buy the fact that a private entity can benefit from tax-exempt financing.”
—Matthew Cordaro, LIPA trustee

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Proposed Cuomo Bill on LIPA Will Increase Electric Rates


The proposed Cuomo bill on LIPA will without question increase electric rates and no absolute rate freeze is possible for any length of time. In fact if the IRS does not approve the proposed structure, rates could increase astronomically.
Many of the benefits offered in the bill could be applied to LIPA as it now exists while pursuing a transition to PSEG as its major contractor by January, 2014. There is no emergency since progress is being made in the transition and no urgency in expanding PSEG’s scope exists.
For this reason the Governor’s bill should not be rushed through the State Legislature in the last few weeks of the session. The monumental financial impact of the proposal on Long Island is too great not to take a deep breath and step back to fully review all of its implications, as well as alternative courses of action.
Acting in haste in an artificially created atmosphere of impending doom, would be a serious mistake and produce something more flawed than the original LIPA concept. There is more than enough time to examine the full consequences of the Governor’s proposal in the next session of the Legislature. The decisions to be made are just too critical not to make every effort to get it right.
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LIPA Ratepayers Deserve A Full Review Of All Alternatives – And That Review Should Be Conducted In Full Public View


 

The LIA is calling on the governor to let the SERVCO model continue and also – in deference to the governor – continue to fully evaluate the potential for privatization.  Regrettably, the LIA does not call on the governor to fully evaluate all options, including moving LIPA to a fully municipal operation, and this can be attributed to a collective mindset that it is predisposed to the assumption that a municipal utility would not be as “efficient” as an investor owned utility.

There is a general misunderstanding of utility operations, over simplified in the minds of many, and this is especially true in context to the negative attributes of deregulation (especially the additional layers of cost that flow to ratepayers by having utility leadership with one foot in the regulated and one foot in the unregulated marketplace).

The “cost”  of the governor’s push to privatize, and the LIA’s predisposed conclusion relating to municipal utilities, will weigh heavily on the entire Long Island Community, and the business community members currently coalesced into the body and leadership of the Long Island Association will not be spared that burden.

It would seem that some of the LIA’s recommended adjustments could lead to more efficient operation of the LIPA system, especially during storm response, but LIPA ratepayers deserve a full review of all alternatives  – and that review should be conducted in full public view.

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