Tuesday, December 18, 2012

LIPA Turmoil

Michael Hervey, who has been the acting CEO the Long Island Power Authority since Gov. Andrew M. Cuomo took office. He is leaving at the end of the year. National Grid has operational control of the system. Until last week, LIPA's 15-member board of trustees had seven vacancies and enough internal turmoil to create uncertainty over whether it could find a quorum to perform routine business.

Cuomo still has to find a few more board members with the skills most needed now. In the past, we have said a 15-member board was too unwieldy.

The new CEO must oversee the intricacies of switching the management of the electrical system from National Grid to PSEG of  New Jersey, which won the contract to begin operating the system in 2014. As part of that process, the LIPA chief will have to determine who from Grid should stay on, what equipment and other property belongs to LIPA and who will keep track of that inventory.

Some challenges:

With no automated outage notification system likely to be in place anytime soon, how will LIPA know who has lost power in another major storm?

When LIPA establishes a timeline for restoration, who will communicate it? And how? There isn't anyone there capable of doing more than writing a simple press release.

Does LIPA know how many of the restorations made after Sandy are not permanent ones? In many cases, it will only be able to calculate what was done and who performed the work when it gets detailed bills from the out-of-state utilities. That's many months away.

LIPA is now a public authority that owns its transmission and distribution system but contracts its operation to a private utility, currently National Grid. The other options are finding an incredibly creative way to deal with LIPA's debt and sell the system to a private operator -- or devising yet another public-private hybrid that can be more effective than a public authority to provide reliable power and stable rates.  (Long Island Newsday, 12/14/2012)

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