A bill that would require the election of LIPA trustees was introduced in the State Legislature yesterday by Sen. Ken LaValle and Assemblyman Fred Thiele.
The Long Island Power Authority Ratepayers Protection Act will provide transparency and accountability to the public, its sponsors say.
The current LIPA board of trustees — currently a nine-member appointed board — would be replaced by a board consisting of eight members elected by voters from eight districts having equal population. A ninth member, the board chairperson, would be appointed by the governor.
The legislation would also restore the oversight functions of the state comptroller and state attorney general over contracts, fiscal, and legal issues.
LIPA would be precluded from approving a final rate plan until a public hearing is held in each county of the service area and the Department of Public Service would have actual approval authority over rate increases, rather than only being able to make recommendations to the LIPA board.
The bill would also remove any state preemption from the establishment of municipal power companies on Long Island.
The issuance of debt by LIPA would be subject to a mandatory public referendum of residents in the LIPA service area.
“LIPA would be responsible to Long Islanders, not Albany,” the lawmakers said.
Management of the LIPA distribution system was privatized in 2013 and turned over to PSEG with the adoption of legislation pushed by Gov. Andrew Cuomo. PSEG was already in line to to replace National Grid as manager of the utility system in January 2014, under a 10-year, $3.9 billion contract with LIPA awarded in December 2011 and signed in 2012. LIPA was restructured and continues to function as a “holding company” under the LIPA Reform Act of 2013, while PSEG-LI was granted “full authority” over: the management of daily operations; budgeting, operation and maintenance of the utility system; storm preparedness and response; infrastructure improvements; and energy efficiency and renewable activities.
The 2013 legislation also froze electric rates through 2015. In January 2015 PSEG filed a proposed rate plan with the state public service commission that called for a three-year increase of almost 4 percent annually to its delivery charges, which LIPA increased only twice during its 16 years as Long Island’s utility provider. The Department of Public Service, after public hearings, scaled back PSEG’s $441 million request, recommending a lower rate hike of $325 million over three years. LIPA’s board of trustees in October voted to approve the state’s recommended three-year rate hike.
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