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The Truth about LIPA

Sen. Martins writes about the failures of the utility company after Hurricane Sandy.

LIPA failed us miserably – from pre-storm preparations right through communicating when power would be restored after the storm. No arguments.   

Naturally, as public servants, our job is to take public authorities like LIPA to task and take a good, hard look at why it failed us after Superstorm Sandy. But I participated in this dog and pony show last year after Hurricane Irene and frankly, it accomplished very little except some convenient transfer of blame and lots of finger pointing. One positive: it’s given me a few months to better see the bigger picture and zero in on where the real problems lie. 

Of course, pick up any paper and the theories are endless: LIPA hasn’t had a permanent chief executive in 2 years; five spots on their board are still vacant; the trustees discussed the hurricane for only 39 seconds; they didn’t trim enough trees prior to the storm, their service maps are outdated; their wiring is antiquated; they never installed a monitoring system; their communication with customers stinks. All real issues that need to be addressed, but they’ve existed for years and remain unresolved.

So now heads will supposedly roll and an overhaul is in the works. It’s déjà-vu.  LIPA was created in the 1980’s by former Governor Mario Cuomo in response to the Long Island Lighting Company’s inability to handle outages after Hurricane Gloria and the aftermath of the shuttered Shoreham Plant.

Let me be the first to tell you the ugly truth: you can swap out every executive at LIPA and name it whatever you want and when the dust settles, nothing will have been achieved if we don’t address the underlying structural issues at LIPA. Of course, some cursory procedural progress is possible but the real problem is LIPA’s ailing infrastructure and more importantly, that, given our already highest in the nation utility costs, we can’t afford to fix it. The legacy costs LIPA has carried have merely kicked the can down the road – the billions borrowed still have to be paid and that has to be factored into any future LIPA reincarnation.

Central to any fix is the fact that LIPA is in debt for an incredible $7 billion dollars and has been for more than 14 years because of losses absorbed when the Shoreham Nuclear Power Plant was closed. Consequently, there is virtually no money to invest in much-needed infrastructure upgrades as much of it goes to debt service. For those following national politics, this is a perfect example of what happens when debt gets out of control. We all wish the Shoreham debacle had never happened, but we must live with its consequences, unintended as they are. For you and I, that means the aftermath of a storm that decimates an overly fragile electric system.

Any legitimate plan to address LIPA’s problems has to start with this reality or else we’re just spinning our wheels. Thankfully this past year, Governor Cuomo had already floated the idea of an “electricity superhighway” that would deliver cheaper electricity to our region. With those realized savings, LIPA could then begin investing in infrastructure improvements without disturbing its debt reduction effort.

This storm and its aftermath taught us that our electric infrastructure is overly fragile. I know we pay some of the highest electricity rates in the nation and while it would be nice to reduce those, we must invest in hardening our infrastructure against the next Sandy or Irene.

We also have to take an honest look at alternate sources that may produce cheaper energy. Long Island is already home to New York’s largest solar farm and there’s been much-debate over wind farms off our shores. As controversial as these issues are – where they’re located and what initial investment might cost – the discussions must be had and decisions have to be made.

We know what has to be done to better LIPA and the technology is already available. The question is does Long Island, and New York State, have the wherewithal to hunker down and find a way to pay for it. No matter who is given the reins at LIPA, their challenge is to convey this predicament to the public, present a feasible plan, and finally to marshal support for the solution.  Anything else is just a band-aid.

Sen. Jack Martins is the representative of New York's Seventh Senatorial District. He was elected to the State Senate in 2010 as a Republican from Mineola.

bob young November 25, 2012 at 02:31 PM
Senator Martin's with all due respect, your sound bites for the future appear hucksterish. You claim a superhighway for electricity and cheaper energy through solar and wind are the answer, seriously? What hallucinogenic drugs are you on if you believe this crappola? Solar and wind are at the extreme high end of energy cost. One utility in the west recently signed a 10 yr PPA which guarantees the developer will receive between $225 and $450 per megawatt hour. This translates into $0.225 to $0.450 per kilowatt hour, which makes LIPA's delivered cost of $0.18 per kilowatt hour appear like a black friday bargain. So solar and wind is not the answer, besides it would take a solar farm twice the size of long island to deliver all the power we need anyway, not to mention the lack of reliable constant power.
bob young November 25, 2012 at 02:31 PM
As for the fantasy of the electric super highway delivering cheaper electricity, right now LIPA retail customers pay approximately $70 per megawatt hour. Outside of hydro, the cheapest produced energy at the wholesale level one can find is approximately $35 per megawatt hour, so unless you can build this super highway at a cost of zero, and have producers sell their energy to us at cost or below, there will be no savings of any significance. BTW well less then half our electric bill is for the cost of power, as you correctly point out the bulk of our bill is for delivery charges which includes the debt service for that ugly $7 billion debt. So with all due respect, Mr Martins you haven’t the slightest clue about which you talk. BTW I did vote for you again because you are the lesser of two evils.
bob young November 25, 2012 at 03:06 PM
For once we agree. The default should have happened under Lilco. Instead the state bailed out lilco and stuck ratepayers and taxpayers with the bill in perpetuity
George November 25, 2012 at 04:05 PM
Just appoint Kaiman , he will fix lipa. ( in his own small mind off course )
Melissa Jeffrey November 25, 2012 at 06:46 PM
Thank you for illuminating the truth with regard to the Shoreh debt. It sounds as though there may be others than you that can make specific recommendations like debt default and power delivery more efficiently, I voted for you against my party loyalty because you are capable of finding the right people to stick through getting the job done completely!
Barry Loeb November 26, 2012 at 05:10 AM
LIPA: Adding outrage to outage!
Mark Gamell November 26, 2012 at 01:50 PM
Both LIPA and local government have a great deal to answer for in this matter. The LIPA failures of communication were not just a lack of niceties or customer service - they endangered lives. Elderly residents in my area did not know how long they would be without power, did not know whether to evacuate or stay or what to tell their children or relatives regarding evacuating them - the lack of information was life threatening. But the failiure of local government was just as striking. While battalions of police were deployed to safeguard gasoline lines, no one was seen knocking on the doors of elderly or infirm residents to see if they needed evacuation, food, medecines, etc. - the elderly population being the one with the least access to information from other platforms during this disaster. Sandy revealed changes of focus that are needed not just at LIPA, but within our local governments as well. I would appreciate Senator Martin's comment on that.

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