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Gaughran seeking state regulation of LIPA

Bill would hold LIPA to account

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State Sen. Jim Gaughran, a Democrat from Northport whose district includes Sea Cliff, Glen Head and Glenwood Landing, introduced legislation in the Senate on Jan. 26 to restore oversight control of the Long Island Power Authority to state Comptroller Thomas DiNapoli.

LIPA, which oversees PSEG Long Island, has been unregulated by the state since the LIPA Reform Act of 2013, which Gaughran said could be detrimental to ratepayers. LIPA is the only such authority in New York that he is aware of that is unregulated by the state.

PSEG Long Is-land’s response to Tropical Storm Isaias, which officials described as poor, is among the reasons why Gaughran believes LIPA needs to be regulated. Shortly after the storm hit last August, he, other elected officials and many residents decried PSEG Long Island’s response, citing a lack of communication between the utility and its ratepayers. Had DiNapoli been able to review LIPA’s policies, Gaughran said, he likely would have found flaws in its storm response plans and forced a change.

Gaughran said that state regulation would also protect residents from rate hikes, as LIPA currently has sole authority to set rates. Additionally, the comptroller’s office would examine LIPA’s staff structure and payroll to ensure there were no redundant positions.

Government over-sight would stop LIPA from becoming too top-heavy, preventing executives from making inordinate salaries or issuing themselves unnecessary benefits paid for by ratepayers, Gaughran said. He offered his work with the Suffolk County Water Authority as an example. The comptroller’s office found that previous board members had given themselves cars and other benefits they were not entitled to. DiNapoli issued a public report criticizing the directors’ perks, which forced change inside the water authority.

The role of the comptroller’s office is to make sure public agencies are not wasting money. Regulating LIPA would prevent that from happening, Gaughran said.

“The more and more I look at LIPA and the way they operate and being top heavy with management,” he said, “the more it seems like we really need something like this.”

State Assemblyman Michael Montesano, a Republican from Glen Head, said he, too believed the state should regulate LIPA. He said it was important, “considering the size of the budget that they operate under, and every action they take affects the ratepayer, not only in the cost, but how the utility operates.”

LIPA owns power assets across Long Island and is responsible for contracting with its operator, which is now PSEG Long Island. In doing so, Montesano said, LIPA engages in contractual negotiations that could put ratepayers at risk because there is no regulation of how much LIPA can spend. DiNapoli is good at his job, Montesano said, and he is confident that oversight would benefit Long Islanders.

“By the comptroller going in to do a full forensic audit, it [would] tell us where the nickels and dimes are and if the money is being spent efficiently,” Montesano said, “and where [we could] have cost cutting and efficiencies implemented to save the ratepayers money.”

Gaughran said he planned to introduce the legislation in the Senate as soon as possible. If the bill were to pass there, it would advance to the Assembly. Montesano said he would likely support it.

Sea Cliff Mayor Edward Lieberman said that, in theory, LIPA, as a local authority, should be able to provide greater oversight of PSEG Long Island than a state official would, so he was unsure if another level of bureaucracy is needed. If, however, regulatory control of LIPA were given to the comptroller, Lieberman said he ws confident that DiNapoli would be capable of monitoring performance. He also said he trusted Gaughran’s judgment.

Regulating LIPA is part of a larger package of utility-related legislation that Gaughran will present in the future. He would also like to give the state Public Service Commission authority to act in the event of another communications breakdown similar to the one seen between PSEG Long Island and ratepayers during Isaias.

Additionally, Gaughran said, the package includes ways to crack down on money that LIPA might be spending on lobbyists, which he said comes out of ratepayers’ pockets.