Tuesday, November 13, 2012

War of Words Shaping up Between Gov. Cuomo and Power Utilities

A war of words is shaping up between New York Governor Andrew Cuomo and the Long Island Power Authority.  As usual, civilians are often its first victims.  New York residents are shocked by the slow pace of power restoration from Hurricane Sandy and they are lashing out against Governor Cuomo.   Many residents feel that their pleas for relief have been stalled in bureaucratic limbo.  The heavily populated New York metro area is an interlocking network of separate authorities.   The situation  is complicated by a unique set of facts:

The Long Island Power Authority is not a private company.  It is a public governing board of trustees whose members are appointed by Governor Cuomo of New York and by the New York legislature.

Widely respected sports talk-show host Mike Francesca summed up popular criticism of Governor Cuomo for an ineffective response to Long Island power outages.  Politics on the Hudson captured the sentiment expressed by many fellow Long Islanders recently.  “I blame Cuomo and I blame the guys in charge of the state that allowed this system,” says Francesca.

While LIPA supplies management, administration, and direction for Long Island gas and electric utilities, National Grid supplies the energy.

LIPA executive staff have backgrounds as corporate managers, lawyers,   financial executives, and electrical engineers like Chief Operating Office Michael Hervey.

Michael Hervey was among a host of power company CEOs receiving a letter from New York Governor Andrew Cuomo threatening to revoke operating certificates and fire management personnel, according to a press release from Cuomo’s office.

The agency in charge of revoking public utility operating certificates is the New York State Public Service Commission, which regulates utilities and approves utility operations. 

As of November 11, a New York State Public Service Commission press release stated that power has been restored to 97 percent of New York homes and businesses.  The 97 percent figure excludes “36,200 customers, the majority of which cannot safely receive power yet.”

Enter the lawyers.  According to Thomson Reuters, a class action lawsuit has been filed in Nassau County today against LIPA and National Grid by Melville, NY attorney Kenneth Mollins.  The lawsuit seeks civil damages, and criminal prosecution if those charges should apply.

LIPA serves 1.1 million customers on Long Island, New York.  The bulk of customers without power as of Nov. 10 are concentrated on the southern or lower portions of Long Island, according to a LIPA map.

87 percent of LIPA’s 1.1 million customers lost power in the aftermath of Sandy, compared to approximately 25 percent of customers for Consolidated Edison, according to the Wall Street Journal.








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