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Good-Bye LIPA, Hello Who?

The instant we regained power and phone service after Hurricane Sandy, I ordered a generator. Not some cheap contraption from a big-box store, but a showpiece of elegant engineering, with enough juice to run most of my house, and an inverter that makes the current so clean I can plug in sensitive electronics (i.e. computers).

Yes, I’m guilty of closing the barn door after the horse escaped, but from what I’ve seen, I still will have plenty of opportunities to use the generator. After all, I’m a LIPA customer.

The day my wife and I moved into our house, power was out in the neighborhood. We should have taken the hint and bought a generator that day. Of course, I should have done so after any of the countless times in the 20-odd years since that we’ve been hit with neighborhood blackouts.

Don’t get me wrong, mention of our utility company doesn’t raise my blood pressure and compel me to grit my teeth. I got over that decades ago. LIPA, including its predecessor, the Long Island Lighting Company, has been a floundering, poorly managed corporate jackass since at least the Johnson Administration (Lyndon, not Andrew). Now, our political leaders are looking to dismantle LIPA as we know it, and replace it with…well, nobody is quite sure yet. But we are assured that this new utility will give us:

·More dependable service

·Better response in emergencies

·Rates no higher than they are today

So far, both of the big ideas that been floated have serious downsides. Gov. Andrew Cuomo’s initial push for a private utility hasn’t been warmly received here in Nassau. A private firm might be better managed and more efficient, but it wouldn’t be entitled to FEMA funds like state-owned LIPA is. Also, it’s hard to envision flat electricity bills after this private company paid its stockholders a reasonable return on their investment, as well as paid a higher interest rate than the government does for its debt.

And debt, LIPA has a mountain—some $7 billion, along with whatever the private company would pay for this miasma of megawatts. In all, it’s pretty certain that our bills from a private utility wouldn’t be lower.

As it stands now, LIPA’s debt burden is so enormous that it will take what Cuomo calls “creative financing” to make it manageable for privatizing. Though Cuomo’s plan hasn’t been spelled out, something tells me that this “creativity” will cost us ratepayer/taxpayers. Whether that cost comes in the form of tax breaks for the buyer, or the state underwriting the debt, or Nassau and Suffolk being hit with a special “surcharge” (never say “tax”), we will pay.

Would the state eat the debt? New York taxpayers outside of our island would never stand for that. Would the feds ride to the rescue? With Chuck Schumer’s high standing with the Obama Administration, it’s not impossible, though hard to imagine.

A “municipal utility” is the other idea. Basically, it’s a lipstick-on-a-pig approach that calls for an entity that’s a warmed-over LIPA. Instead of bossing around its service-providing contractor, National Grid, this taxpayer-owned utility would deliver the service itself. How to staff up? Well, it would be politically unwise to do anything other than hire National Grid’s suddenly unemployed 2,000 workers.

The idea that politicians would be the utility’s masters is scary. Especially scary that these would be Long Island politicians, who are matched only by LIPA in their ability to generate debt and mismanagement.

Maybe this new utility will provide service that’s more dependable. And maybe it will respond better in emergencies (tough to do worse). But will it give us electric rates no higher than they are today? That is impossible. It might not show up directly in our monthly bills, but we Nassau residents will pay.

Until it’s all sorted out, I’m not expecting much to change. Unfortunately, I expect to get a lot of use out of my new generator.