LIPA, You Got Some Explaining to Do!

On Thursday the Federal Energy Regulatory Commission (FERC) issued an order denying the complaint filed by Port Jefferson Village against National Grid which alleged fraud and market manipulation by the energy company. Port Jefferson Village sought an investigation and hearing into National Grid's practices which, as alleged in the complaint, contribute to Long Island’s high energy rates.

In general terms, the FERC decision concluded that Port Jefferson Village failed to provide sufficient facts or information to support its claims. This is information that may have been uncovered had FERC agreed to investigate National Grids practices as requested by Port Jefferson Village.

The County of Suffolk, Town of Brookhaven, Town of Huntington and others had filed papers in support of Port Jefferson Village and generally Long Island ratepayers. These officials should be commended for their overt support of this action.

Despite early budgetary challenges that his administration walked into earlier this year, Suffolk County Executive Steve Bellone has demonstrated outstanding leadership, particularly with respect to local energy policy and economic development. This leadership includes the County Executive’s take-charge approach to overcoming LIPA’s post storm incompetencies last weekend as well as his August 20, 2012 letter in support of the FERC complaint on behalf of Suffolk County ratepayers wherein he stated “Economic development is vital to the businesses and residents of Long Island.  There is no question that the cost of power in Suffolk, third highest in the nation, has a negative impact of substantial proportions.” Bellone further stated “National Grid’s resistance to repowering and the degree to which that posture weighs on the market efficiency are of concern and warrant FERC’s close scrutiny.”

Unfortunately, despite overwhelming public and local government support of the Complaint, LIPA and National Grid received a victory Thursday with the federal commission’s denial of the Complaint against National Grid. By filing a motion to intervene in support of dismissal of the Complaint, LIPA demonstrated its failure to work for the benefit of ratepayers.  

LIPA needs to explain how its interests (which should inherently be one in the same with ratepayer’s interests) are advanced by ensuring high energy rates on Long Island. Perhaps the culture of cronyism at LIPA is to blame.

But let’s be clear: it is LIPA management that has failed Long Island, not the men and women who have been working tirelessly to restore power. They are owed a great deal of respect for all that they are doing in the field to restore power. Governor Cuomo as well as numerous federal, county, and town officials have also shown great leadership during the Hurricane Sandy post storm crisis. These problems, both storm related and ongoing, stem from LIPA’s management and organizational issues.

Governor Andrew Cuomo has indicated that restructuring may be in LIPA’s future. As I stated in a prior Patch blog “Bright Ideas and Bold Initiatives: Battling High Energy Rates on Long Island” it is too early to comment specifically as no plan has been proffered yet. However LIPA restructuring may be exactly what we need right now. I suspect the results of Governor Cuomo's recently launched special commission investigation into how New York utilities handled Hurricane Sandy will be considered in the preparation of a possible LIPA restructuring plan.

As a New York State public authority, LIPA’s interests should be the best interests of ratepayers. However LIPA’s defense of National Grids practices as well as its history of no-bid contracts and substandard storm response sends the message loud and clear that LIPA is not working for the benefit of the rate payers. The question is, who is LIPA working to benefit?

Jennifer J. Maertz, Esq., a Rocky Point resident, holds a B.S. degree from St. Johns University, a JD from Touro Law, and an MBA from NYIT. Jennifer is a practicing litigation attorney and a former candidate for NY State Senate in eastern Suffolk County.