2:30 pm Nov. 9, 20128
In case you haven't heard, Governor Andrew Cuomo is very angry at the Long Island Power Authority, the government entity that is stumbling in its mission to transmit electricity to 1.1 million customers on Long Island and in the Rockaways.
Eleven days have passed since Hurricane Sandy made landfall, and hundreds of thousands of Long Island and Queens residents remain in the dark.
Cuomo has pinned the blame squarely on the incompetence of LIPA, an organization that, according to him, is nothing more than a "nameless, faceless, bureaucracy," one whose performance warrants "the removal of the management responsible for such colossal misjudgments."
The governor, sounding very much like an indignant outsider, has in fact hinted that he might take steps to bring about such a removal.
What he hasn't mentioned, as he's channeled the public's growing outrage toward LIPA, is that he's had the ability to do something about it all along.
LIPA is a “political subdivision of the State of New York," as its bond books describe it.
Like the M.T.A, it is an authority, a creature of the state. (Unlike the M.T.A., the governor's office notes, much of LIPA's operational work is contracted out to a third party.)
That means Cuomo could have found a replacement for former LIPA chief executive Kevin Law, who retired in 2010, much as he established his ownership of other state authorites, like the M.T.A. and the Thruway Authority, by appointing the trustees.
He could have named trustees to the LIPA's board to replace those whose terms have ended during his tenure.
He could have reorganized it after Hurricane Irene, when he also skewered its performance.
But then, if he did any of that, Cuomo would very obviously own LIPA. It certainly wouldn't have been possible for him to pull off the feat he's managed so far, which is to benefit politically by calling attention to the failings of an entity he actually bears responsibility for.
In fact, it looks a lot like Cuomo is operating by the same playbook he used with the M.T.A. and the Port Authority, two authorities that he ignored and derided, respectively, before bringing in new leadership and, eventually, embracing them.
If that's the precedent, LIPA's about due for a retooling.
As of this writing, it's unclear what Cuomo's LIPA plan will look like. But anger over LIPA's incompetence is still building, as the governor is plainly aware, and it's only a matter of time before some of that anger attaches itself to him. So expect the announcement of some sort of plan soon.
There are a number of possibilities available to Cuomo, but all of them are complicated.
One option is to fine LIPA.
But unlike ConEd, a private utility, LIPA is not regulated by the Public Service Commission (whose leadership the governor also appoints, by the way), so the governor can't ask the PSC to fine or decertify LIPA without changing their statutory relationship, according to Jackson Morris, director of strategic engagement at the Pace Energy and Climate Center.
Also, LIPA's shareholders are Long Island ratepayers, and the fine would trickle down to them in the form of higher bills.
Another option would be to strip LIPA's license.
But it's not clear what would replace it. Since LIPA is an authority whose sole purpose is to transmit electricity, stripping its license would basically mean dissolving it. It's not a privately run energy company with business elsewhere.
The governor wouldn't want to dissolve it without first determining how to auction off its assets, and most importantly, figuring out what to do with its crippling $7 billion debt, a legacy of a nuclear power plant built by LIPA's predecessor, LILCO.
Another option available to the governor, which seems to be the most likely, would be to restructure the organization, an idea the administration floated in Newsday in August.
"Under such a scenario, PSEG, the New Jersey company that won the bidding to manage LIPA's electric grid starting in 2014, would be the outward face of LIPA, while other state agencies, such as the New York State Energy Research and Development Agency and the New York Power Authority, could take on renewable energy and power purchasing decisions," the Newsday report said.
Then Cuomo would claim, as he did with the Port Authority, that a bloated, unresponsive, unpopular agency was "finally on the right track."
A spokesman for the governor declined to comment for this article.
UPDATE: At a press conference this evening, the governor was asked multiple questions about LIPA and his role in overseeing it. He didn't answer any of them directly, choosing instead to direct attention to LIPA's contractor: "LIPA is basically a holding company and National Grid is the provider of the services, the way Con Ed is the provider of the services," Cuomo said.
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