LIPA: Symbol of government failure – By George J. Marlin

The following appears in the December 7-13, 2012 issue of the Long Island Business News:

In the aftermath of Hurricane Sandy, New Yorkers learned a lot about the nature of their fellow citizens and of their governments.

As for people, the crisis brought out the best in them. Tens of thousands of volunteers traveled to ravaged areas to help feed, clothe and comfort the victims of the storm. These unsung heroes were not looking for awards or overtime pay; they were simply living by the golden rule, “Love thy neighbor as thyself.”

As for federal and state government agencies, they, by and large, failed. Sometimes they appeared to get in the way of progress. The sign posted on a local Federal Emergency Management Agency office door the day after the Nov. 7 nor’easter, “Closed Due to Weather Conditions,” says it all.

The poster child of failed government for residents of Nassau and Suffolk counties, who spent days and weeks without electricity (my power was out for 14 days, two hours and 30 minutes) is the Long Island Power Authority, a New York state public benefit corporation.

LIPA was created by the state in 1986 so Gov. Mario Cuomo could pursue his ill-conceived plan to stop the LILCO-owned Shoreham nuclear plant from ever opening.

In 1998, Gov. George Pataki used LIPA – despite a campaign pledge to the contrary – to acquire LILCO with $7 billion of tax-exempt debt. Having served on the LIPA transition team in 1994-95, I know that LIPA was intended to be a holding company with 25 staffers to oversee the financing and National Grid’s operation of the electric system going forward.

Instead, under the ego-driven leadership of the former, longtime CEO, LIPA ballooned to over 100 staffers, ravenously consumed tens of millions of dollars on ad campaigns for a monopoly public-sector utility, morphed into activities inappropriate for a public utility and became another unresponsive level of government.

LIPA was in the past chastised by the state comptroller and elected officials of both parties for its misdeeds and skated close to the ethical edge. LIPA improperly authorized spending of public monies for polling regarding elected officials, awarded no-bid contracts worth tens of millions of dollars and was well-known for hiring the sons and daughters of the politically connected and members of the political class seeking high-paying employment. In short, LIPA became a refuge for hacks of both parties.

Most critically, LIPA’s performance in communicating with its customers and restoring service after Hurricane Irene last year was profoundly deficient. That’s not my opinion; that’s what Gov. Andrew Cuomo said at the time. Not surprisingly, LIPA’s customer satisfaction ratings are the lowest in the United States.

LIPA’s dismal response after Hurricane Sandy revealed that the agency learned nothing from last year’s disaster. In fact, LIPA failed to implement common sense recommendations intended to prevent blackouts, such as trimming tree limbs, replacing damaged electrical poles and updating ground workers technology equipment and customer communication systems.

LIPA’s fundamental problem has been the absence of competent leadership. And the state doesn’t need to spend money on investigative commissions and panels to confirm that.

The governor must first fill LIPA board spots he has left vacant for too long and replace holdovers with smart public-spirited members, not stone-deaf hacks. Then he must order the reorganized board to find a utilities expert to fill the CEO job, which has been vacant for over two years. This will mean offering a competitive salary. No well-paid potential CEO is going to leave a smooth-running power agency to take over the LIPA mess for $200,000 a year.

LIPA staff and overhead must be significantly shrunk. LIPA’s wasteful advertising campaigns must be halted and the “LIPA brand” must be phased out. LIPA’s expensive environmental “investments” should be pursued by the New York State Energy and Research Development Authority, a state agency with relevant experience.

The state created the LIPA monster and now it is time for Albany officials to focus on downsizing and reforming it. Long-suffering and overburdened customers deserve no less.

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