Long Island Power Authority audits HIcksville-based KeySpan's books

Long Island Business News, Dec 13, 2002 by Ben Abelson

Long Island Power Authority executives said it might be time to start looking for alternative sources for electrical service, dumping KeySpan Corp., because of recent frustrations and past financial problems with the Hicksville-based company, according to a recent report in Newsday.

An unnamed LIPA executive was recently quoted in the publication as saying that other "good companies" could take over KeySpan's role in providing electrical system service to the authority. KeySpan earned at least 12 percent of its 2001 revenues from LIPA.

Although LIPA chairman Richard Kessel announced last week that the authority was auditing KeySpan's books, there's been no public indication that LIPA wants to sever its ties with KeySpan. KeySpan chairman Robert Catell called the suggestive comments "false allegations," and said LIPA's execs had gone "over the line."

KeySpan Nov. 5 announced that it had overstated LIPA's 2001 and 2002 revenues by about $60 million, a mistake caused by KeySpan double-counting the electricity produced by 11 new power plants. LIPA officials are currently looking into whether the error constitutes sufficient legal ground for breaking their contract with KeySpan, according to the Newsday story.