Democrats want open reviews for Long Island Power Authority's power

Long Island Business News, Sep 26, 2003 by LIBN Staff

Within two months, the Long Island Power Authority plans to decide on power purchase agreements that may be worth hundreds of millions of dollars.

Under current rules, LIPA isn't required to provide details of those contracts to the state Public Service Commission or ratepayers who will ultimately foot the bill, even though similar contracts are public in many other states. They should be available on Long Island too.

While LIPA argues that the contracts must be reviewed by the state comptroller and the attorney general, the Democrats who are leading the charge for more openness say those reviews are for legal sufficiency, not for the crucial issue of price. LIPA disputes that characterization.

Republicans in the state Senate say any new disclosure rules for LIPA should be part of a carefully analyzed reform package that applies to other public authorities as well.

While broad reform of authorities might be necessary, it shouldn't be used as a stalling tactic to avoid dealing with the LIPA disclosure issue that needs attention now.

The would-be reformers are worried that LIPA is answerable to a board of trustees controlled by appointees of Gov. George Pataki but exempt from scrutiny by the PSC, which oversees other public electric utilities.

The perception that Pataki has too much sway over LIPA was reinforced by the revelation that LIPA agreed to pay $120,000 for services from Mercury Public Affairs, a Manhattan firm run by close associates of the governor.

LIPA is required to use competitive pricing in choosing contracts of more than $15,000. It didn't need to in the case of Mercury because that contract was issued through KeySpan, LIPA's main energy provider. Mercury later withdrew from the contract.

LIPA has a much larger contract to buy power from power plants run by FPL Energy, a Florida utility. FPL has employed former Sen. Alfonse D'Amato, an influential Republican with close ties to the governor, as a lobbyist.

That means LIPA's efforts to drive a hard bargain on price could come into conflict with D'Amato's effectiveness as a lobbyist for the Florida utility. That may be OK when the resulting contract is a public document, but it's a problem when LIPA defends the details as trade secrets.

Responsible Republicans such as Senate Deputy Majority Leader Dean Skelos, R-Rockville Centre, should reconsider their opposition on LIPA reform bills. And LIPA needs to embrace a policy of openness.