(NEW YORK) MintPress – In just two years, New Yorkers have witnessed the destructive force of three powerful storms that have crippled the state: Irene, Lee and most recently Hurricane Sandy, which knocked out power for more than 2 million customers in New York City, Long Island and the lower Hudson Valley.
And in far too many cases, New York’s utilities had major problems turning the lights back on.
On Wednesday, Gov. Andrew Cuomo, during his annual State of the State address, outlined a series of proposals designed to fortify and upgrade all of the systems that are capable of crippling communities when they fail during an emergency.
The proposals draw largely from the work of four commissions that Cuomo announced in November: NYS Respond, NYS Ready, NYS 2100 and the Moreland Commission on Utility Storm Preparation and Response.
“As we adjust to the reality of more frequent major weather incidents, we must study and learn from these past experiences to prepare for the future,” he said.
Cuomo created the 10-member commission under the authority of the state’s Moreland Act, which gives the governor sweeping powers to create investigative committees with subpoena powers.
The panel is led by former state Attorney General Robert Adams and Benjamin Lawsky, Cuomo’s superintendent of financial services.
A total of seven power utilities were served with papers, according to the commission’s preliminary report, which was delivered to the governor on Monday, and 40 requests for information were sent out.
Strengthening controls
Based on the Moreland Commission’s recommendations, Cuomo proposed giving the Public Service Commission (PSC), which regulates power providers as well as other services provided by cable and telephone companies, the regulatory and enforcement teeth it needs to improve oversight and regulation of the state’s utilities.
The commission recommended tougher penalties to be placed on those power companies with a poor performance record. Currently, the PSC can levy fines of up to $100,000 total per day for all violations by a utility.
The panel recommended fines of up to 0.02 percent of a company’s gross revenue, which would be up to $42 million a day for Con Edison and $750,000 for National Grid, according to the commission.
The panel also said the state should create an easier way to revoke a utility’s certification. They operate “in their own exclusive service areas with no risk of losing all or part of the territory because of toothless government oversight,” stated the report.
LIPA on the chopping block
On the recommendation of the panel, Cuomo also proposed privatizing the quasi-public Long Island Power Authority (LIPA).
It received particularly intense criticism after Sandy, when some customers went up to three weeks without power.
“There were so many people without power, and they did not come through with communication. They were just incompetent,” longtime Long Island resident Laura Davis, who works in sales and marketing, tells MintPress News. “They didn’t provide us with any estimation of when the electricity might come on.”
The commission said LIPA had a “fundamental dysfunctional management structure.” It recommended scrapping LIPA and going with a private company that would be accountable to the empowered Public Service Commission.
LIPA was originally created by former Gov. Mario Cuomo — the current governor’s father — to replace a private entity, the Long Island Lighting Co., which had a history of service problems, in 1985.
The commission argued that privatizing LIPA now wasn’t necessarily a return to the past. “Just because something didn’t work years ago doesn’t mean it won’t work this time,” said Regina Calcaterra, the commission’s executive director.
But some critics warn that privatization could lead to higher electricity rates, because a private company would most likely have to take on all of part of LIPA’s nearly $7 billion debt.
“Privatization is a fundamental mistake for the people of Long Island. It will increase operating costs,” said former state legislator Richard Brodsky, who studied utilities and storm preparations during his career in the state assembly.
Just because LIPA wasn’t “run well,” he added, doesn’t mean that public ownership should be terminated. “That would be a great mistake.”
Says Davis, “We are over-taxed as it is. That’s going to be a big no no on the island.”
The Moreland Commission also considered expanding LIPA and allowing it to function not only as the owner but also the day-to-day manager — currently, National Grid manages it — and replacing LIPA with the New York Power Authority, which it says has a “successful professional energy” team.
Both of those options would have put the financial burden on the state rather than its citizens.
The Moreland Commission will next turn its focus statewide, examining the response to Lee and Irene.