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Michael Miller

Viewpoint

By Michael Miller
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Private Power Isn’t Our Only Option

We’re all still peeved about the Long Island Power Authority’s response to the last two major storms, and its explanations. Most of us want to lash out in some way. The rails are being greased for a re-privatization of our power supply system, and this is all backwards and upside down.

We’re not starting with some noble value. There’s no goal to significantly increase renewable energy or decrease emissions more than LIPA, or to offer better reliability or accountability to customers than LIPA. It’s not clear at all how in the long run this can cost Long Islanders less than LIPA.

This started with a political idea: We must seem tough on LIPA. Everything else has been shoehorned on top of that.

Governor Andrew Cuomo’s newest plan is to reduce LIPA to a tiny holding company, mostly a shadow. This may qualify the operation for some of the lower-interest-rate borrowing and federal tax exemptions available only to not-for-profit utilities. Daily operations, maintenance, customer service and planning will be controlled by PSEG, the New Jersey-based investor-owned utility company.

The governor has suggested that this holding company role was the one originally envisioned for LIPA when it was created in 1985. Yes and no. Yes, most didn’t see LIPA itself operating the electric grid, but, no, it was more than a holding company. It was supposed to be a watchdog and an advocate for consumers. To this day, there are at least three vestigial references in the state Election Law to the election of LIPA trustees. Never happened. A lot of things never happened.

As with LIPA, it was poor response to a major storm that ruined any lingering favorable feelings toward the old Long Island Lighting Company. After Hurricane Gloria in 1985, LILCO was despised and mistrusted, both for its high rates and for its arrogance in dealing with the public. Long Islanders increasingly were intrigued by the possibility of creating an electrical utility accountable to the public and not to stockholders.

Six months after Gloria, 29 out of the 31 state legislators from Nassau and Suffolk counties, including all the state senators, were on record in favor of public power for Long Island. Yet it wasn’t until 1998 that Governor George Pataki put together the votes in the legislature for a plan to buy LILCO’s power grid. It took a form that was very unusual in the power industry and which was highly unpopular with many longtime ardent supporters of public power.

Often described as a “partial takeover,” LIPA bought LILCO’s electrical grid, but basically, LILCO remained in place to run it all. LILCO had essentially remained, while the public assumed a refinanced debt load.

LIPA has nominally supervised the power system, but has always outsourced its basic operations. This January, PGES will already replace what remains of the LILCO spin-off corporation as operator of the system. It’s hard to see why Governor Cuomo’s proposal represents some kind of big or positive change. It doubles down on what already hasn’t been working the way we want.

Most of us have never experienced public power the way it was envisioned. It works pretty well in Rockville Centre and Freeport, where true municipal departments run the power system (as of 2012, Freeport residents paid 40.29 percent less than LIPA customers per kilowatt hour). Minneapolis, Sante Fe and Boulder are three cities where a lot of people have had it with their private electric utilities, want to move ahead with a buyout, and envy our current situation with all of its options.

There are still ways to fix LIPA. Are we really going to toss away the dream?

Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: millercolumn@optimum.net