October 3, 2012
DiNapoli: LIPA Customers Pay More For Less
Reform Efforts Should Put Ratepayers First
Long Island Power Authority (LIPA) ratepayers paid an average of $463 more per year for electricity in 2011 than they did in 2001, according to a report released today by State Comptroller Thomas P. DiNapoli. The report is the latest in a series by DiNapoli on public authorities.
“LIPA was established to control electricity costs on Long Island, but residents’ bills have consistently outpaced those of other utilities in New York State, the Northeast and the United States,” DiNapoli said. “A review of LIPA's rate growth, high-paid executives and heavy debt load demonstrate a change is needed. Current efforts underway to improve results for LIPA's ratepayers, such as the Public Service Commission’s review and oversight, are much needed and long overdue.”
DiNapoli’s review found that storm costs have surpassed the budgeted amounts in each of the past ten years. From 2001 to 2009, LIPA’s annual storm costs were an average of 80 percent over budget. In 2011, such costs were an estimated 385 percent over budget.
Nearly half of LIPA’s staff – including 10 vice presidents and 32 directors – earn $100,000 a year or more.
LIPA was established in 1986 by the state Legislature to control electricity costs within the Long Island Lighting Company’s (LILCO) service area. LIPA supplies electricity to 1.1 million customers on Long Island and the Far Rockaways in Queens.
For the fiscal year ended Dec. 31, 2011, LIPA reported:
Efforts to improve LIPA’s performance continue. Specific reform initiatives include recommendations that may result from the investigation by the State Inspector General and new audits by the Public Service Commission, as well as rigorous contract management by LIPA to ensure PSEG Long Island's compliance with all its requirements, as called for by the Comptroller. These measures should serve to increase the accountability, transparency, and efficiency of LIPA for ratepayers in the future.
The Public Authorities Accountability Act of 2005 and the Public Authorities Reform Act of 2009 created new reporting, disclosure and accountability requirements but public authorities continue to operate with a tremendous amount of autonomy. DiNapoli’s review of LIPA in the Public Authorities by the Numbers series is part of his office’s continued efforts to strengthen government oversight and improve public access to information on public authorities.
For a copy of the report, visit: http://osc.state.ny.us/reports/pubauth/lipa_by_the_numbers_10_2012.pdf