Dive Summary:
- In the wake of the devastation wrought by Hurricane Sandy, the Moreland Commission, a New York state investigative panel convoked by Governor Andrew Cuomo, has recommended that the Long Island Power Authority (LIPA) be privatized due to a "fundamentally dysfunctional management structure."
- According to the commission, the root of the problem is that LIPA, which is owned by the state, does not operate its power lines, relies on consultants to determine its spending and has failed to follow the recommendations of previous state studies.
- An October 2011 study of LIPA by the Brattle Group found that privatizing LIPA could raise costs by as much as $438 million annually as private utilities cannot issue tax-exempt bonds.
From the article:
"... Cuomo, a Democrat, convened the so-called Moreland Commission in November with the power to subpoena witnesses, after more than two million homes and businesses lost electricity from the storm, some for as long as 21 days. Some of the panel’s recommendations will need legislation and Cuomo said he’s waiting for its final report. No date was given for its release.
'The key to problems at LIPA was a fundamentally dysfunctional management structure,' Benjamin Lawsky, the commission co-chairman and superintendent of the New York Department of Financial Services, said at a meeting in Albany that was broadcast on the Internet. 'The commission found that the only solution is for fundamental change at LIPA and how power is delivered on Long Island.' ..."
