Newsday: LIPA challenges $5.5M for hurricane

Charles J. Fuschillo Jr.

April 14, 2011

By Mark Harrington 

As a state senator vowed to look into claims of limousine expenses and bonuses stemming from the Long Island Power Authority's response to Hurricane Earl last year, LIPA said it is challenging $5.5 million of the storm's estimated $34 million tab.  

LIPA last summer, in an usual move, brought in 1,600 outside crews in advance of Hurricane Earl, which largely missed Long Island and caused no outages. LIPA trustees have already conducted an investigation of the response, and found that LIPA could have waited a day before hiring the outside crews. 

But at a Senate hearing on LIPA's finances last week, state senators were told that a Freedom of Information request filed by an unnamed media outlet of LIPA's storm charges revealed $160,000 in limousine charges, as well as bonuses for workers and managers, among other things. 

That testimony came from Matthew Cordaro, a former Long Island Lighting Co. executive who is co-chairman of the Suffolk Legislature's LIPA oversight committee. It was not reported whether the charges were incurred by outside contractors or National Grid employees. 

Sen. Charles Fuschillo (R-Merrick) told the hearing his office would investigate the charges, including why bonuses were paid. "We'll look into that further," Fuschillo said. 

Separately Wednesday, Fuschillo sent a letter to Public Service Commission chairman Garry Brown, requesting the PSC's involvement in overseeing a third-party audit of LIPA finances and other practices. 

LIPA Wednesday said it had already discussed the Hurricane Earl charges with Fuschillo. 

"Because LIPA audits 100 percent of all storms, we have already identified issues that are of concern to us which we have contested such as transportation use, undocumented hours, meal expenses beyond the allowed amount, and adult drinks," LIPA spokesman Mark Gross said. "We are still in the process of internally auditing these receipts and bills to make sure that these costs which are being passed through to LIPA and our customers are fair and just." 

He added, "LIPA staff has already addressed these issues with Senator Fuschillo." 

LIPA chief operating officer Michael Hervey told the hearing last week that the authority had identified some $5.5 million in charges related to the storm that are being challenged. He did not identify them at the time. 

Fuschillo has said in addition to requesting PSC oversight of a LIPA audit short term, he will push for longer-term direct oversight by the PSC. LIPA has said PSC oversight as called for in recent Senate legislation is unneeded and could cost ratepayers millions of dollars a year.