Newsday: Pols want hearing on LIPA overcharge

Charles J. Fuschillo Jr.

February 14, 2011

By Mark Harrington

A contingent of Republican state senators led by Sen. Charles Fuschillo has called for a public hearing into reports the Long Island Power Authority overcharged customers $231 million for power LIPA says was "lost" on the system.  

"LIPA ratepayers already pay some of the highest utility bills in the country, but yet another LIPA error results in hundreds of millions of dollars unnecessarily taken from their pockets," Fuschillo (R-Merrick) said in a statement Friday. 

Fuschillo was joined in his statement by Sens. Kenneth LaValle (R-Port Jefferson), Carl Marcellino (R-Syosset) and George Maziarz (R-Newfane). 

Newsday reported Wednesday the overcharges resulted from a faulty formula for calculating power lost to system inefficiencies before it ever reaches customer meters, and that the overcharges have accumulated during the past several years. 

LIPA said the formula has been in use since the Long Island Lighting Co. owned the system in the 1990s. It noted LIPA staff identified the problem and LIPA trustees acted swiftly to determine its extent and correct it. 

But lawmakers say LIPA's measures don't go far enough and are not swift enough. They note only about half of the amount, $129 million, is being returned through three years of rate cuts, and that the remaining $102 million is being used to offset LIPA losses for 2010 owing to record storm-restoration costs. 

Fuschillo's office said the hearing will examine LIPA's handling of the overcharge, discuss a bill sponsored by LaValle calling for a Public Service Commission review of LIPA rate increases, and "further explore what measures are needed to improve LIPA's accountability to its ratepayers." 

Fuschillo said he plans to hold the meeting as soon as possible, perhaps in the next couple of weeks. "I'm just disgusted with reports that keep coming out of LIPA," he said, referring to the overcharge and $33 million LIPA paid in preparation for Hurricane Earl last summer, though the storm largely missed the Island. "It's constant. It seems that mistakes keep happening and coming at the expense of ratepayers." 

LIPA chief operating officer Michael Hervey said the authority will participate in the forum. 

"LIPA has and will continue to act in the best interest of the ratepayer and, even though we have not been asked, we welcome the opportunity to participate in the hearing and provide an accurate and comprehensive account of LIPA's actions," Hervey said in a statement. 

Fuschillo, newly named to the Senate's Energy and Telecommunications Committee, hasn't announced a time and location for the public hearing. 

Suffolk Legis. Wayne Horsley (D-Babylon) this week took issue with the way LIPA disclosed the error, noting it first publicly aired what it called the "anomaly" as the final agenda item at a Jan. 27 trustees meeting.