LIPA crews during Superstorm Sandy
LIPA crews during Superstorm Sandy

A bill reducing the role of the Long Island Power Authority and turning over much of the utility’s operations to a private contractor was signed into law Monday by Gov. Andrew Cuomo.

The law restructures LIPA so that New Jersey-based PSEG, the agency’s incoming contractor, will have greater control over operations when it takes over in January, freezes rates for the next two years and increases oversight.

“LIPA has offered lackluster service for too long and after its failure to perform during Superstorm Sandy it was clear we needed a change,” Cuomo said following a bill ceremony in Uniondale. “The legislation that was signed into law today ends the LIPA as we know it, and creates a new utility system that puts Long Island ratepayers first.”

The new law came after a Moreland Commission probe of New York State utilities recently referred allegations of possible financial crimes at LIPA to federal prosecutors.

The law reduces LIPA to a holding company, cuts its board from 14 members to nine and maintains its eligibility for FEMA and tax benefits by keeping it under public ownership. PSEG will eventually take over the utility’s day-to-day operations, budgeting, maintenance and storm response.

The law also allows LIPA to refinance up to half of its $6.7 billion debt, which makes up nearly 10 percent of bills to their 1.1 million homes and businesses.


Nassau County Executive Ed Mangano said Suffolk County Executive Steve Bellone back backed the restructuring.

Dave Daley, the vice president of PSEG who’s leading the LIPA transition, said: “We look forward to the opportunity.”


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Timothy Bolger is the Managing Editor for the Long Island Press who’s been working to uncover unreported stories since shortly after it launched in 2003. When he’s not editing, getting hassled by The Man or fielding cold calls to the newsroom, he covers crime, general interest and political news in addition to reporting longer, sometimes investigative features. He won’t be happy until everyone is as pissed off as he is about how screwed up Lawn Guyland is.