Long Island came face-to-face with an uncomfortable reality during Hurricane Sandy. Our utility infrastructure is outmoded and unsustainable. Beyond the political posturing and the finger-pointing, the situation remains unchanged from the days prior to Sandy to now.
Blaming the current administration of the Long Island Power Authority for its inability to respond to a storm of this magnitude amounts to nothing more than scapegoating. Newsday’s recent editorial tirades against LIPA, the politicians calling for heads to roll at the authority and the public’s roiling anger are easy and obvious. Fixing the problem is much more complicated and expensive.
In a crisis like this one, everyone becomes an expert. WFAN’s Mike Francesa suspended his coverage of sports and launched into endless harangues against LIPA, which no doubt gave the NY Jets’ hapless management a momentary reprieve. Even my 9-year-old daughter knew the words to WBLI’s parody, “LIPA Style.” Putting aside the histrionics for a moment, it’s clear that we are no closer to a solution than we were three weeks ago, or 30 years ago for that matter.
So let’s boil it down. LIPA is a management company, not a utility company like National Grid. They are responsible for purchasing power, updating technology, tracking outages, communicating with customers and generally maintaining the grid. But even these important responsibilities are ancillary functions to the main purpose behind LIPA: managing debt.
LIPA was formed from the ashes of LILCO and the abandoned Shoreham nuclear plant, an all-too-familiar story to Long Islanders. It was created as an energy management company hybrid that was dead on arrival due to the overwhelming debt that the defunct Shoreham project carried along. Any attempts to chip away at the debt through aggressive power purchase agreements or renewable technology investments amounted to rearranging deck chairs on the Titanic. Even though only about half of the outstanding $7 billion in LIPA debt can still be attributed to the albatross that was Shoreham, the total outstanding obligation hasn’t budged because borrowing without increased revenue begets more borrowing.
Still the cries for change at LIPA come from every direction. Why can’t we bury the lines? Because this isn’t Texas. We have neither the land nor the money to start digging new trenches and burying wires. Not to mention there are other things hanging from those poles (ahem, Cablevision), which further complicates the impossible. Why didn’t they upgrade the system like other places? Because it costs money to replace poles and wires that can withstand downed trees and high winds, and money equals rate increases.
Gov. Andrew Cuomo should be lauded on the one hand for his swift and tireless efforts in the wake of the storm. On the other hand, it must be said that his initial criticisms of LIPA sound somewhat hollow. For 22 months, the standard answer to questions regarding the vacant leadership post at LIPA and the vacant board seats has been: “We’re waiting to hear from the second floor.”
This is government-speak for “It’s up to the governor.” LIPA wasn’t even authorized to fund vacancies in the communications department. So for the governor to criticize LIPA for its lack of leadership and communication during the crisis is disingenuous at best. This doesn’t alter the fact that LIPA would have failed miserably during Sandy if Nikola Tesla was the CEO of LIPA and Roger Ailes was the communications director.
LIPA is broken because Long Island is broke.
As a result, Michael Hervey has tendered his resignation from LIPA. He’s the fall guy and I get it. But this is not something to cheer. Hervey has three things going for him that all other leaders before him did not: experience, the admiration of his team and an engineering degree. I’m not saying he should remain as head of the authority, but losing him is a setback.
Please don’t mistake me for a LIPA apologist. There is no question LIPA was overwhelmed by the storm and therefore ineffective in its response. Furthermore, its communication with the public was awful. Better communication would have eased tensions in the same way a sign on the Long Island Expressway that tells you how long it will take you to get to the Midtown Tunnel does; it doesn’t make the trip faster, it just manages your expectations in the hopes of reducing road rage. You can bet that if Richie Kessel was still at the helm that everyone would have know what was going on, even if he had to knock on every door. Whether anything else would have been different is anyone’s guess.
With that said, there is a simple and extraordinarily unpopular answer to what ails us: We have no choice but to pay down LIPA’s debt.
We can talk about wind farms and solar arrays on top of parking lots until we’re blue in the face, but nothing will mitigate our financial mess until this debt is eradicated. Either we pay now, or our kids pay later. (Assuming they’re still here.) Any talk of funds to upgrade the system or of nationwide executive searches is meaningless unless and until we get serious about putting Shoreham behind us once and for all.
Any plan moving forward must seek to sunset LIPA altogether by combining federal money and local rate increases to aggressively pay down a significant portion of the debt and sell Long Island’s power infrastructure and remaining debt to a public utility. Anything less is just shouting at the rain.