Newsday: State comptroller reviewing LIPA's $30M storm prep

Originally published: September 9, 2010 4:09 PM
Updated: September 9, 2010 10:04 PM
By MARK HARRINGTON   

State Comptroller Thomas DiNapoli Thursday ordered his staff to conduct a review of the Long Island Power Authority's $30-million bill for Hurricane Earl response to determine if a full audit is needed.  

The move follows concerns by legislators over the storm prep price tag. Sen. Charles Fuschillo (R-Merrick) said he spoke to DiNapoli Thursday and requested an audit of LIPA's storm spending, which included contracting with 1,600 crews days in advance to travel to Long Island. 

"It's a concern of mine that this is going to cost over $30 million and essentially nothing was done," Fuschillo said, adding he has heard unofficial estimates of up to $40 million in costs tied to the mobilization. 

LIPA, in a report Wednesday in Newsday, called the $30-million figure "very preliminary" and would not rule out a rate increase to cover storm costs that have topped $150 million this year. LIPA expects the Federal Emergency Management Agency to cover about $54 million. 

Bill Reynolds, a spokesman for DiNapoli, confirmed he spoke with Fuschillo and said he "shared" the senator's concerns. DiNapoli has ordered staff to do "an appropriate analysis and then determine whether an audit should be conducted." 

Suffolk Legis. Wayne Horsley, chairman of the legislature's energy committee, has requested that new LIPA chief operating officer Michael Hervey appear before his committee next month to answer questions about storm spending. Horsley, in a letter sent Wednesday to Hervey, called the expenses "very disturbing." 

In a statement late Thursday, Hervey said the authority "welcomed" the comptroller's review, and has agreed to meet Horsley's committee. "The preparation LIPA engaged in, based on the forecasts provided for Hurricane Earl, were reasonable and appropriate and designed to limit the number of days of outages that customers would experience," he said. 

Horsley and others are questioning LIPA's decision to call in outside crews the Tuesday before the storm that blew past Long Island late Friday night. Most of the crews had arrived by that Thursday afternoon and stayed until Saturday in case of cleanup and repair work. 

LIPA has said it was following its procedure for dealing with storms, based on forecasts that Earl could directly strike Long Island. Former LIPA chief executive Kevin Law, though vacationing in Montauk on Aug. 31, was heavily involved in storm planning, LIPA said, and returned early from his vacation on Sept. 2, the day before the storm. He is now head of the Long Island Association, and LIPA trustees won't appoint a new chief executive until January, at least. 

Horsley said it was his understanding LIPA could have reserved crews and put some on standby, saving millions, rather than have them travel to Long Island before the storm hit. 

"We're talking about $30 million and a possible rate increase," Horsley said. "That's a decision we should question."