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WNYC investigative reporter Robert Lewis talks about efforts to restructure the Long Island Power Authority after Sandy and his reporting on who gains from privatization.
The existing LIPA structure is the only one of its kind in the United States, which has proven itself as a failure.
There are over 2000 successful Full Public municipalities' in the united states today that offer some of the cheapest rates and highest reliability against its private utility peers.
Privatization will cost the ratepayer 20% in overall rates no matter how Lazard wants to paint the picture using "Wall Street Vernacular" and this has been well studied and documented in two separate reports by highly respected energy consulting firms.
However Lazard with its wall street magic states the reports are wrong and that privatization will save money. The bottom line is that privatization does not enjoy the benefit of FEMA reimbursement which has totaled almost $1.2 Billion over the last three years alone, is beholden to the shareholder which is in an additional 10% return of investment costs and will not enjoy the benefit of cheap financing trough government borrowing and bonding. From a renewable perspective Full Public Municipalization the ratepayer may even enjoy cheaper hydro power such is the case with Freeport, Greenport and Rockville Center.
With all this stacked against privatization it is down right baffling why Lazard and the Governor believe this is the way to go.....or is it?
Joel from Nyack - American municipalities, in growing numbers, mistakenly think it's a great idea to hand provision over to private entities--and they always wind up paying more. This has been proven the world over. Want to see what happens when a small town relinquishes control of a precious resource like water? Watch and learn: http://www.flowthefilm.com/
This is what will happen should we begin to give away millions of gallons of NYS water to those who want to frack methane gas upstate; they'll pay a one-time, small permitting fee, and you'll pay ever more by the gallon!
mike k is exactly right about shoreham. they ran a " low power test" to intentionally irradiate the plant. the did it to make the cost of decommisioning to high to ever consider closing it. blackmail. well, we did close it and we are still paying. they should have never been allowed to test it in the first place, it was already in the wind it was going to close. criminals. as far as freeport, its not a valid example. freeport, rockville centre, and greenport all get cheaper hydro power from canada, they generate no power of their own, except in emergencies. Lipa is a joke, a bunch of political hacks overseeing a vast enterprise they no know nothing about, or really even care to. the first head of Lipa was richard kessle, a professional blowhard who never created or did anything worthwhile in his life. it was down hill from there. if the state couldnt oversee their own creation, can you trust them to oversee a private power company? NY govt is a joke.
Brian Said the Shoreham plant never went online. That's half-true. While the generators never spun-up LILCO did start-up and run the reactor for a few hours solely to make it radioactive in order to put New York State on the hook for decommissioning costs.
From wikipedia "On February 28, 1989, Cuomo and LILCO announced a plan to decommission the plant, which involved the state taking over the plant and then attaching a 3 percent surcharge to Long Island electric bills for 30 years to pay off the $6 billion price tag."
I want it to be in public hands. I agree with Andrew Cuomo on many things, but he doesn't know much about power authorities. Throughout the world they have been best handled when public. Just look at Canada, especially Ontario and Quebec. Since privatisation all that has happened there is that rates have increased with no improvement in service. Their entire infrastructures - which are vastly superior to those in the US let alone along Island - were built when it was public. The same is true in the UK. The problem with LIPA is not that it is public, it is that it is very, very poorly run. Privatised it will likely be as poorly run, but with a higher profit motive. So rates are going to increase (they are already the second highest in the country) and neither infrastructure (jerry rigged) nor service will improve. The best solution, by far, is to improve how LIPA is run and make Shoreham an active and functional nuclear plant.
Here in Nyack, NY we have our own water company and pay much less for our water than the rest of Rockland County which buys it's water from United Water, a French owned company.
Hi Brian -- Did you not know that Freeport has its own village-owned power authority? They were heroes after Sandy -- Freeport had power within days, except for people who had to be certified before having their power put back on.
Mario Cuomo also decided not to get electricity from Canada, a decision before the Shoreham debacle became apparent so hindsight is 20-20. Also if there had been a bridge, wealthy North Shore opponents made Shoreham failure inevitable.
I am as suspicious of financial types as anyone. But in fairness, Lazard expressing a desire to get the big business of underwriting bonds is not the same thing as an agreement to give them the business. Their comment is called marketing. And of course, Lazard and Bear Stearns were in the group underwriting the LIPA bonds. As you said, it was the largest municipal bond issue in history. I bet virtually every municipal bond underwriter was in that club. This is not to say that ugly things don't happen in municipal and corporate finance. Just to suggest that you may be making leaps here that the facts as described do not support (which is very unusual for you).
Public or private, LI needs a better power grid that includes renewables--both LIPA and the infrastructure are woefully out of date. The wind can blow in the wrong direction, and thousands are out of service. Demand better!
Why should anything as critical as power utilities be _private_, for _profit_?
Rather than exist to enrich a select, privileged few and be accountable to _shareholders_, shouldn't providers of such essential services exist to serve the _public good_ and be directly accountable to the _public_?
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