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LIPA budget for 2013 holds rates steady


From the January 4, 2013 issue of Public Power Daily

Originally published January 4, 2013

By Jeannine Anderson
Editor
The Long Island Power Authority in New York has released an operating and capital budget for 2013-2014 that includes no rate increase. 

The 2013 operating budget, released in December, totals $3.6 billion and includes targeted excess revenue over expenses of $75 million. "At a time when Long Islanders are still recovering from the impacts of Hurricane Sandy, the nor’easter that followed, and an uncertain economy, it is helpful to be able to deliver a budget that holds the line on rates for customers," the utility said.

"Despite the extreme weather damages incurred during Sandy and the nor’easter, we have been able to restrict the overall growth of our operating and capital budgets without risking either service reliability or the availability of an adequate and reliable energy supply," LIPA Chief Operating Officer Michael D. Hervey said Dec. 17.

The impact of Hurricane Sandy is not currently reflected in the budget, LIPA said. Once the net cost of the storm is determined after Federal Emergency Management Agency reimbursement, LIPA will recommend the appropriate recovery of unreimbursed costs, the Long Island utility said.

Michael J. Taunton, who succeeded Hervey as chief operating officer on Jan. 1, said his first priorities are "to stabilize the organization during this pivotal time; deliver our customers the safe and reliable service they deserve and need; do the work needed to assure our investors that LIPA is a sound investment; and lead and motivate our dedicated staff."

"We will stay committed to these priorities while continuing the LIPA transition project to a new service provider in 2014," Taunton said.

Hervey, who announced in November that he would resign at the end of the year, had been LIPA's acting chief executive. 

LIPA has faced criticism for its response to Sandy, which caused heavy floods in coastal areas of New York and New Jersey, and knocked out power to 8.5 million people on the East Coast when it made landfall on Oct. 29. New York Gov. Andrew Cuomo established a commission to investigate how LIPA and other utilities prepared for and handled Hurricane Sandy and other major storms that have hit the region over the last two years. (See Public Power Daily, Nov. 14, 2012.)

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