Where LIPA’s Money Went

No matter how hot it got on summer’s hottest day, with all of the Island’s air conditioners at full blast, the Long Island Power Authority wanted to have more than enough electricity to deliver to its customers.

And it did just that — even if it meant spending billions of ratepayer dollars on questionable deals, Newsday has found.

LIPA agreed to a 20-year, $914 million contract for the right to buy power that it can use only in rare circumstances. In another deal, flawed planning for power the authority didn’t need cost in excess of $100 million. And more than $20 million went for a failed research project to turn natural gas into electricity.

As LIPA faces state investigations and intense criticism for its response to superstorm Sandy, it’s the authority’s failure to spend more money to protect its transmission and distribution system that might cause the death of the utility as it now exists.

Although LIPA pledged in 2006 to allocate $20 million annually over the next five years to reinforce its system, officials instead spent an average of $12.5 million, according to a 2012 state report that LIPA disputes. The same study said LIPA was not meeting industry standards for trimming trees and that it had abandoned a program to inspect and replace old utility poles.

Downed trees and poles have been cited by LIPA as a significant reason that 90 percent of its customers lost power after Sandy.

LIPA officials blamed the authority’s $7 billion debt obligation for not spending more to protect Long Island from extended post-storm outages.

“Frankly, we would like to spend more on making the whole system more resilient,” LIPA board member Neal Lewis said after Sandy. “But it’s kind of like having a second mortgage on your house and then trying to get a home-improvement loan.”

Click here to read the rest of the Newsday story.