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LIPA Faces Angry Customers, Lawmakers as Blackouts Linger

Frustrated residents joined lawmakers in calling for a shakeup of the Long Island Power Authority as about 56,000 of its customers remain blacked out two weeks after Hurricane Sandy.

The state-owned authority’s customers accounted for about 53 percent of an estimated 106,000 still without power today, including homes and businesses with property damage unable to reconnect, according to data compiled by Bloomberg from utility websites. Sandy and a subsequent snowstorm knocked out power to 8.66 million customers in 21 states, according to the U.S. Energy Department.

“I never thought I’d live like this,” Denise Watson, 51, who was charging her mobile phone in her car outside her home in Hicksville, New York, said in a phone interview yesterday. “Do you mean to tell me that a multibillion-dollar operation such as LIPA didn’t have any preparation for this? It’s a disgrace.”

New York Governor Andrew Cuomo said Nov. 8 that LIPA’s management has failed. Cuomo, a Democrat, said he “will make every change necessary to ensure it lives up to its public responsibility,” including removing management. Hundreds of residents protested outside a utility office in Hicksville on Nov. 10.

Unprecedented Storm

“We certainly understand the frustration,” Chief Operating Officer Michael Hervey said at a press conference yesterday. The storm was unprecedented and left utilities along the East Coast calling for help from a limited number of linemen and tree-trimmers, he said.

“When we’re done we will look at any improvements we need to make,” Hervey said.

Conditions might have been worse if local officials hadn’t started directing LIPA’s personnel to turn on power to individual neighborhoods, John Venditto, town supervisor in Oyster Bay, said in an interview yesterday.

“I’ve never seen a response this poor,” said Venditto, who has lived in the Long Island community for more than six decades. Oyster Bay is considering having its municipal workers begin clearing trees on private property if LIPA doesn’t speed its response, he said.

Representative Pete King, a New York Republican, called on President Barack Obama to take the lead in restoring power on Long Island, increasing the Army Corps of Engineers’ response.

“LIPA management is clearly incapable of completing the vital task of restoring power,” King wrote in a Nov. 9 letter to the president.

Lilco Assets

Mario Cuomo, the current governor’s father, was governor of New York when LIPA was formed after Long Island Lighting Co.’s Shoreham nuclear power plant was scrapped. The authority eventually took over Lilco’s assets.

Sandy made landfall on Oct. 29, bringing 85 mile-per-hour (137 kilometer-an-hour) winds and record-setting floods to New Jersey and New York. The damage was compounded by a Nov. 7 snowstorm.

About 97 percent of New York homes and businesses that are able to get electric power have been restored, the state’s Public Service (PEG) Commission said in a statement yesterday.

The number of blackouts on Long Island include 46,500 damaged homes and businesses that can’t be reconnected without customer repairs, LIPA Chief Operating Officer Michael Hervey said today on a conference call with reporters.

Massive Damage

That number is being whittled down by door-to-door assessments and independent electricians certifying buildings are safe to have their power switched on, Hervey said.

FirstEnergy Corp. (FE)’s Jersey Central Power & Light today reported about 1,900 customers left to reconnect. It estimated this morning that another 30,000 can’t be restored because of “massive infrastructure damage” on the barrier islands and shoreline communities.

Public Service Enterprise Group Inc. said its utility, New Jersey’s largest, had 19 customers still blacked out by Sandy and 259 from the second storm, according to a statement today. A spokeswoman for Public Service couldn’t immediately say how many customers were still without power because they are unable to reconnect.

Consolidated Edison Inc. (ED), which serves New York City and nearby suburban areas, reported about 2,000 customers without power with another 16,300 customers in parts of Brooklyn, Queens and Staten Island awaiting repair to their own equipment and certification they are able to reconnect.

Restoring Power

LIPA, based in Uniondale, New York, has restored power to about 1.1 million customers, according to its website. The authority estimates 99 percent of customers who can get electricity will have it tomorrow. The rest will be reconnected, one by one, by Nov. 14, Hervey said.

National Grid Plc (NG/) operates and maintains LIPA’s power grid under a contract that expires at the end of next year. The authority last year approved a new contract under which Newark, New Jersey-based Public Service will take over operation of its Long Island grid on Jan. 1, 2014.

“We were prepared,” John Bruckner, president of National Grid’s Long Island power-line unit, said on today’s press call. “We were challenged.”

Hurting Finances

Cleaning up from the storm may hurt LIPA’s finances, Moody’s Investors Service Inc. said in a report last week. While the utility can recover costs through a rate mechanism, it may face challenges in doing so if its response to the storm attracts censure from politicians, Moody’s Vice President Laura Schumacher said in the report.

In 2006, LIPA committed to spending $20 million a year to protect its grid against storms, Newsday reported Nov. 8. The utility spent $12.5 million a year, and also cut the amount it spent to inspect transmission poles, according to the newspaper.

On Long Island, Watson said, a crew from Illinois arrived at her house yesterday to begin clearing trees. Local residents need to pressure state leaders to hold LIPA accountable, Oyster Bay’s Venditto said.

“If it means a wholesale change in the management at LIPA, so be it,” he said.

To contact the reporters on this story: Mike Lee in Dallas at mlee326@bloomberg.net; Freeman Klopott in Albany at fklopott@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net

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