Thomas Bjurlof, a resident of Port Jefferson, consults on energy and information technology for numerous international firms.
There are at least three glaring problems concerning the Long Island Power Authority. They are fairly obvious shortcomings apparent to most casual observers.
(1) Failure of command and control. In spite of the "dress rehearsal" provided by tropical storm Irene in 2011, LIPA failed as a utility in the wake of Sandy. Some say the main problem was communication. Those of us who were without power for two weeks or more understand that the core problem was much more fundamental. Lack of communication was one of the symptoms of failure of execution.
(2) There are no meaningful checks and balances. LIPA does not answer to a regulator or to shareholders. If anything, LIPA's board answers to its political masters.
(Many board members are indeed hardworking and independent minded, but ultimately they are appointed by the New York State Senate, the Assembly, and the Governor.)
(3) LIPA has failed to understand and effectively execute its role as the manager of two major outsourcing contracts, the management and the power supply agreements. LIPA pretends to be a utility, when its proper function should be that of contract manager.
Let's assume, for arguments sake, that the investigators and commissions who now scrutinize LIPA are able to effectively address these three glaring problems, would the problems with LIPA then be solved? I believe the answer is no.
To understand why one must pierce the veneer - LIPA is no more than a veneer, a pretend utility that provides political cover for an unworkable electric utility structure.
This structure is defined by two large outsourcing contracts that LIPA enters into and has the responsibility to manage. These contracts are the main cause of Long Island's dysfunctional electricity. Why? Because they create the wrong incentives with resultant dysfunctional customer service, lack of investment in infrastructure, and the highest price for electricity on the US mainland.
LIPA's contracts require approval by the New York State Comptroller and the Attorney General to be in effect. To date such approval seems to have been somewhat perfunctory, mainly addressing formal contracting criteria, not the overall concepts implemented by the contracts, or the monopoly and monopsony that define Long Island.
Fixing the problems of Long Island's electricity entails much more than "fixing LIPA". Proclaiming that LIPA must end, as Governor Cuomo has done, is a start. For there to be a lasting solution to Long Island's problems there must however be a recognition that these problems go far beyond the hapless one hundred membered LIPA contingent. There must be a recognition that reforming LIPA should not be the main show, but one of the components of a comprehensive solution.
Long Island does not need another politically expedient solution, band-aid, or attractive sound bite. We need major structural reform. We cannot continue to paper over the vexing problems created by the Shoreham fiasco. The industry, as it is structured today, does not work. Anything less than major structural reform would only perpetuate our problems and continue the descent.
It is time to start over. There must now be a persistent commitment to comprehensive reform.