Long Island Power Authority Under Scrutiny As Cuomo, Schneiderman Launch Investigations

NEW YORK -- New York Gov. Andrew Cuomo announced on Tuesday that he is creating a commission with subpoena powers to investigate the performance of the state's electrical utilities after Hurricane Sandy. New York Attorney General Eric Schneiderman has made a similar move, issuing subpoenas for both Con Ed and the Long Island Power Authority over their preparations for the storm, according to a report in The Wall Street Journal on Wednesday. A source familiar with the investigation confirmed the subpoenas to The Huffington Post.

The attorney general's office and the two utilities did not immediately respond to a request for comment from The Huffington Post. But both Schneiderman and Cuomo's commission will likely have much to look into, if recent revelations about just the Long Island Power Authority are any guide:

The authority's acting Chief Executive Officer Michael Hervey just announced he will resign at the year's end. The resignation could be due to the fact that LIPA has been taking such a beating from politicians for its storm response, although Hervey did not respond to a request for comment.

The troubles start at the top, with the authority's board. Many slots are open on LIPA's board because Cuomo has failed to appoint more than one new member during his time in office. What members LIPA's board does have are not experts in overseeing utility companies -- rather, they seem to be well-connected politicos. At a board meeting before Sandy struck, according to The New York Times, "discussion of the storm lasted just 39 seconds." LIPA Board Chair Howard E. Steinberg did not respond to a request for comment.

There's not much more in terms of oversight. Unlike private companies, LIPA is not subject to scrutiny by the state's Public Service Department, "which has hundreds of professional energy experts, rate reviewers and other specialists," according to Newsday. When LIPA did submit to a review of its response to Hurricane Irene, the results were damning -- but Cuomo did not follow up by pushing changes in the utility's organizational structure through the state legislature.

Those board members run an "antiquated" system that did not spend enough money on storm preparedness, according to Newsday. The utility skimped on replacing rotting utility poles, trimming trees that can fall onto power lines, and replacing pencil-and-paper outage maps with modern computer systems, Newsday reported. Despite all that, however, LIPA still charges some of the highest power rates in the country -- in part because it is saddled with debt from a shuttered nuclear power plant its predecessor once built.

LIPA's customers are victims of a failure to communicate. As HuffPost reported on Nov. 8, some customers said they could not get through to a utility representative over the phone for days. On Thursday, a Newsday reporter at the Hicksville headquarters of LIPA operations contractor National Grid observed as "a steady trickle of frustrated and angry customers stood at those doors banging on the glass -- pleading for help, demanding answers or just shouting in frustration." National grid is a private contractor that handles many of LIPA's day-to-day operations.

Although LIPA has restored power to more than 1.1 million customers who lost service because of Sandy and the Nor'easter by its count, there are still 38,000 customers who may not be able to receive power, according to a U.S. Department of Energy Situation Report. Their homes will need to be inspected for flood damage before the juice can be turned back on. For those who do have power now, restoration took more than a week in hundreds of thousands of cases.

Nobody is quite sure what to do to fix the situation. Some have suggested Cuomo start by filling out the utility's board. Privatizing the authority is still an option the governor may consider, according to The Times. On the other hand, LIPA has already contracted many operations out to National Grid, which, according to Cuomo, has not performed well in the wake of the storm. There are also ideas out there to "municipalize" LIPA, turning over all its operations to the government.