LIPA customers outraged over Moreland Commission report citing utility’s 'astronomical' expenses

Critics and customers of LIPA are furious over a new report by a state panel that uncovered breathtaking waste and lack of oversight at the utility.

Critics and customers of LIPA are furious over a new report by a state panel that uncovered breathtaking waste and lack of oversight at the utility. (6/24/13)

WOODBURY - Critics and customers of LIPA are furious over a new report by a state panel that uncovered breathtaking waste and lack of oversight at the utility, whose customers pay some of the highest power rates in the country.

The Moreland Commission, convened by Gov. Andrew Cuomo in the wake of Sandy, found that the power authority paid a consulting company "astronomical" rates and also covered pricey travel costs for some of its executives, while LIPA ratepayers were stuck with the tab. The commission says the problems found at LIPA were so troubling that some of them warrant further investigation by criminal prosecutors.

The commission's probe found that $28 million, or nearly half of LIPA's consulting budget, went to a Chicago-based firm called Navigant Consultant. The firm, hired to advise the utility on things like storm preparedness and structure, billed LIPA for rates as high as $500 per hour, and one person with the company was reimbursed for $4 million.

The Moreland Commission says the findings raise serious questions regarding LIPA's management of a consulting contract that passed unexplainable costs to its ratepayers. It is recommending that federal prosecutors investigate the business relationship between LIPA and Navigant.

In a statement, the utility says, "LIPA will move expeditiously to address the findings and serious concerns identified by the Moreland Commission. Steps to improve the internal control environment have already been taken." Navigant says it is cooperating with authorities.

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