Nassau County, NY — Attorney Victor Yannacone, jr. on Friday will launch an explosive attack on the Long Island Power Authority’s (LIPA) and present a controversial solution to protect ratepayers, taxpayers and businesses on Long Island. On Friday morning, July 19, 2013, at a meeting titled LIPA: Alternative Ideas held by the Long Island Metro Business Action organization, Yannacone will make an aggressive case for restructuring LIPA as a ratepayer-owned not-for-profit public utility.
Yannacone said. “This will be controversial because LIPA today is overseen by political appointees whose allegiance is to the political system and not the ratepayers.”
LIPA Fails the Ratepayers
Regulated public utilities earn a fixed return on investment based on their capital assets. The more costly those assets are to build, the greater the return on investment to stockholders. So decades ago when the Long Island Lighting Company started to build the Shoreham Nuclear power plant, the utility’s stockholders were set to profit handsomely on the backs of ratepayers. Bonds issued to pay for construction were to be repaid by ratepayers and taxpayers while profits went to the private utility stockholders.
LIPA was eventually created to acquire the assets and assume the liabilities of the failing Long Island Lighting Company. However once the dust settled, LIPA only owned the transmission and distribution system but no power generation facilities. Earlier this year Governor Cuomo announced his plan to privatize LIPA and give control to New Jersey-based Public Service Electric and Gas (PSEG). The end result is that ratepayers and taxpayers would be responsible for all the debt while the income goes to PSEG.
A Better Solution: Transforming LIPA to Ratepayer Ownership
Yannacone argues that dollars earned by LIPA should stay on Long Island to improve the quality of life and promote economic growth in the region. The solution would be to reorganize LIPA into a ratepayer owned not-for-profit public utility in which ratepayers elect the Board of Trustees instead of government officials appointing them. As a not-for-profit public benefit corporation, LIPA would be accountable to its ratepayers and the people it serves rather than stockholders far removed from the service area. This approach would reduce rates and help attract economic development with competitively priced electricity.
“I look forward to presenting my findings and solutions to Long Island Metro Business Action. I hope, for the sake of Long Islanders, that they have the vision and determination to reject the short-sighted decisions of the past and embrace a brighter future that serves the ratepayers and grows the Long Island Economy!” Yannacone added.
For more information, please visit www.yannalaw.com
About Victor Yannacone, Jr.
Victor Yannacone, Jr. is an attorney, a counselor and a crisis manager capable of assisting and supervising the work of in-house legal departments and outside law firms. He will craft and coordinate a winning strategy inside and outside the courtroom and be your advocate in both the boardroom and media.
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