DiNapoli seeks all LIPA docs on storm cost
Originally published: August 2, 2011 8:59 PM
Updated: August 2, 2011 9:08 PM
By MARK HARRINGTON email@example.com
State Comptroller Thomas DiNapoli marked the approaching first anniversary of Hurricane Earl by again demanding a "complete accounting and justification" for LIPA's costly response to the storm that wasn't.
In addition, according to a copy of a July 27 letter to LIPA chief Michael Hervey obtained by Newsday, DiNapoli raised questions about Long Island Power Authority's ability to properly scrutinize costs charged by contractor National Grid to storm accounts, which surpassed $34 million last September for a storm that largely missed Long Island. Newsday, citing a LIPA memo to National Grid and other documents, in May showed tens of thousands of dollars in charges billed to ratepayers for products and services that appeared unrelated to the anticipated storm.
"It is unclear that sufficient controls exist to prevent nonstorm-related costs from being included in these billings," DiNapoli wrote LIPA.
PHOTOS: Hurricane Earl | Flying into the eye of Earl | Hurricanes that have impacted LI
LIPA previously indicated it had complied with DiNapoli's document request, but the comptroller's office has twice told Newsday the documents LIPA gave were incomplete.
A spokesman for DiNapoli declined to comment.
LIPA spokeswoman Vanessa Baird-Streeter said the authority had not yet received the letter but added, "We will continue to be responsive to any requests received from the comptroller."
John Bruckner, regional president of National Grid's Long Island/LIPA unit, said the company had provided "a significant amount of documentation" to justify some of the $5.5 million in expenses LIPA asked about on Earl. The company is also applying a new, more clearly defined per-diem meal policy to last year's expenses and is crediting costs back to LIPA, along with other erroneous charges.
Utility watchdog Peter Schlussler, a member of the Suffolk Legislature's LIPA oversight committee, applauded National Grid for retroactively applying the policy to 2010 meals, but said there's much more that needs to be scrutinized, including "miles" of copper wiring that left warehouses and was left unaccounted "for a storm that didn't exist."
"It leads me to believe there's a systemic problem with controls," said Schlussler, a former manager for KeySpan, which was bought by National Grid.
LIPA last month began uploading storm-related invoices for 2010 on its website. One set of invoices for a Dec. 26-28 snowstorm showed $7 million in expenses, and around $16,000 in disputed charges, including $4,500 for work done by a contractor "outside the storm period."
National Grid operates the local electric grid for LIPA.
After reports of excessive and inappropriate charges earlier this year, LIPA asked National Grid to review all storm costs for 2010, and resubmit them to LIPA when finished. LIPA is also hiring internal audit staff to review storm charges.
DiNapoli's letter notes "a number of troubling items related to storm spending, particularly for Hurricane Earl, have already been identified and may suggest systemic problems."
They include $160,000 for luxury Mercedes transports for responders, $75,000 in "miscellaneous" hotel charges and excessive meal expenses.
Noting that LIPA has already disputed $5.4 million in Hurricane Earl costs, DiNapoli wrote LIPA, "If this same proportion of disputed costs was applied to LIPA's total estimated 2010 storm costs, nearly $31 million in billed storm costs would be under investigation."
"While it seems the authority is taking action to review and reject unsubstantiated costs, ratepayers are entitled to a full disclosure and justification of the costs associated with Hurricane Earl," DiNapoli wrote.