Long Island’s bungling power authority may be too much of a mess to sell off.
Privatizing the beleaguered LIPA utility could cost New York taxpayers billions of dollars, according to Crain’s New York Business.
While LIPA’s size makes it an attractive target for a deep-pocketed buyer, the utility’s frightening financial turmoil makes a conventional purchase all but impossible, the report says.
The state could potentially facilitate a sale by assuming $4 billion of LIPA’s $7 billion debt, according to the report.
In addition, any sale of LIPA would cost taxpayers an extra billion bucks to pay off early-termination fees to bondholders and other pricey obligations.
Gov. Cuomo has repeatedly called for LIPA’s abolition, but critics wonder if taxpayers could stomach the cost of a privatization.
“You’re talking about the bailout of Long Island,” Matthew Cordaro, chairman of the Suffolk County Legislature’s LIPA Oversight Committee, told Crain’s.
“I can’t imagine people in the rest of the state will stand for that.”
Incredibly, LIPA’s debt burden hasn’t decreased since 1998, despite charging their ratepayers some of the highest prices in the nation.
The utility’s reputation was left in tatters after Hurricane Sandy when its response to widespread devastation was universally criticized.
Most of LIPA’s leaders were forced to resign in the storm’s aftermath, under heavy pressure from Albany.