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State Panel Recommends More Utility Oversight, LIPA Overhaul

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Governor Andrew Cuomo is proposing sweeping changes when it comes to utility companies and their response to major disasters.

A Moreland commission set up by Cuomo to look into how companies dealt with the aftermath of Hurricane Sandy reported its findings Monday, saying the state needs to be more active in their regulation of the utilities.

Additionally, the commission recommends the Long Island Power Authority, which handles power for parts of the Rockaways and Long Island, needs to be restructured and possibly even privatized.

The privatization or a state takeover of LIPA would need to be done legislatively.

"This is, right now, an impossible relationship for the state, for anyone, for the consumer. The utilities basically have franchises for life," Cuomo said.

"LIPA is a mess and desperately needs to be cleaned up. The Moreland Commission's preliminary recommendations are the first important steps in reforming LIPA," said Nassau County District Attorney Kathleen Rice.

The Moreland commission favors privatizing LIPA, a process that could be complicated by the utility's sizable debt. Commission members said that debt could be restructured.

The commission also recommends that the state bulk up its Public Service Commission, which regulates the utilities. That could include hiring up to 2,000 new state workers.

"Basically recommending putting the PSC on steroids, when you do that, and you have a regulator that's more active, you are going to get better performance from those they regulate," said Moreland commission co-chair Ben Lawsky.

The Moreland commission says the PSC should have better oversight, reviewing utility disaster plans, increasing penalties for utilities when mistakes are made and wielding the power to revoke franchises.

More than 2.1 million people lost power in New York State due to Hurricane Sandy, and LIPA had one of the worst performances when it came to getting people restored.

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