Major Accomplishments in Law’s First Year at the Controls for LIPA
Reforming LIPA, Commitment to Openness and Transparency, Proposing Lean
Budget, and Renewed Emphasis on Environmental Protection
Uniondale, NY—January 10, 2008— Long Island Power Authority CEO and President
Kevin S. Law is proud to announce the many accomplishments of his brief tenure
over the past year, first as Chairman and then more recently as CEO and
President, which are highlighted by significant reform, creating a blueprint for
greater transparency at the Authority and a commitment to environmental
protection in carrying out LIPA’s core mission.
The transition of leadership at LIPA in 2007 occurred against a backdrop of
fundamental change at the operational level with the proposed merger and
acquisition of KeySpan, LIPA’s private-entity partner in the transmission and
distribution of electricity, by National Grid early in 2007.
"I promised that we would hit the ground running, and we did," said Law, who
has set the tone by aggressively charging ahead with a full agenda that includes
major policy and fiscal reform, interagency cooperation at the state level and
an update of Long Island’s Energy Master Plan. "Many had suggested that LIPA was
in need of a shakeup,” said Law. “I think after the first year we’ve turned it
on its head.” Others seem to agree.
“Kevin Law has brought the same ‘shake ‘em up’ mentality we had here together
in Suffolk County into LIPA,” said Suffolk County Executive Steve Levy, for who
Law served as Chief Deputy County Executive during Levy’s first term. “From
cutting salaries and slashing perks to exploring sources of cost-efficient,
renewable energy, Kevin is committed to turning things around at LIPA for the
betterment of the ratepayer.”
“Nassau County enjoys a great partnership with LIPA under Kevin’s leadership,
specifically as it relates to our Green Levittown initiative, and more generally
through the Authority’s commitment to protecting the environment and to its
finances,” said Nassau County Executive Thomas R. Suozzi.
“Kevin Law is a breath of fresh air. His concern for the ratepayer coupled
with his progressive approach to LIPA’s future is a change that Long Islanders
both welcome and deserve,” said New York State Assemblyman Marc Alessi. “I will
continue to keep an eye on LIPA’s practices and as always, if I feel that
ratepayers are not getting a fair deal, I will be the first to speak out. But
the leadership of Kevin Law has paved the way for a new beginning and a fresh
start at LIPA, and under his direction, ratepayers have a reason to be
optimistic about the future of energy on Long Island.”
"LIPA's leadership is paving the way for the rest of the state and country,”
said Ashok Gupta, Director, Air & Energy Program for Natural Resources Defense
Council. “LIPA's energy efficiency and renewable initiatives are the best way
for Long Island to improve reliability, lower bills and reduce global warming
pollution."
"Though it's been only a short tenure for Kevin Law at the reigns at LIPA, we
have seen a great deal of positive change over the last year," said Lisa Tyson,
Director of the Long Island Progressive Coalition. "Kevin has demonstrated a
firm commitment to the environment over the years in his various professional
capacities, and the creation of LIPA's first-ever Vice President of
Environmental Affairs position was a laudable move that became even more
significant with the hiring of Michael Deering."
"Kevin Law has surpassed expectations,” said Martin Cantor, Executive
Director of the Long Island Economic and Social Policy Institute at Dowling
College. “In short order, he has gotten his arms around many of the thorny
issues confronting LIPA, while also acknowledging that any solutions must
benefit ratepayers and not harm the economy.”
Highlights from 2007 include the following:
2007 A Year of Reform at LIPA
Governor Eliot Spitzer appointed Kevin S. Law to serve as the Chair of the
Long Island Power Authority (LIPA) Board of Trustees in January, 2007 (a
part-time, unpaid post) and designated him as the next CEO and President of the
Authority at the conclusion of a 10-month transition with the outgoing President
and CEO. Mr. Law was unanimously approved by the Trustees on October 2, 2007 and
assumed his new role on October 9, 2007. Previously, Mr. Law served as Chief
Deputy Suffolk County Executive. Prior to his tenure with Suffolk County, Mr.
Law was a partner in the Environmental and Energy Practice Group at the national
law firm Nixon Peabody LLP and was the managing partner of its Long Island
office.
Governor Spitzer charged Mr. Law with creating and implementing a reform
agenda for the Authority with a goal toward making LIPA more transparent with
respect to its overall operations. The Governor also directed Mr. Law to
aggressively promote energy efficiency and conservation efforts to complement
his own ambitious 15 X 15 energy initiative and to expand the Authority’s
renewable energy portfolio.
Following is the record of accomplishments achieved by LIPA under Law’s
leadership in the key areas of Ethics and Reform, Budget and Management,
Environmental Protection and Energy Planning.
A. Ethics and Reform
- Drafted and implemented a Code of Conduct and Ethics for all LIPA
employees;
- Created compliance officer position in the 2008 operating budget for the
first time at LIPA to make sure the Authority complies with all rules,
regulations, laws, etc.;
- Eliminated bonuses for LIPA employees which had ranged from $1,000 to
$55,000 per employee per year;
- Refused to renew expensive contracts for lobbyists and brought
government relations position in house at lower costs;
- Requested PSC Review of LIPA ratemaking policies even though LIPA is not
subject to PSC jurisdiction, and is now working on legislation to authorize
such review;
- Sought formal opinion from the Attorney General concerning LIPA’s former
practice of charitable giving and community sponsorships. The AG determined
that the practice of charitable giving of ratepayer funds was not
permissible and that community sponsorships with no nexus to the core
mission of the Authority should be ended;
- Issued an RFP to competitively bid out the Energy Management Agreements
currently held by KeySpan/National Grid;
- Requested New York State Attorney General to represent the Authority in
litigation matters to reduce outside legal expenses;
- Demanded the release of cost estimates for a proposed 40 wind turbine
wind farm in the waters off Jones Beach which had never before been publicly
released by the Authority. Law subsequently shelved the project in light of
projected costs which had escalated to more than $800 million;
- Developed and implemented new controls for the oversight of LIPA’s
Research and Development programs in light of poorly-managed Plug Power fuel
cell debacle;
- Encouraged and enhanced public participation at LIPA Trustee meetings
which are now broadcast over the Internet through webcasts available on
LIPA’s website for 30 days after they are held.
B. Budget and Management
- With more than 95% of LIPA’s nearly $4 billion operating budget
comprised of fixed costs, Law slashed more than $8 million in discretionary
portion of budget which helped keep a modest 2% rate increase below the
change in the Consumer Price Index;
- Reached agreement with State Attorney General Andrew Cuomo to represent
LIPA, a state authority, in certain legal matters in the future for savings
in outside legal costs for 2008;
- Cut $3 million in outside consulting fees;
- Proposed an end to incentive or “bonus” compensation for LIPA employees;
- Abolished three upper management positions;
- Eliminated outside lobbying firms formerly retained by LIPA;
- Eliminated charitable contributions made by LIPA;
- Reduced sponsorships, advertising, travel and conferences;
- Hired new employees at lesser salaries than their predecessors’;
- Sliced other expenses deemed not central to LIPA’s core mission;
- Negotiated new Management Services Agreement (MSA) with KeySpan, then
revisited terms of MSA after announced merger between KeySpan and National
Grid to extract additional benefits and commitments from its new partners in
the areas of performance measures/reliability, environmentally-friendly
initiatives and synergy savings for ratepayers to be realized over time. The
combined economic benefits have been valued at approximately $236 million.
C. Environmental Protection
- Delayed vote on Management Services Agreement of National Grid and
KeySpan until KeySpan fully demonstrated its program for remediation of
Manufactured Gas Plant (MGP) sites;
- Introduced initiative encouraging local schools and governments to
switch to energy-efficient compact fluorescent bulbs (CFLs) by offering them
at below wholesale cost. All Long Island municipalities and school districts
benefited immediately as LIPA underwrites the purchase, so final prices paid
will be well below wholesale cost;
- Dedicated the installation of Long Island’s 1,000th solar roof. LIPA’s
Solar Pioneer program has rebated over $26 million for solar panels,
representing an increasing awareness locally of customers’ ability to
control their own energy futures;
- Issued RFPs to expand LIPA’s portfolio of renewable energy.
- Named 2007 Excellence in ENERGY STAR Promotion Award winner by the U.S.
Environmental Protection Agency and Department of Energy for outstanding
contributions to reducing greenhouse gas emissions by promoting
energy-efficient products, services and/or homes;
- Environmental highlights of 2008 operating budget include:
- 11% increase in funding for LIPA Energy Efficient Programs
- 34% increase in funding for Photovoltaic Program
- 22% increase in funding to Low-income Conservation Program
- Creation of new Vice President of Environmental Affairs position
- $2.6 million in “Green Premium” related to LIPA’s implementation of
the Renewable Portfolio Standards Program
- Gearing up to launch one of the most ambitious energy efficiency
campaign for any public utility in the country which will emphasize peak
demand reduction and which would be complimentary to and consistent with
Governor Spitzer’s 15 x 15 Program.
D. Energy Planning
- Called for updated Energy Master Plan for Long Island which will garner
significant public input and be completed by the end of 2008;
- Conducted studies evaluating the engineering, environmental, and
economic feasibility of developing repowering projects at aging power plants
owned by KeySpan/National Grid (Barrett, Far Rockaway, Wading River,
Shoreham, Port Jefferson, and Northport);
- Created Stakeholder Committee as part of repowering study project for
Northport and Port Jefferson plants to keep the community informed and
involved in the process;
- Issued series of RFPs seeking to secure two blocks of renewable energy
over the next decade and expand LIPA’s portfolio of energy and capacity
generated from new renewable or existing Green Power sources that might
include: wind, solar, biomass, hydro, hydrogen derived from a renewable
energy resource, geothermal, etc.
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