Dear Editor:
We would like to clarify a number of issues and points made in the article "
The Authority does not issue debt to pay operating expenses. Our upcoming financings involve refinancing debt on more favorable terms and issuing bonds to finance long-life capital and technology projects and to pre-fund certain required pension contributions, none of which are operating expenses under GAAP accounting standards.
The new Authority Board that took office in January 2014 authorized this borrowing at their August 2014 meeting pursuant to the operating and capital budgets for 2014 adopted by the prior Board in December 2013. Since assuming their duties in January, members of the Board have worked with staff to review the Authority's existing plans and policies and will be presented with the first such opportunity to implement their vision for the Authority's future as part of the 2015 budget process.
We continue to look for opportunities to responsibly manage our debt as we work with our new service provider to invest in the electric system and provide our customers with cost effective and reliable electricity. The Authority has made a successful transition to a new business model and a new service provider, PSEG Long Island, over the past nine months and will release a three-year plan in February 2015.
Respectfully,
Tom Falcone
Chief Financial Officer
Long Island Power Authority
