Long Island’s largest business group, the Long Island Association, has come out in opposition to New York Gov. Andrew Cuomo’s proposed privatization of the Long Island Power Authority.

Long Island electricity customers have been unhappy with LIPA’s high rates and slow response to storm-related power outages. In January the Moreland Commission, which Cuomo appointed, released a recommendation to privatize LIPA. Two days later Cuomo endorsed the recommendation.

Since then several commentators have criticized the proposal. The ratings agencies have said a privatization would require LIPA to immediately redeem all outstanding bonds and notes.

Since endorsing privatization, Cuomo has retreated and is now simply saying that LIPA needs to be changed, not necessarily privatized.

The Long Island Association is recommending that LIPA go forward with a planned transition for PSEG of New Jersey to take over managing the system in January. Additionally, it recommended altering LIPA’s contract with PSEG so that PSEG would handle LIPA’s storm preparation and response, creating an aggressive debt-retirement plan, simplifying LIPA and its board, and having the Public Service Commission oversee LIPA’s rates.

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