Long Island Power Authority chairman Howard Steinberg last week said the energy provider would benefit from privatization following Gov. Andrew Cuomo’s decision to audit the energy utility.

LIPA, a nonprofit public corporation, had $6.85 billion of outstanding debt as of Dec. 31, 2010, according to the authority’s latest audit.

Steinberg believes the authority should return to its history of private operations. Officials formed LIPA in 1998 to acquire the Long Island Lighting Co., a private utility, and take on $6.7 billion of its debt.

“If I could wave a wand today, I would say, 'Restore LIPA to private hands and [Public Service Commission] regulation,’” Steinberg told Newsday last week after a board meeting on Thursday.

Other board members rejected the idea that LIPA should privatize and a Suffolk County legislator called for Steinberg’s resignation, according to the newspaper.

Cuomo on Wednesday directed state inspector general Ellen Biben to audit LIPA regarding $230 million of overbilling during the last decade and rate increases that are low enough to avoid a review by the PSC.

“The inspector general’s audit of how LIPA sets its rates will make sure Long Islanders know where their money is going, especially since they pay among the highest energy rates in the nation,” Cuomo said in a statement. “We must make sure that LIPA is following the letter of the law when it comes to how much it charges ratepayers.”

Steinberg did not return an email and phone call seeking comment.

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