A proposal in New York's state legislature would if approved place borrowing limits on the Long Island Power Authority.
Legislation introduced Thursday by State Sen. Kenneth LaValle, R-Port Jefferson, and Assemblyman Fred Thiele Jr., R-Sag Harbor, would require a public referendum when LIPA wants to issue new debt. The measure, dubbed the Long Island Power Authority Ratepayers Protection Act, is also aimed at enhancing transparency and oversight of the large issuer, which had around $7.9 billion in total debt outstanding in late 2015.
"The issuance of any further debt by LIPA would be subject to a mandatory referendum of residents in the LIPA service area," said LaValle and Thiele in their announcement of the bill. "LIPA would be responsible to Long Islanders, not Albany."
The bill would also replace the current appointed LIPA board with eight trustees who are elected by voters from eight districts and a chairman appointed by the governor. The board would have full discretion to consider rate increases and could not approve a final plan until public hearings were held in impacted service areas.
LIPA declined to comment on the proposed legislation. The utility's operations were taken over by PSEG Long Island in 2014 following the LIPA Reform Act of 2013.
Standard & Poor's and Fitch Ratings revised LIPA's credit outlook to stable from negative last November ahead of a $266 million electric system general revenue bond sale citing a three-year rate hike from 2016 to 2018 approved by the New York Department of Public Service. LIPA also recently sold $1.64 billion in restructuring bonds from two sales through its Utility Debt Securitization Authority.
