News: LIPA Still Dealing with Storm Costs
(Long Island, N.Y.) Weeks after Tropical Storm Irene has shaken residents across Long Island, the Long Island Power Authority is still dealing with the excess costs. A reported $176 million has been the estimated final price tag for the most expensive storm in history for the Long Island utility corporation. While it was previously calculated to cost over the $100 million marker, the heightened expenses has gotten many Long Islanders fearing rate increases from the Long Island Power Authority.
The most expensive storm for the company is likely to be covered in part by federal disaster relief funds. An estimated seventy-five percent of the costs should be absorbed by government funds; however, applying for such assistance could spread over the next few months. The Long Island Power Authority needs to embark upon the lengthy application process to obtain a speedy compensation for storm-time expenses.
The major sources of the expense come from labor and the extra materials required for making repairs. Over seven thousand workers were used to help in the restoration process, which lasted for more than a week after the onset of the storm. Labor costs include the transportation, food, lodging, and equipment charges necessary to sustain the excess out-of-town workforce in local hotels.
An estimated three to four thousand entered the workforce from out-of-town and stayed locally for a week or more following Tropical Storm Irene. The other costs associated with labor came from National Grid employees and contractors who worked overtime following the storm’s damage to Long Island power lines. Material costs included utility poles, wires, and transformers for repairs.
The storm left 523,000 Long Island Power Authority customers without power, topping the 2010 Nor’easter which affected 263,000. While the price tag for Tropical Storm Irene breached $175 million, last year’s storm cost roughly $68 million in expenses. Federal funds reimbursed around $50 million of those expenses, promoting the Long Island Power Authority to reduce rates.
The Long Island Power Authority’s storm budget for this year was a mere $47 million, which will hardly put a dent in Tropical Storm Irene’s whopping expenses. Last year the Long Island Power Authority spent $200 million in expenses, a chunk of which was used for advance preparation for a hurricane that never hit Long Island. As a rough estimate, $34-40 million in new costs for the Long Island Power Authority could translate to a 1% increase in rates for customers.
