NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8936
SPONSOR: Thiele TITLE OF BILL:
An act to amend the public authorities law, in relation to comprehensive
and regular management and operations audits
PURPOSE:
The purpose of this bill is to ensure that the public service commission
has the authority to require LIPA and its service providers to implement
recommendations made in any comprehensive and regular management and
operations audit where fraud, abuse, or mismanagement is found.
SUMMARY OF PROVISIONS:
Section One and Two amend the public authorities law to provide the
Public Service Commission with the ability to enforce the adoption of
recommendations contained in a comprehensive and regular management and
operations audit in circumstances where the report indicates a finding
of fraud, abuse or mismanagement by a utility.
Section Three provides that this act shall take effect immediately.
JUSTIFICATION:
All service providers who contract with the Long Island Power Authority
are required by statute to undergo a comprehensive and regular manage-
ment and operations audit at least every five years. The audit is
contracted by, and issued to, the Public Service Commission. However,
the Public Service Commission does not have the authority to require
that the Long Island Power Authority (LIPA) and the utility take steps
to implement any of the recommendations contained in the audit. The Long
Island Power Authority can ignore the recommendations contained in an
audit, so long as they declare the recommendation to be inconsistent and
hold a public hearing on the topic.
This optional implementation is problematic generally, but would raise
substantially greater concerns in the event that an audit revealed
waste, abuse or fraud on behalf of a service provider in its contract
with LIPA. The Public Service Commission must be given the authority to
require appropriate remediation when fraud, waste and abuse is uncovered
in order to protect ratepayers. This legislation accomplishes that by
providing a process whereby the Commission can institute an order
requiring compliance, and implement a civil penalty including the revo-
cation of the service provider's authority to operate within the state
in the event that compliance deadlines are not met.
LEGISLATIVE HISTORY:
New Legislation.
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This act shall take effect immediately.
