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Gov. Cuomo Signs LIPA Reform Bill, Promises 'Competent' New Utility

NEW YORK (CBSNewYork) -- The Long Island Power Authority is now under new management.

Governor Andrew Cuomo signed a major LIPA reform bill Monday morning that will do away with the beleaguered utility. He made it official at a signing ceremony in Uniondale, WCBS 880's Mike Xirinachs reported.

More: NY Lawmakers Approve Plan To Overhaul LIPA

Management of the power company will be turned over to New Jersey-based PSE&G. LIPA will still exist, but with only 20 employees and nine trustees, CBS 2's Carolyn Gusoff reported.

Gov. Cuomo Signs LIPA Reform Bill, Promises 'Competent' New Utility

"Going through Hurricane Sandy for me, was the straw that broke the camel's back with LIPA," Gov. Cuomo said. " I said to the legislators, 'This has to end. Should've ended 10 years ago, but it has to end.' And we went and we found the best utility operator that we found that is PSE&G.

"I believe the energy generated by that hurricane actually turned out to have a sliver lining today by ending the LIPA tragedy that went on for too long," the governor added.

Competency, accountability and rate stability will be the result of the utility overhaul, Gov. Cuomo said.

A three-year rate freeze is included in the new plan.

"There are few things in life that are not going up, and to have a three-year rate freeze is really significant," Gov. Cuomo said.

As he put it, the old LIPA had to go.

"LIPA was wasteful, was expensive, and was incompetent. And that, my friends, is a bad combination of things in almost any occupation. It's especially bad when you're a utility company and it was that way for a long, long, long time," Gov. Cuomo said.

The governor said Long Island will still have power outages, but the way it responds to the problems will be more efficient.

"We'll have a competent operator to handle it this time, that's the difference," he said. "Does it mean everything is going to be perfect? No. But do I believe they will be significantly better than LIPA? Yes."

Long Islanders called for LIPA's head after Sandy, with power out to 1 million customers.

"They constantly failed. They never got their act together," one resident said.

"We have some of the highest rates in the country. We have debt in the billions of dollars," another resident said.

Civic leaders said they are skeptical the overhaul will bring enough oversight.

"It seems to have been pushed through without proper vetting and without the proper questions being asked and answered," Long Island Congregations Associations and Neighborhoods leader Sammy Janowitz told CBS 2's Gusoff.

To the McEvoys, who were sitting outside Monday to avoid running up their electric bill using air conditioning, the change means little -- for now.

"What you gonna do? You gotta pay whether it's LIPA or PSE&G. Gotta pay one way or another," one person said.

A new chapter is beginning but the books are not yet closed on LIPA's 15-year history. The U.S. Attorney is still looking into whether laws were broken by LIPA in paying exorbitant rates to consultants, Gusoff reported.

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