Administrative History

In 1983, Assemblyman Richard L. Brodsky and co-sponsors proposed expansion of public power in New York State as a means of effecting a reduction in electricity costs. The proposed legislation empowered the New York Power Authority to take over the investor-owned utilities through a market purchase of investor-owned utility stock at book value. It was asserted that ratepayer savings would accrue as a result of eliminating the need for return on stockholder equity (cost-savings from replacement of the equity with New York Power Authority tax exempt financing) and the elimination of federal income tax payments.

The Long Island Power Authority (LIPA) was created as a corporate municipal instrumentality of New York State by the Long Island Power Authority Act, Chapter 517 of the Laws of 1986, effective January 15, 1987. Pursuant to that act, LIPA is a political subdivision of the state exercising essential governmental and public powers in the area of Long Island energy needs. The LIPA Act expressed concern over the Shoreham Nuclear Generating Station. Shoreham was never granted a full power operating license from the Nuclear Regulatory Commission. This created significant rate increases, straining the economic capabilities of ratepayers. LIPA was established for the purpose, among others, of replacing the Long Island Lighting Company with a publicly-owned power authority.