Superstorm Sandy has all but completed its swamping of the Long Island Power Authority's high-level suites, as Chairman Howard E. Steinberg became the latest top-level figure to leave in the exodus at the beleaguered electric utility.
Steinberg's resignation letter was submitted to New York Gov. Andrew M. Cuomo Friday, Michael D. Hervey, LIPA's chief operating officer and acting CEO, told Bloomberg News via an email statement.
Steinberg's resignation was accepted immediately, a LIPA representative told the Wall Street Journal. The move had been anticipated for several weeks, a source familiar with the matter told the Journal.
On Nov. 13, Hervey himself resigned as COO and acting CEO, effective at the end of the year, as noted by LIPA at the time.
Bruce Germano, LIPA's vice president of customer services, and X. Cristofer Damianos, one of its board members, also have resigned since Superstorm Sandy devastated the utility's service area on Oct. 29, according to Bloomberg News.
LIPA is a nonprofit municipal electric provider of service to more than 1.1 million customers in Nassau and Suffolk counties and on the Rockaway Peninsula in Queens County, one of the five counties constituting New York City. Within the U.S., LIPA is the second-largest municipal electric utility in terms of electric revenue, the third-largest in terms of customers served, and the seventh-largest in terms of electricity delivered.
The majority of LIPA's customers lost power because of Superstorm Sandy's disastrous effects on its transformers, utility poles, and wires -- and a minority of them did not get it back for more than two weeks.
Due to LIPA's indisputably poor performance both before and after the storm, its status as a state-run authority -- controlled by the governor, who can appoint nine of the 15 members of its board -- means the utility will likely be reorganized by Cuomo after he gets the report of the Moreland Act commission he empaneled last month.
Co-chaired by Robert Abrams, former New York state attorney general, and Benjamin Lawsky, superintendent of the state Department of Financial Services, the commission has been charged with investigating the management, preparation, and response of the state's power-utility companies during the major storms that have struck it during the past two years. These storms were Tropical Storm Lee, Hurricane Irene, and, of course, Superstorm Sandy.
The Moreland Act allows New York's governor to go through the affairs of any of the state's boards, bureaus, commissions, or departments with a fine-tooth comb.
One aspect of this Moreland Act commission's process could be interesting to equity-market participants, as LIPA has a contractual relationship with the publicly traded National Grid PLC (NYSE: NGG) for the provision of certain services. Both LIPA, based in Uniondale, N.Y., and National Grid, headquartered in London, were sued last month by customers who accused them of failing to properly maintain their system, according to Bloomberg News.
The U.S. share price of the U.K.-based National Grid closed up 12 cents, or 0.21 percent, at $56.64 on Friday.