How do you want your synergy savings? That's a question the Long Island Power Authority is deciding now that National Grid has completed the KeySpan buyout.
When it announced in April that it had reached contract terms for National Grid to manage Long Island's electric grid, LIPA said its s are of the "synergy savings" from the deal amounted to $91million.
But in a letter to LIPA, in which he complained that LIPA ratepayers were "not afforded the same degree of regulatory oversight and protection as other ratepayers in the state," state comptroller Thomas DiNapoli dropped a bomblet. He listed the savings as just $69 million.
So what's the deal?
LIPA spokesman Bert Cunningham said the $69 million is the amount LIPA would receive if it opts to take its synergy savings upfront rather than over the seven-year contract life.
Cunningham said "no decision has been made at this time" about how LIPA will take the money. LIPA has mentioned the $69-million figure before, but some observers were aghast to hear the lower number, particularly in light of recent reports of post-merger KeySpan executive pay and synergy amounts being received by other ratepayers.
KeySpan gas customers in New York City and Long Island will share $494 million, while former Niagara Mohawk customers upstate will get $100 million, according to industry reports. (The state Public Service Commission has reported LIPA's share as $93 million.)
On a per-ratepayer basis, "this is a cup of coffee at McDonald's," said LIPA gadfly Peter Quinn of the $69 million. Quinn's previous characterization of the benefit to individual LIPA ratepayers as "breakfast at IHOP" was referenced several times during summer PSC hearings.
"We're not getting much of a benefit compared to what the former CEO of KeySpan is getting." Quinn was referring to recent revelations in Newsday that former KeySpan chief executive Robert Catell has stock, options, retirement and a potential golden parachute from National Grid valued at $81.4 million.
That prospect blew away Suffolk Legis. Wayne Horsley (D-Babylon).
"It is incredulous that a payment to a senior executive can exceed the total dollars of savings that all of Long Island will receive," Horsley said. KeySpan has said Catell's package was accumulated over a 50-year career, and some of the payments require that he leave 13 months into the new ownership. The company expects him to stay for two years.
That didn't impress Horsley.
"Once again, our public has been shortchanged," he said.