Abridged History of LIPA, LILCO, BUG., Keyspan & NYS Energy Rip-offs
October 1994, Shoreham Nuclear Power Plant is decommissioned. Although never operating commercially, LILCO’s it cost Long Islander’s approximately $6 billion.
November 1995, The voters of New York State reject a referendum asking the voters to authorize public corporations of the state such as LIPA, to contract indebtedness without public voter approval and without limit , to pay for private corporations for their public purposes. Without such approval LIPA could not by LICO without voter approval.
1997At the request of Governor Pataki, Frank Zarb, the guru of corporate finance, devised a LILCO bailout plan that gives LIlCO stock holders the deal of the century and makes Pataki look like Long Island’s savior. All he really did was give LILCO stockholders every thing, made his millionaire Wall Street friends richer and refinanced debt over 30 years at a lower rate.
September 1997,LILCO launched a $1 million advertising campaign to gain customer support for the takeover. Richard Kessel promises a 20% reduction in rates and to send each ratepayer a $100 to 200 rebate check as part of the deal.
1997to purchase, The Suffolk County Legislature, and Civic activists Led by Jack Koka, HIA & ICE commission studies that found the LILCO-LIPA deal the worst thing that could happen to long Island. Despite an initiative referendum with 40,000 signatures and several law suits the power of the governor and money behind the deal won. No one got to vote.
May 1998,LIPA assumes $8 billion in LILCO stock and debt plus $4.5 billion in Shoreham debt as part of a "deal" where the public authority, LIPA and profit motivated KeySpan (BUG) join forces as the oddest couple in the power business. At the time 100% of LILCO’s stock was valued at $2 Billion. The 8 billion purchase of the $2 billion company was partial. All the debt and negative properties were purchased however valuable property was not.
May 1998three citizens, took the Governor, State Senate, State Assembly, PACB, LIPA, LILCO & BUG to Federal court for purchasing LIPA in violation the defeated 1995 resolution prohibiting such purchases without a vote. They were denied standing and deal went through and no one got to vote.
Ratepayers are left with an enormous pile of debt as LILCO’s investors escaped largely unscathed
May 1998, immediately after the sale, LILCO gave its 25 senior executives a $million severance package and Chairman Catacosinos $42 million.
June 1998, Prior community activist and now LIPA Chairman Richard Kessel block a fact-finding public hearing to see If LIPA, PSC and Pataki knew the $67 million severance package was part of the LILCO takeover. They did. Long Island Legislators went berserk. Long Islanders began to realize that their "Richard" was now KeySpans boy. And Catacosinos kept his hard earned money.
Let see, 1,000,000 ratepayers divided by $67,000 million is only $67 per ratepayer. That’s not such a bad deal for the guys that sold us a $2 billion company for $8 billion. In fact it just shows how Chairman Kessel is looking out for long Island. Particularly, since Richard is going to give us a $100 to $200 rebate.
June 1998, Chairman Kessel announced that he will send $142.5 million in rebate checks to ratepayers soon. However he don’t have the money. He planed on using the RICO award money already awarder to the ratepayers by the courts as his Kessel–Pataki rebate. Unfortunately the judge didn’t agree with Richard. So what did Richard do?
He borrowed the money and sent us our own personal Kessel–Pataki rebate around election time. In fact the "Richard Rebate" is a forced loan that will cost us $300 million to repay. Let see, 1,000,000 ratepayers divided by $300,000,000 million is only 300 per ratepayer.
And now a quick review of LIPA’s birth.Under the watchful eyes of Governor Pataki, Sheldon Silver and Civic Activist Richard Kessel, at the direction of financial genius Frank Zarb we bought a $2 billion company for $8 billion. Paid Catacosinos $42 million for selling it to us and got a $200 rebate that will only cost us $375.