S&P sees potential risks in recent departures of top LIPA executives
Dennis Anosike has resigned as chief financiial officer for LIPA. Credit: LIPA
A series of high-level executive departures at the Long Island Power Authority “create uncertainty about future strategy [and] stability” of the utility, a top Wall Street ratings agency said in a bulletin issued Monday.
S&P Global Ratings said it was “monitoring a recent series of resignations and retirements” at LIPA to “better determine the underlying reasons driving these departures, whether there is a likelihood of additional departures, and any potential impact on the utility’s strategic planning and credit quality.”
S&P stressed its review did not constitute a ratings action or downgrade, but said, “We view these management changes as significant and widespread.”
Newsday on Thursday reported that Dennis Anosike, who was recently named chief financial officer, resigned unexpectedly last week, after just six months on the job. He was hired after Gov. Kathy Hochul appointed four new board members, including chairwoman Tracey Edwards, a former Public Service Commission commissioner, who has put a spotlight on LIPA costs and practices.
"While the recent changes in LIPA's senior leadership have garnered attention, it is important to emphasize the strong continuity and resilience within our organization,” acting CEO John Rhodes said in a statement, noting the authority “swiftly” named an acting CEO, “ensuring that our financial operations remain on a steady course.”
Rhodes said LIPA's “commitment to sound succession planning has positioned us to navigate these transitions smoothly. We remain confident in our ability to meet our strategic and financial goals, and our highly qualified team is fully equipped to uphold the high standards and expectations that have been in place for many years."
Some have criticized the new direction under Hochul’s leadership that has focused a spotlight on LIPA rather than its contractor, PSEG Long Island, which manages the electric grid. Former trustee Peter Gollon earlier this year predicted further departures at LIPA, saying the new tone at the authority was “contrary to LIPA values.” Current trustee Drew Biondo last week said of the departures, “Everyone’s running for the doors and the public has to ask, ‘Why?’ ”
Edwards in a statement to Newsday last week said the “new LIPA administration is working diligently to address the concerning issues raised by the independent management audit of the past administration.” Newsday has reported that the same state audit also found issues with PSEG Long Island, which is vying to retain its $80 million annual contract to run the grid once it expires at the end of 2025.
S&P noted that the changes at LIPA are “occurring at a time when LIPA’s power supply contract with National Grid, and its third-party management contract with PSEG Long Island, near expiration, and while the authority is simultaneously seeking to comply with New York State’s ambitious decarbonization plan.” LIPA recently issued an bid request for the grid-management contract.
LIPA named Donna Mongiardo, its vice president and controller, to fill the chief financial officer role on an interim basis. Anosike had taken the job at LIPA after a national search and had planned to move to Long Island from Chicago, he previously told Newsday.
Anosike’s hiring came just prior to a shake-up at LIPA that saw the resignation of 10-year veteran Tom Falcone as chief executive, the resignation of Mujib Lodhi as chief operating officer and chief information officer, and the planned retirement of budget director Gerry Ring, among others.
Several of the top positions at LIPA are being filled on an interim basis, while the authority conducts searches to fill the roles permanently. Rhodes took the CEO role on an interim basis, and the chief operating role was filled by executive adviser Werner Schweiger. LIPA has also elevated two former PSEG officials to take on more prominent roles at LIPA, including now-acting chief information officer Brian Rudowski.
S&P noted that LIPA has filled “several of these positions … indicating a degree of operational continuity.”
Nevertheless, S&P said, “we view the changes in senior leadership, as well as the underlying reasons for the changes, as potentially presenting risks to LIPA’s strategic planning.”
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.