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Top New York prosecutor investigates utilities' handling of Sandy

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Story highlights

  • Long Island Power Authority and Consolidated Edison being investigated
  • New York Attorney General Eric Schneiderman's office subpoenaed LIPA and ConEd
  • Source: Office wants to know what they did to prepare and handle aftermath
  • LIPA and ConEd have indicated they will cooperate with the investigation

New York Attorney General Eric Schneiderman is investigating whether New York utilities Long Island Power Authority and Consolidated Edison adequately prepared for and responded to Superstorm Sandy, according to a source with knowledge of the investigation.

On Wednesday, the attorney general's office subpoenaed LIPA and ConEd requesting information about what they did to brace their systems ahead of the storm and their management in its wake, the source said.

The investigation, which began November 5, is examining whether ConEd, as a publicly traded investor-owned utility company, breached the Public Service Law, which requires gas and electric companies to "supply safe and adequate service."

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Schneiderman's office is questioning whether LIPA, which was created under the Public Authorities law, violated its legal obligations to ensure a safe and dependable flow of electricity.

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The attorney general is also studying disclosure statements LIPA made to bondholders regarding the ability of their power systems to weather severe storms, the source said.

    Elizabeth Flagler, a spokeswoman for LIPA, said in an e-mail to CNN, "We have reviewed the AGs subpoena and intend to comply with it in all respects."

    Joy Faber, a spokeswoman for ConEd, said the company is cooperating with the investigation.

    "We look forward to reviewing the company's storm preparations and response with the Attorney General and all interested parties," she said.

    On Tuesday, a lawsuit was filed by two residents, claiming LIPA and its partner, National Grid, committed "gross negligence, breach of contract, and fraud," according to attorney Ken Mollins, who is representing the plaintiffs.

    Also on Tuesday, amidst heavy criticism of his company's handling of the storm, Mike Hervey, chief operating officer of LIPa, said he would resign, effective at the end of the year.

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