The agency, known as LIPA, has time and again failed to plan for extreme weather events despite a series of warnings by government investigators and outside monitors, The New York Times reported Tuesday.
It has been the slowest utility to deal with fallen trees and downed power lines.
More than 90 percent of LIPA's 1.1 million customers lost power during Sandy and the severe weather that followed. More than 10,000 customers still had no power as of Tuesday.
Gov. Andrew Cuomo named a 10-member commission that, armed with subpoena power, will investigate the work of utilities and state agencies following Sandy, the New York Daily News reported.
Energy committees in both the state Assembly and Senate have announced they will hold their own hearings.
LIPA has not had a permanent chief executive for two years and five seats on the 15-member board of directors are vacant. The authority's acting chief executive, Michael D. Hervey, Tuesday announced his resignation effective the end of the year.
Paper maps used to locate lines are grossly outdated, critics say, and monitoring and information systems are below industry standards.
Aggravating the problems at LIPA, many of its managers know little to nothing about running a utility. The Times found relatives and friends of politicians filling a number of well-paid executive positions at the authority.
Despite the complaints of customers and hectoring by officials, Hervey, the outgoing CEO, thinks LIPA is doing the best it can.
"We are on plan," he said. "We cannot tell each of our 1.1 million customers exactly what is happening with their service. But I think, all said, when we look around at neighboring utilities, and the damage that we had, we are progressing very well."