(Corrects paragraph 12 to show two storms, not one, reached hurricane strength)
By Hilary Russ and Curtis Skinner
NEW YORK, Oct 29 (Reuters) - Residents of a dozen New Jersey shore cities plan to light up the coast with flashlights to mark Superstorm Sandy's anniversary on Tuesday, while recovering from the hurricane that ravaged the east coast and left 159 people dead.
Many shore residents in storm-hit states, including New York and Connecticut, are still coping with damaged homes and waiting for $48 billion in federal aid pledged for rebuilding. The rare, late-season tropical storm damaged more than 650,000 homes, prompting evacuations and closing businesses for weeks.
Sandy hit with almost hurricane strength winds and extended over a massive 1,000 miles (1,600 km), causing a storm surge that flooded downtown Manhattan and long stretches of the New Jersey shore, leaving millions in the dark, some for weeks.
The floodwaters breached New York City's subway system, which was partially out of commission for much of the following week, and left many area residents struggling for weeks to find adequate supplies of gasoline, as power outages left homes dark and cold and filling stations closed.
Federal officials on Monday unveiled plans to release a second $5 billion round of funding from the Sandy relief fund, for New York State and City, New Jersey, Connecticut, Maryland and Rhode Island. The money is aimed at rebuilding and repairing homes damaged by the storm.
U.S. Senator Chuck Schumer said the relief money has been slow to come so far - less that a quarter of the $48 billion authorized had been allocated by the end of August but said the flow of funds would pick up.
"The spigot is now open," Schumer told a press conference on Monday.
Congress initially authorized $50 billion for Sandy recovery, but the automatic spending cuts that kicked in earlier this year reduced that target to about $47.9 billion.
Private money has also flowed into communities. Bloomberg's Mayors Fund for emergency response said on Monday it had received more than $60 million in contributions to a fund to help cover restoration.
On Tuesday, Interior Secretary Sally Jewell plans to launch a $100 million competitive grant program, funded by the non-profit National Fish and Wildlife Foundation, to help restore coastal habitats and bolster natural systems, to allow these areas to better protect local communities from future storms.
Sandy also prompted local officials to rethink storm preparedness. New York City Mayor Michael Bloomberg in June proposed a $20 billion plan to prepare the city to better handle future storms, with measures ranging from new flood walls to building up beaches, which can be natural barriers.
While this year's Atlantic hurricane season has been the quietest in 45 years, with only two storms reaching hurricane strength, regional leaders said shore communities need to remain ready for similar high-powered storms.
"Our weather patterns are in fact changing," Connecticut Governor Dannel Malloy told reporters on Monday. "We're seeing more severe weather occurrences, closer together and we need to prepare for that. We need to do everything we can to help our citizenry prepare for that."
A year on, the memory of the storm remains fresh in the hardest-hit communities.
On Staten Island, a borough of New York City in the harbor that faced the brunt of the storm surge, 46-year-old Christine Cina's house survived floodwaters 6 feet (2 meters) high - so much water that Cina and her family were rescued by boat.
While her home remains habitable, a guest bungalow where her sister lived is a pile of rubble.
"My kids have to look at this every day and be reminded of the terrible things that happened," Cina, 46, recalled in a recent interview.
Residents of New Jersey shore cities from Ocean City to Jersey City plan to stand along the coast with flashlights on Oct. 29 at sundown, around the time the storm made landfall a year ago. The event, called "Light Up New Jersey," is organized by a local radio station, New Jersey 101.5.
In New York, officials plan to waive subway fees on Tuesday for residents of the low-lying parts of Brooklyn and Queens which were most affected. New York State is also launching the nation's first state-level strategic gasoline reserve, intended to avoid fuel shortages such as those seen after Sandy.
In New York City's South Street Seaport, Monique Perez recalled how the clothing store where she works, Superdry, had to be gutted after 5 feet (1.5 meters) of water rushed in with such force that it picked up a cash register and smashed it through the wall of an adjoining clothing retailer.
"We could literally see into the Abercrombie and Fitch," said Perez, 39, who serves as East Coast District Manager for the Superdry chain. (Additional reporting by Deborah Zabarenko in Washington; Writing by Scott Malone; Editing by Richard Chang and Kenneth Barry)