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Our power, their dollars

Niagara_power_project_scenic Back in the 1950s, to settle a vehement argument between Robert Moses and local officials over who would build and operate a new hydropower plant near Niagara Falls, Congress settled the issue by saying the state could have the plant, but industries in Western New York would get more than one-third of what was generated there.

That approach worked well until earlier this decade, when a number of large power customers shuttered their plants and other companies lost part of their allocations because they shed jobs, a major criteria for getting the power in the first place. That left the New York Power Authority with nearly a quarter of the region's share of the low-cost hydropower.

As I report today in The Buffalo News, the authority, working with local economic development officials, were slow to find takers for the power, and instead sold it on the open market at a big profit. I've calculated the return, through the end of this year, at $161 million. Little of the money has come back to Western New York.

Instead, the authority, under orders from the the governor and state legislature, has spent about half of it to subsidize the energy bills of some 700 companies statewide, few of them from WNY. The other half has gone into, among other things, authority operations, including a gold-plated bureaucracy. Read this for details.

These profits are part of the reason why the Niagara Power Project, the nation's second-largest hydropower plant, has posted record earnings the past three years. The plant provides the authority with most of its net revenue.

"It's their cash cow," said George Maziarz, chairman of the state Senate Energy Committee.

He and a number of other local officials are fed up with the situation, saying the money needs to remain in the community and the criteria used to allocate power needs to be amended. While the authority has found takers for almost all of the unused power, it's going to take up to three years for all of it to be put to use, and in the meantime, the authority will keep selling what's unused. Ditto for any power that becomes available.

To follow up today's story, this blog will post interviews the balance of the week with officials with varying degrees of influence to do something about this. On tap are Maziarz, Congressman Brian Higgins, Niagara Falls Mayor Paul Dyster and D. Patrick Curley, who represents WNY on the authority's governing board. I'll start tomorrow with Dyster.


Hyrdopower | New York Power Authority
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