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Two real deals

I'm not at all enamored at the subsidies involved - up to $360,000 per job over 10 years in state aid, plus, I shudder to think what in federal tax breaks. But I came away from a presentation Thursday night from the folks who are opening a silicon plant in Niagara Falls next year feeling better about the undertaking.

The company - Globe Metals - looks like the real deal. They are major players in the silicon market - they manufacture 45 percent of what's produced in the United States, 12 percent of the world. In doing so, they employ a clean process to produce the silicon, as opposed to the ways its done in, say, China, which isn't good for people or the planet.

Silicon is what's used to make solar panels, so you know its a growth industry. In the deal struck with state officials that granted Globe, among other things, 40 megawatts of low-cost hydropower, the company agreed to set aside 25 percent of its production for companies in New York State.

"Our goal is to make Niagara Falls a hub of the solar industry in the United States," said Gilad Amozeg, a Globe vice president.

Sounds good to me.

If there's an industry to be built here, economic development officials need to get busy. Globe officials said they'll start producing silicon in about nine months and roll out a new production line every six months after that until the plant is up and operating in about three years. So, it seems there's no time to waste. I'll bet the folks in Syracuse already have their eye on the silicon.

Another reason to feel good about the Globe deal is the logic Niagara Falls Mayor Paul Dyster expressed in explaining why he supports the project. He sees the investment in hydropower as a way of using renewable energy to create even more renewable energy.

Globe has 40 megawatts of hydropower in hand, and is hoping to land another 10. That 50 megawatts will power a plant that will produce enough silicon annually to make solar panels capable of generating 500 megawatts of power. That's not a bad return.

A lot of people are saying we need a different criteria for determining which companies get the region's share of cheap hydropower.

"We need to look more and more closely at who we give power to, and why," Dyster said.

He may have come up with a good criteria to add to the mix - give clean, cheap power to companies that can use it to create more clean, cheap power. If you use that logic, we could parlay our hydropower into a much larger clean energy industry.

Couple that with our access to fresh water - the oil of this century - and we could put our "woe is us" days behind us.

Many of the 80 or so people who turned out for the session, sponsored by the Buffalo Green Gold Development Corp., were impressed by Dyster. Two of them praised him as a "breath of fresh air."

He spoke of efforts in Niagara Falls to not only green the economy, but city government. He touched on history while offering a vision for the future. And he offered the crowd this semi-tongue-in-cheek advice: If you're going to gamble at the Seneca Casino, play the slots - they're the only thing the city gets a cut of.

The region's politicians and economic development policy makers would be well served to start showing up at these monthly "Business Gets Green" sessions at the Buffalo Museum of Science. Congressman Brian Higgins had a staff member there - he usually does when there's something to be learned - but I didn't recognize anyone else associated with a pol or economic decision maker. The next session is July 17.

Kelley was fired

Neither Gov. Paterson nor outgoing NYPA President Roger Kelley are talking about the latter's surprise resignation over the weekend. As many suspect, Kelley was essentially fired, two sources with connections to state government have told me.

Kelley, they said, agreed to step down only after being told Friday that he had two choices: quit or be fired. Both sources said the governor's demand came out of left field. One described Kelley as "shocked," the other as "dumbfounded" by Paterson's demand.

Meanwhile, the New York Post is continuing to squawk about the prospect of Richard Kessel succeeding Kelley. Writes columnist George Marlin:

"If he goes ahead with this appointment, Paterson will be sending a clear message to Upstate: Drop dead."

Apparently, some state legislators agree. The Watertown Daily Times reports today that a number of lawmakers are expressing reservations about Kessel.

Help program is in need of help

Here's a small example of our economic dysfunction.

There are no fewer than 243 programs in Erie and Niagara counties geared towards helping small business owners and would-be entrepreneurs. They're administered by some 60 different public and private sector entities.

Where to start? Many who could use the help probably don't, or muddle their way through.

There's a better way that is, unfortunately, sitting on someone's hard drive.

Four years ago, the Niagara Erie Regional Coalition put together a database listing all the programs. The intention was to put it online with a user-friendly interface that business owners could use to identify programs of use to them. You know, take the 243 programs down to a manageable list of say, a dozen.

NERC -- a coalition of the county legislatures in Niagara and Erie -- went looking for a sponsor. Someone with a little bit of cash and a little bit of manpower to make the data presentable on the Web and to keep it updated.

The NERC folks found no takers. To this day.

"It's sitting someplace doing nothing," said Jim Allen, executive director of the Amherst IDA, who was involved in the effort. '"We can't find anybody to take it and maintain it and keep it fresh.

NERC is renewing its effort to find a patron. With all the economic development agencies and business advocacy groups that populate this region, and all the money they spend, you'd think someone would come forward.

You think they have this kind of problem in, say, Raleigh?


McCain on the economy and other issues

The New York Times has done a couple of issue pieces on John McCain this week that are worth a read.

In Wednesday's paper, The Times examines discrepancies between the senator's claims on the campaign trails and the details of his policy proposals.

"So far, Mr. McCain is having it both ways. On the campaign trail, he has sounded like a bold tax cutter. To budget wonks, though, his campaign has gingerly inched away from those plans, saying details will be forthcoming. In the meantime, the most-cited analysis of his proposed budget doesn’t square with what he is saying on the stump."

On Tuesday, The Times did an insightful piece and accompanying chart showing how McCain's position on the issues compares with President Bush. The conclusion -- they're more alike than different, but McCain does part ways with George W. in some key areas.

"A look at Mr. McCain’s 25-year record in the House and Senate, his 2008 campaign positions and his major speeches over the last three months indicates that on big-ticket issues — the economy, support for continuing the Iraq war, health care — his stances are indeed similar to Mr. Bush’s brand of conservatism. Mr. McCain’s positions are nearly identical to the president’s on abortion and the types of judges he says he would appoint to the courts.

"On the environment, American diplomacy and nuclear proliferation, Mr. McCain has strikingly different views from Mr. Bush, and while he shares the president’s goals in Iraq, he was at times an outspoken critic of the way the war was managed."

The story serves as a good reality check, which might come in handy in the coming months as Democrats try to persuade voters that a McCain presidency would mean four more years of Dubya.

New new face of NYPA?

Kessel Folks who think the Power Authority focuses on downstate at the expense of Western New York are not going to like these developments.

For starters, several dailies, including Newsday, are reporting that Roger Kelley, who unexpectedly "resigned" Sunday, will likely be succeeded by Richard Kessel, at left, the former head of the Long Island Power Authority. Kessel appears to have two skill sets that may appeal to Gov. David A. Paterson -- experience in public utilities and a history of getting along with with both Democrats and Republicans. More on him in a minute.

The other development is the prospective make up of the authority's governing board. It's likely to take on more of a downstate flavor over the summer, round about the time Kelley's resignation takes effect (Aug. 1). That will allow the "new board" to vote on a successor, if the deed hasn't already been done.

The seven-member board will be different in a couple of ways. Right now, appointees of former Gov. George E. Pataki hold five seats. The terms of two trustees are expiring, and they will be replaced by nominees recommended by former Gov. Eliot L. Spitzer (Jonathan Foster) and Paterson (Eugene Nicandri). That will give the Dems a 4-3 advantage.

The change will also give another voice to downstate, as Foster, from New York City, would replace Robert Moses, from the Syracuse area. Still, most of the trustees would hail from upstate, not that it's deterred the authority from pursuing an agenda focused on serving the growing energy needs of New York City.

The GOP-controlled State Senate must confirm the nominees, and they'll go through the Energy Committee chaired by George Maziarz of Newfane, who says he's going to aggressively vet nominees. The Legislature wraps up its session at the end of this week, and Maziarz said he doesn't expect to act on the nominations by then. Instead, he said, the Senate will reconvene in July to consider nominations.

Maziarz said he's concerned with the prospect of a growing downstate influence on the authority. So what's he going to do about it?

He says he's looking for more than just the usual expressions of interest in helping Western New York and the upstate economy. A commitment to move authority headquarters from White Plains, just north of New York City, to Western New York would warm his heart.

"A positive message would be to relocate their headquarters," Maziarz said.

That idea was floated in the spring of '07 and has gone nowhere, even with Kelley, who lives in Clarence, at the helm. What are the odds with someone from Long Island running the show?

As for Kelley, a lot of people are scratching their heads about his resignation. There are suggestions that the authority's handling of the Troopergate scandal played a role, but Maziarz is among those who feel Kelley's departure is part of a political house-cleaning.

"After the session, I expect you'll see Paterson moving a lot of Spitzer people," he said.

You could say Kessel has been a lot of people's people. Mentored, it's said, by Alfonse D'Amato. Appointed to the Long Island Power Authority first by Mario Cuomo and later by Pataki.

Newsday reported Kessel's tenure at Long Island Power Authority "was replete with ups and downs, including ... sharp criticism of the authority's spending and disclosure policies."

The New York Post was less diplomatic in an editorial published today:

"There couldn't be a worse choice to run the New York Power Authority than long-time Long Island gadfly and political gofer Richie Kessel -- yet Gov. Paterson seems set to tap him for just that post.

"What a huge mistake."

The editorial went on to complain how Kessel, prior to his reappointment to the authority by Pataki, incurred the governor's wrath.

"In '94, Pataki himself branded Kessel as incompetent. He said the Long Island Lighting Company (which LIPA has since acquired) was poorly run, but 'if there's anybody who could run it worse, it would be Richie Kessel.' "

Paterson's press people wouldn't answer questions today about Kelley's departure, standing by a press release issued on Father's Day. As for Kelley's successor -- is it Kessel? - spokesman Errol Cockfield said:  "We're in the midst of a search and we're near to finalizing that search."

Given that Kelley's resignation was only announced a few days ago, it doesn't sound like there's been an extensive search conducted. Newsday reports that others potentially in the mix are Frank Murray, state energy commissioner under Cuomo, and Paul DeCotis, the state's present deputy energy secretary.


Now we know

On Friday's blog, I posed the question: Whither Roger Kelley?"

On Sunday, an odd day for an announcement, Gov. David Paterson's office gave us the answer: Out the door.

Paterson's press operation announced Kelley had resigned, effective Aug. 1. No reason was given.

Kelley has been on the job a year, a position he owed to former Gov. Eliot Spitzer. Much like the recent departure of Dan Gundersen as upstate economic develop czar, this may be a matter of the new governor wanting to his own people in key positions, and the head of the power authority is a key position. NYPA is one of the state's largest authorities and a portion of its revenues are used to pay for a lot of subsidy programs that used to, or might otherwise, be the financial responsibility of state government.

While the authority had not become more Western New York friendly under Kelley's tenure, my sense, in dealing with NYPA staffers over the past year, is that he was well regarded within the ranks as a businesslike professional.

Whither Roger Kelley?

I was expecting to wrap up this week's worth of Q&As with D. Patrick Curley, who, along with Elise Cusack, represents Western New York on the Power Authority's governing board. Curley was very guarded, however, and had little of interest to say. His one noteworthy comment: He believes the authority could be doing more to promote economic development, particularly in Western New York.

"To that end," he said, "I will propose that NYPA co-sponsor, with other appropriate state agencies, an economic development summit this fall in Buffalo. The conference will bring together recognized experts from the economic development milieu and will moderate topical panel discussions with representatives from Europe, Canada as well as our own federal, state and local governments."

Roger_kelley Let's turn to NYPA President Roger Kelley.

Because he's from Clarence, there were expectations in some quarters that Western New York might get more attention from the authority after his appointment a year ago. The timing appeared ripe.

In the months leading up to Kelley's appointment, assorted local officials had called for at least a partial relocation of authority headquarters from White Plains to Buffalo or Niagara Falls. And they wanted the authority to make better use of the Niagara Power Project to help the regional economy. None of that has transpired, however.

What has Kelley done for Western New York?

That was one of the questions I intended to ask him as part of a series of Q&As that I'm running this week on this blog. Kelley, I was told, is too busy. I made the invitation open-ended, saying we could talk whenever he had time. It's going on two weeks, and I haven't heard back.

Where does he stand?

Kelly gave a speech in September to the Independent Power Producers of New York, one that a member of his senior staff sent me last fall with the explanation that it outlined the authority's priorities under the new boss. Kelley made it clear in his speech that his priority was meeting the growing power demands of New York City. The only mention of Western New York involved a passing reference to a proposal to build a clean coal-fired power plant in the Town of Tonawanda, a plan that is now languishing. Some proponents grumble privately that the authority has failed to use its powers to help move the project along.

In April, the authority announced a deal that will lead to construction of a 500-megawatt plant -- that's pretty large -- in Queens to provide electricity to governmental customers in New York City. The plant will replace a facility that is being decommissioned.

Freedom_tower On a much smaller scale, the authority on Wednesday announced it has reached a deal to buy $10.6 million in fuel cells to help power four towers at the redeveloped World Trade Center in Manhattan. The state is picking up the tab for three of the fuel cells, the authority will pay for the fourth, and is scheduled to get reimbursed by the landlord over 20 years.

Nothing wrong with this. It's good the authority is promoting clean, renewable energy. And the redevelopment plan anticipates that buildings will be constructed to LEED standards. New York City could use all the green it can get.

It's noteworthy, however, there are no similar initiatives here, in the backyard of the people whose natural resources generate two-thirds of the profits the authority earns from its 18 power plants around the state. It's not like the authority hasn't invested in fuel cells before -- there have been 15 previous purchases. All but one is in or around New York City.

Among the operations they help power are a sewage treatment plant in Brooklyn, a hospital in the Bronx, a police precinct in Central Park and an aquarium at Coney Island.

A lot of people like to beat up on the authority for reasons that have more to do with the governor and State Legislature, who have demanded the authority use its revenues to help subsidize some 700 businesses across the state, few of them in Western New York. To some degree, that anger is misplaced.

But the contrast between the attention  NYPA pays to downstate and the lack of action in Western New York helps to perpetuate the perception among many here that authority officials think first and foremost about downstate.

Maybe some day Roger Kelley or Pat Curley will address those concerns. But not today, not in this blog, anyway.

Q&A - Congressman Brian Higgins

Higgins U.S. Rep. Brian Higgins has been in the forefront of trying to wrest more for Western New York from the New York Power Authority. He led the charge to obtain more money from the authority in exchange for local support of its bid to obtain an extension of its federal license to operate the Niagara Power Project in Lewiston. With that fight over, Higgins says it's time for the community to demand that its share of the plant's power generation, and the profits it produces, stay in Western New York.

Here's what he said in a recent interview:

You’ve long argued that Western New York should be getting more of a return from the Niagara Power Project, but the folks at the Power Authority remind people that the plant is a state, not local asset, and under the law, they’re right. Aren’t you riding a dead horse?

"This hydropower is a resource from and for Western New York; it has been historically, and we need to make it more so going forward. Our city was built around the availability of low-cost power. 

"Remember, it is not the Niagara Power Project that makes low-cost power possible. It is our own unique resources –- the lake and the Niagara River -– that make the Niagara Power Project possible. So the power and the economic benefits should accrue disproportionately, if not exclusively, to the benefit of Western New York."

The Power Authority has sold unused hydropower earmarked for local industry for an estimated $161 million from 2005 through the end of this year and is using it for statewide purposes. Should that money, in the future, be coming back to Western New York?

"The power and the proceeds from the sale of that power absolutely should stay in Western New York, for job creation and investment in 'new economy' businesses. The development of wind, solar and hydropower industries in Western New York should be funded by the proceeds of the Niagara Power Project."

There is no regional action plan on economic development to do what you espouse or anything else. Shouldn’t the locals get their act together before asking for money from the sale of power?

"The replacement and expansion programs were created at a time when Buffalo's economy was very different. They need to be expanded and reformed so they can be used by local officials to nurture the new economy, including the production of green energy, such as the assembly of windmills.  Local officials cannot effectively use the programs as they are currently structure. They are terribly outdated."

Why do you think NYPA dollars should be used to fund clean energy initiatives?

Lenders are already skeptical of alternative energy startups due to enormous initial capital costs.  The short-term nature of our federal tax incentives signals to financial markets a lack of confidence in the viability of these new technologies, and raises doubts that the federal government will be a long-term partner in promoting these enterprises.

"The current federal tax credit for wind power is only one year. That is not nearly long enough. I am co-sponsoring legislation to extend the wind energy tax credit to five years.  Meanwhile, the House just passed a package of tax extensions that included a three year tax credit for energy derived from biomass, geothermal, hydropower, landfill gas and solid waste, and a six-year extension for solar power. 

"Congress must pass more-aggressive and even longer-term tax incentives to induce investment in alternative energy to reduce our dependence on oil and to create green jobs in Western New York.  In this area, a tax incentive’s length is its strength, and our economy depends on providing the strongest possible incentives."

While you and others put much of the blame on the Power Authority, officials there note that to some degree, they’re merely doing what the governor and legislators have dictated through state law. For example, the sale of 70 megawatts of unused Niagara power, the so-called “loose juice,” is a legislative edict. What role does Albany have to play in changing the way Niagara power and profits are used?

"The current NYPA model is broken. It does very little to provide new business investment and job growth in the Buffalo-Niagara region. The rules of the replacement and expansion programs need to be expanded to allow businesses in the new economy to take advantage of low cost power. 

"There is no mandate to sell off loose juice. NYPA could and should invest the proceeds from the Niagara Power Project back into local economic development. The reason there is loose juice at all is because we have a smaller economy than when the programs were designed. So the power or the proceeds from its sale should be recaptured and dedicated to investment in the local new economy. 

"There are steps NYPA can take administratively to modernize its programs to adjust to the reality that Buffalo’s economy and needs have changed since the programs were conceived.  However, NYPA is able to profit off of loose juice, and therefore has no incentive to change its rules to eliminate and keep the power in the region.  So, because NYPA will not change, there needs to be a change in the statute to provide more flexibility in the local use of the power.

Friday: An interview with D. Patrick Curley, who represents Western New York on the authority's governing board.


Q&A - State Sen. George Maziarz

MaziarzState Sen. George Maziarz is in a position to make things happen regarding the Niagara Power Project. Earlier this year, the Newfane Republican assumed chairmanship of the Senate's Energy Committee.

Here's what he haad to say in a recent interview with The News.

The power authority has sold unused replacement and expansion power earmarked for local industry for $161 million from 2005 through the end of this year. Little of the money is coming back to Western New York. What do you think about that?

"The bottom line is that either the power or the money should be staying in Western New York.  If replacement or expansion power is going unused, then it should be offered to regional entities that do not meet the present criteria for receiving an allocation."

While a lot of people want to complain about the authority, a lot of what they're doing is at the behest of laws passed by the State Legislature. Aren't you guys a part of the problem?

"Well, of course, much progress needs to be made with our current statues.  But we live in a democracy and Western New York only has so many representatives in the State Legislature.  We need  to make the downstate-driven Assembly majority understand that our low-cost hydropower is a regional asset that helps our economy, just as Wall Street is a regional asset to greater New York City. Only then will we be able to pass the laws we need."

Do you think the New York Power Authority should be doing more for the local economy because of the hydropower plant in Lewiston.

"To say NYPA should be doing more for the local economy is the understatement of the year." 

There are a handful of companies in Niagara Falls getting discounts on hydropower worth more than $125,000 per job per year. Isn't that excessive?

"Yes.  However, many of the companies do have a long history of providing thousands of good jobs in Western New York. But some sort of redistribtion will have to take place." 

You took over as chairman of the Senate Energy Committee earlier this year. How do you intend on using your power to make the most of the Niagara Power Project?

"Appointments to the NYPA Board of Trustees must be approved by the Senate Energy Committee before they are confirmed.  As chairman of this committee, I will make every nominee fully aware of our local concerns and I will make it clear that the Niagara Power Project should be treated primarily as a regional asset."

Explain your concerns about how local governments in Niagara County are using the 25 megawatts of low-cost hydropower they received from the Power Authority as part of the relicensing settlement.

"The settlement occurred in June 2005 and now, three years later, not one new job has been created."

Tomorrow I interterview U.S. Rep. Brian Higgins.


Greening your business

The Green Gold Development Corp. is hosting its second "Business Gets Green" on Thursday, June 19. The first one last month was quite good.

The session will start with 20 businesses giving one-minute overviews, followed by three speakers, Gilad Amozeg of Globe Specialty Metals, Inc., who will talk about recently announced plans to start a solar silicon plant in Niagara Falls; Tracie Hall of the the U.S. Green Building Council, who will talk about LEED building standards; and Dave Majewski of Premier Services, who will discuss sustainable and organic landscaping.

Hall, in particular, should be of interest to anyone who wants to know more about building to green standards.

The session will run from 5:30 to 7:30 p.m. at the Buffalo Museum of Science.

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