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LEWISTON BALKS AS POWER AUTHORITY OFFERS $1 BILLION DISCOUNT DEAL

The New York Power Authority has offered about $1 billion in low-cost electricity and cash, paid over 50 years, if four communities and three school districts will back a new license for its Niagara Power Project.

All but one of the seven -- the Town of Lewiston -- have already signaled approval. The town is dissatisfied with the split of electricity proposed by its partners.

Representatives of the other six -- Niagara County, the City of Niagara Falls and the Town of Niagara and the school districts of Lewiston-Porter, Niagara Falls and Niagara-Wheatfield -- applauded the deal.

The City of Buffalo, Erie County, the Tuscarora Indian Nation and state agencies such as the Department of Environmental Conservation await their settlement offers, which are expected to become public in coming weeks.

The Niagara offer, made public Wednesday, represents the tax-exempt Power Authority's proposed compensation for the Power Project's impact on surrounding communities from 2007, when the current license expires, until 2057.

It includes more than enough low-cost power to cover the present electric bills from the group's seven members, which call themselves the Niagara Power Coalition, said Mark Zito, a Niagara Falls School Board member and the coalition chairman.

At present prices, that 25 megawatts of electricity would save coalition members a total of about $11.8 million annually, according to the Power Authority.

It would take 20 to 21 megawatts to power all of the coalition members' buildings, from Niagara County Jail to Niagara Falls High School, Zito said.

County government is in line for nine megawatts of the low-cost power, the largest chunk, while the Town of Niagara would receive less than half a megawatt.

One megawatt of power is generally considered enough electricity to serve 1,000 homes.

The county's helping of low-cost power would save it about $1.5 million a year, Zito said. Niagara Falls would save about $1 million annually, and other coalition members would save smaller amounts.

The deal also would include cash in the form of a community fund, an average of $5.5 million annually, to be divided among coalition members. That adds up to $275 million over 50 years.

Coalition members have agreed that Niagara Falls and the Town of Lewiston would annually get the biggest slices, about 17 percent, or $850,000 apiece. The Niagara-Wheatfield School District would get the smallest, $600,000.

The money would come from the sale of about 24 megawatts of power, the proposal said. An increase in electricity prices could mean more money, but an increase in electrical generation costs could dampen that effect.

Also, $3 million of the $10 million annual Power Authority allocation earmarked for the Niagara River Greenway would be dedicated to Niagara County projects designated by Niagara Power Coalition members.

Finally, the Power Authority said it would make 104 acres of surplus land available to neighboring landowners. Most of that property is in the Town of Lewiston, where most of the hydropower project is located.

Zito, in praising the proposed settlement, has stressed that the federal relicensing law does not require the Power Authority to pay its neighbors anything.

Niagara County "gladly and eagerly" accepts the settlement, said County Legislator Lee Simonson, R-Lewiston. Hopefully, he said, the electricity and money will fertilize growth in the county over the next 50 years.

Niagara Falls Mayor Vincenzo V. Anello said the city would use the settlement for tax stabilization and economic development, "strengthening the tourism industry so that it's an economic engine for the whole Western New York region."

The offer cannot be too generous, as it will be paid by the rest of the Niagara Power Project's customers, said Rick Chase, the Power Authority's relicensing chief. The offer "balances our obligation to host communities with our obligation to our ratepayers, who are going to pay the bill for all of this," Chase said.

To use the low-cost electricity in the proposal, coalition members would form some type of electric company, Zito said. That is still a few years away.

Most of the coalition is expected to officially approve the offer in coming weeks, Zito said.

Lewiston Supervisor Fred Newlin said, however, that town officials want to remain part of the power coalition but think that it is premature to accept the proposed division of electricity between coalition members.

First, the town would like an energy audit done so that everyone's low-cost electricity share, which is supposed to be according to current usage, can be confirmed independently.

"When the stakes are so high," Newlin said, "you have to make sure it's accurate."

e-mail: agalarneau@buffnews.com

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