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Hydropower victory may not stand

Western New York won a key battle in the fight to make sure the region's cheap hydropower goes to help businesses here.

But with a new governor taking over in Albany next month, there's no guarantee that victory will do much to protect the spoils from our greatest natural resource.

The victory came Dec. 1 from a commission appointed by outgoing Gov. Pataki to review the state's programs that use low-cost hydropower as an economic development tool.

The panel's recommendations protected most of the region's historic claims on its share of the Niagara Power Project's cheap electricity and backed changes that local business leaders have sought to broaden and modernize the eligibility criteria for that power.

"We were trying to protect what we already have," said Kelly Brannen, managing director of Niacet Corp. in Niagara Falls and one of two Western New Yorkers on the commission.

It also would take a 480-megawatt block of power now used to cut the average residential customer's electric bill by a couple of bucks a month and use most of it to encourage businesses to move or expand in New York -- a use that packs a much bigger economic punch.

The biggest failings in the recommendations -- and only partial ones at that -- would take profits from the sale of unallocated hydropower currently reserved for businesses near the Niagara Power Project or the St. Lawrence-FDR Power Project in northern New York and put them into a pool of funds reserved for economic development purposes. Only half the money would go to the region where the power is produced, with the other half going into a statewide pool.

Another change would extend the eligibility for replacement and expansion power to include companies in Erie, Niagara, Chautauqua, Genesee, Orleans and Wyoming counties, rather than the current 30-mile radius from the Lewiston power plant.

"It's an A-minus. A 95 percent out of 100," says Andrew J. Rudnick, president of the Buffalo Niagara Partnership.

But the timing is rotten. With a new Democratic governor taking office on Jan. 1, the recommendations of a commission from the outgoing Republican governor won't land at the top of Eliot Spitzer's priority list.

"I don't think there's anything assured about this," says Mark E. Hamister, the chairman of the Hamister Group in Amherst and the other Western New Yorker on the commission.

It also doesn't help that the commission's recommendations are just that. Changes in the way cheap hydropower is parceled out must be approved by the state Legislature and new governor.

"We're looking at it right now," says Christine Anderson, a spokeswoman for Spitzer's transition team. "Economic development is going to be one of the things that we're going to be looking at a lot in the coming weeks."

One other cloud hangs over the report: One influential panel member, the chairman of the Assembly's energy committee, Paul Tonko, D-Amsterdam, wrote a long dissenting opinion on it.

"Once you get into the political process, it's highly uncertain," Rudnick says.

Still, there's a lot of merit to the commission's recommendations, which also are sure to run into opposition from the New York Power Authority, which would lose control over the nine different hydropower programs that it now oversees in favor of a centralized process run by Empire State Development.

The best hope is that the recommendations become the starting point for a needed review of the state's low-cost power incentive programs and provide some valuable momentum to ward off any power grabs that would zap the Buffalo Niagara region.

This power struggle is far from over.


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