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Robert Moses muscled through construction of the Niagara Power Project

Robert Moses had built billions of dollars worth of bridges, parks, expressways and public housing highrises in and around New York City, and 50 years ago he wanted to construct what would be North America's largest hydropower plant on the escarpment of the Niagara River.

The Power Broker, as he later became known, came to Niagara County promising prosperity. But Moses and the State Power Authority he headed were regarded as interlopers by many local political, business and community leaders. They were skeptical of his promises and fearful of losing local control over the natural resource that was the source of both electricity and property tax revenues for the region.

Local authorities fought him all the way from Niagara Falls to Albany to Washington, D.C., with resolutions, legislation and lawsuits. Along the way, outraged Tuscaroras, faced with the loss of much of their reservation in Lewiston, took to shooting up and sabotaging the authority's construction equipment. The Power Broker prevailed, however.

Moses' success is the most striking, but far from the only, example of actions that stripped the region of any claim to the power and profits generated by Western New York's greatest natural resource - Niagara Falls and the river that feeds it.

"The Niagara River is a natural resource that is a birthright of the people of Western New York. We have a right to reap the benefits that come from that asset, and that birthright has been systematically stripped from us the past 50 years," said Thomas P. Callahan, a Lockport businessman who has operated small upstate hydropower projects.

The view outside Western New York is different.

"There's no place in the country where locals successfully asserted a right to a percentage of the benefits," said Ben Wiles, senior attorney with the Albany-based Public Utility Law Practice.

Business, and later government, have been tapping Niagara Falls and the Niagara River to generate hydropower for nearly 300 years, beginning with a saw mill in 1725. Generating plants to serve a range of customers were subsequently built on both the American and Canadian sides of the river in the late 1800s and early 1900s.

Electricity could not be transmitted long distances in those days, and these generating plants attracted energy-intensive manufacturers. What's more, those who owned the generating plants lived in the community, in some cases just blocks away from their facilities.

"The people who made the decisions were local people, and decisions were made in a way that favored us because they knew the effect on the community," said Thomas Yots, the official historian of the City of Niagara Falls.

Niagara Falls became known as the "Power Capital of the World" and saw its population grow sixfold, to 75,000, from the time the first Schoellkopf plant opened in 1881 to the onset of the Great Depression.

The first hydropower was transmitted to Buffalo in 1896. It soon became known as the City of Lights. Like Niagara Falls, it, attracted power-hungry industries to become one of the nation's major manufacturing hubs.

"There was a vision at one time that factories would stand, running nonstop, all along the Niagara River from downtown Niagara Falls to downtown Buffalo," said Yots, a co-author of "The Power Trail: History of Hydroelectricity at Niagara." While that turn-of-the-century vision never panned out, it was safe to say the region owned the power - and prospered for it. That changed over the next half-century, however.

State politicians, as early as the turn of the last century, were troubled by the prospect of hydropower in private hands, or "water barons" as some called them. In 1931, after nearly three decades of politicking, the Legislature established a state authority to build a hydropower plant on the St. Lawrence River near Massena, which was built in the mid-1950s.

By then, the power authority, under the control of Moses, had designs for a second, much-larger plant near Niagara Falls.

The stage had been set by a treaty adopted by the United States and Canada in 1950 that allowed for a diversion of a greater portion of the Niagara River's flow to generate up to six times the hydropower of the existing plants. Tucked into the bill was a provision that gave Congress the authority to decide who would use the increased generating capacity.

The Legislature followed up the U.S.- Canada agreement in 1951 by passing a bill that broadened the power authority's jurisdiction to include Niagara, thus setting up a heated debate as to whether private or public interests, be they state or federal, should control power generation along the Niagara River.

While state and federal politicians representing the region were divided over who should build and operate a new hydropower plant, many local government, business and labor interests strongly supported keeping hydropower production in private hands.

Among the chief reasons: Privately owned plants paid property taxes, while power authority facilities were tax-exempt. One study done in the mid-1950s said public ownership would result in a loss of $23 million a year in local, state and federal taxes and fees.

There also was the issue of control: The region's major hydropower plants were owned by local concerns that were perceived as keeping an eye out for community interests.

The debate came to a sudden end in June 1956, when a rock slide sent the Schoellkopf plant crashing into the river. The plant's destruction posed a crisis for industry reliant on its power and provided Moses the opening he needed to press his case for a federal license to build and operate the plant.

The authority cut a deal with Niagara Mohawk, which several years earlier had taken ownership of the Schoellkopf and Adams plants from local interests. The company's license was due to expire in 1971; Moses gave it a contract to receive power for a much longer period of time. He also guaranteed Niagara Mohawk more power than its aged and destroyed plants could potentially generate and a big piece of the business of transmitting electricity generated at the new plant throughout the region and state.

At that point, the power authority and many local officials locked horns over what public power would entail.

The Tuscarora Nation objected to his plans to seize a portion of its reservation through eminent domain and fought all the way to the U.S. Supreme Court.

Many local government officials pressed to put the plant on the tax rolls.

"It is on the question of taxing the power authority that Mr. Moses has invoked the wrath of Niagara-area leaders. Just about every elected official in Niagara County has advocated legislation that makes the authority's holdings taxable, as private utilities are," reported the Niagara Falls Gazette in April 1957.

Moses responded by lambasting the locals for being blind to the "tremendous boom" that the plant would provide the regional economy.

Congress soon gave Moses much of what he wanted. The Niagara Redevelopment Act of 1957 granted the authority a federal license to build and operate the plant. It also dictated how most of its power would be allocated. It was an unusual step for Congress to take.

In fact, only the Niagara plant and one in Washington State are required to abide by allocations set by Congress.

The federal legislation regarding the Niagara plant was a political compromise. Half went to public interests; the other half of the plant's guaranteed capacity was earmarked for private interests.

Construction of the plant began in 1958. It began generating power three years later. Resentment lingered much longer.

"The pace and circumstances of construction created an enduring sense of injustice among some residents of Niagara County," according to a 2001 study commissioned by the power authority done by the Center for Development Analysis.

- James Heaney

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