Town residents who have had the luxury of a negotiated power credit for the last two years have opened their mail in recent days to find higher electric bills.
Some residents already had begun receiving the bills before National Grid notified town and village officials last week that there would be a sharp reduction in the discounted rate for electricity in the town.
The one-paragraph memo from National Grid said the discount will fall from 60 percent to 14.5 percent. The information was sent to Mayor Richard F. Soluri and Supervisor Fred M. Newlin II on Sept. 10.
National Grid said the discount would be less because the company had miscalculated future wholesale costs for electricity, so it needs to readjust the discount for the third year of the program.
National Grid Account Executive Timothy Dzimian warned both the mayor and supervisor that they "may receive a large volume of calls from Town of Lewiston residents."
Word of the lower discounts -- which will raise electricity costs for town residents -- surfaced in the waning days of Tuesday's Democratic primary for supervisor, and rekindled the debate over whether the municipalities and school districts that forged a settlement with the Niagara Power Authority over the 2007 relicensing of the Niagara Power Project got a good deal.
About a dozen municipalities and school districts will receive money and discounted electricity over a half-century in exchange for their support of the power plant's new operating license.
Lewiston, home to the Power Project, was among the communities, and was the only municipality that chose to use part of its discounted electricity to lower residential electric rates.
Republicans trying to derail Newlin's re-election bid claim Newlin has been aware of the change in the discount rate for some time, but both the supervisor and the mayor said they received word from National Grid the same day last week.
Meanwhile, State Sen. George D. Maziarz, R-Newfane, repeated his belief that Lewiston got a bad deal with the relicensing.
Maziarz pointed to a 2005 memo from Paul Nolan, a Washington, D.C., energy lawyer who helped Lewiston during the relicensing process. Nolan wrote, "I strongly recommend not signing the agreement."
The senator said Lewiston should have fought for more electricity and a firm discount rate.
"This proves my point it's a lousy agreement," Maziarz said. "Fred negotiated a bad deal. They should have got more power and I was always told [the discount rate] would not fluctuate . . .
"Lewiston is not being treated correctly by the Power Authority."
Nolan told The Buffalo News this week that the memo was privileged and confidential, and should not be used to hurt town officials.
He sent it during negotiations, he said, and afterward the town was able to get more favorable terms.
"Those negotiations were nasty," Nolan said. "[Do they know] what was on the table after [the memo]? It's disingenuous to use this against a public official. Subsequent to that letter, Fred, Dan Kilmer and Jim Langlois got the extra 3 1/2 megawatts [of electricity, enough to power about 3,500 more homes], which no one else did.
"Fred and the other guys stood firm and got the extra power. No one else could have done any better, and they did better than the other entities [in the Niagara Power Coalition]."
Nolan, who regularly negotiates power deals, said fluctuating electrical rates can be a problem and he always suggests municipalities take cash whenever they can -- which Lewiston did.
Newlin said the town receives a total of 6.5 megawatts, which is worth about $2.2 million each year, but varies with rates. In addition, the town receives cash payments of $1.3 million per year, which is divided annually into two payments: $850,000 for capital projects for roads and other improvements, and another $510,000 for parks and recreation. These payments will continue every year for nearly 50 more years.
Nolan said the lower rates in Lewiston are likely a reflection of the economy, which saw a large drop in electricity rates this summer. He said he expects that as the economy recovers the rates will climb, as will the discount.
Meanwhile, in Lewiston, the loss in the power credit is significant.
Resident Gloria Hailey, 71, who shares her home with a disabled son, told The News that she received her bill last week and thought National Grid had made a mistake.
"I budget right to the limit. I don't even have air conditioning," Hailey said. Although she used less electricity, she still saw her bill rise from $68 per month to $90.
"They say they got the best deal in relicensing, but this really annoys me," she said. "I don't want to see my money be blown foolishly, but how can I budget for this?"
Newlin said he, too, is "outraged and angered." At this point, he said, town attorneys have not had a chance to take a look at the numbers and he isn't sure if the lower discount will last the whole year.
He also pointed out that town residents are paying less for electricity than in neighboring communities.
"In the past two years," he said, "20,000 residents have saved $5 million in energy costs and will continue to see savings in their energy bills. When was the last time government gave you a discount like that?"