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Decline in electricity use cuts discount for residents

The demand for electricity has fallen further this year than expected, because of the worst economic recession in decades, a cooler than usual summer and an increase in the availability of wind power, the Town Board learned Monday night.

That might be good news for those paying electrical bills in most parts the state, but not necessarily in this town, where residents were told earlier this month that the discounts in their power rates will be less generous.

John Dax -- the Town Board's Albany attorney who handles negotiations, audits and issues involving National Grid issues and the State Power Authority -- described the recent drop in the resident discount, which fell to 14.5 percent on the most recent bill from 60 percent on previous bills.

Dax said the State Power Authority sells Lewiston's annual 6.5 megawatts of energy on the wholesale market while National Grid credits Lewiston's account with its estimate of how much the electricity sale will bring in.

The utility forecast $2.3 million in 2007-08 and $2.34 million in 2008-09, but the electricity fetched only $1.6 million.

That lowered the discount.

The town can "capture" the power without losing it into the grid only by converting it into cash, Dax said, explaining, "That's the linchpin of this [discount] deal."

Months ago, National Grid forecast that the electrical rate for this month would be 6.5 cents per kilowatt, but it only turned out to be 3.6 cents.

"That's what killed the discount," Dax said. He added that people should note that their electricity rates also are down, though the discounts are less.

Dax and Supervisor Fred M. Newlin II suggested that National Grid could "smooth out peaks and valleys" of future discounts by checking the rate forecasts quarterly.

Sixty percent was an "enormous" discount, Newlin said. "We always expected 15 [percent] to 25 percent discounts," he said. "There are swings, but they were hesitant to tell us."

Both Dax and Newlin said National Grid probably knew the forecast numbers last month and should have made them available to the board well before this month's bills went out.

"The day I called you," Newlin told Dax, "on Sept. 10, I had no prior notice. The [village] mayor will say the same thing. I'm angry. We are all supposed to be partners."

Dax told the board that after auditing the numbers, he found that the town will get some more money back.

In addition to the $634,000 discount, Dax said National Grid still owes the town $212,000 because of errors over the past two years, which will raise this year's final discount to $900,000.

"I'm just beginning," Dax said. "The devil's in the details."

e-mail: nfischer@buffnews.com

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