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Panel debates changes suggested for allocation of low-cost power

A panel of state legislators studying ways to change the New York Power Authority's low-cost electricity programs got an earful about the importance of hydropower from Western New York businesses during a public hearing Wednesday.

Companies that receive discounted power should not be forgotten if and when changes are made to the criteria used to allocate cheap electricity, several speakers and members of the area's state legislative delegation said during a session in Niagara Falls City Hall.

With the Power Authority's most lucrative operation, the Niagara Power Project, only a few miles away, a series of speakers spoke to the panel and answered questions from lawmakers during the course of the session, which lasted more than three hours.

Elizabeth Lynam, deputy research director of the Citizens Budget Commission, outlined a report issued Wednesday by her group that calls for the elimination of each of the nine existing low-cost power programs run by the Power Authority.

The report, which says the state does not get enough return for the half billion dollars in discounts it provides, calls for a unified program for discounted electricity to be managed by the Empire State Development Corp.

"We're not in a position to spend resources unwisely," Lynam told the panel.

Companies that receive deep subsidies, if they fail to meet a new set of criteria, should have their allocations gradually reduced by 20 percent each year over five years, Lynam said.

"You wouldn't want to be throwing people off a cliff," she said.

Several state lawmakers who sat in on the panel raised concern about what would happen to area companies that receive low-cost power, and have been getting it for decades.

Assemblywoman Francine DelMonte, D-Lewiston, questioned Lynam about the report, saying there can be no substitute for the cheap hydropower some companies receive. DelMonte, who held up a chart to illustrate interdependence between facilities, said many local companies, especially the ones in the Falls, rely on each other for materials and other aspects of their operations. If one company goes under, it would have a greater effect on the area because of the interdependence, she said.

Sen. George D. Maziarz, R-Newfane, said he believes geographic equity among regions in the state should be considered when determining how low-cost electricity is distributed.

Maziarz said there is a "fear factor in Western New York," with residents concerned about the prospect of having the area's resources further taken away.

One of the most pointed exchanges of the day occurred between Asssemblyman Richard L. Brodsky, chairman of the Committee on Corporations, Authorities and Commissions, and Earl Wells, a spokesman for Power for Economic Prosperity, a coalition of local manufacturers who receive low-cost power.

Members of the coalition have been receiving discounted electricity for decades, and some receive some of the largest subsidies per job in the state.

Brodsky told Wells to assume a new set of criteria for allocating cheap electricity was agreed upon by all parties, but that one or two members of the local coalition did not meet the criteria. Would the coalition support taking away those members' power, Brodsky asked.

Wells said no harm should be done to existing recipients.

"Then what's the purpose of standards?" Brodsky replied.

Wells said his group supports a set of standards that extend beyond just the number of jobs involved, but also to capital investment and other indicators of economic impact.

Niagara Falls Mayor Paul A. Dyster stressed the importance of the decisions the panel will make, saying there is "no decision more important" to his city than "how we use renewable hydropower."

Dyster also said the criteria used for making allocations should be constantly reviewed, and any changes should not mean current recipients are "thrown out the door."

Such criteria should include more than just the number of jobs created by a project receiving an allocation of low-cost electricity, Dyster added.

"One of the things that we have available to us that's an asset here is a supply of renewable power," he said. "It's very precious, and we have to use it wisely."

The individuals chosen to appear before the panel were invited to participate by lawmakers.

Two more public hearings have been scheduled across the state: Oct. 15 in Syracuse, and Nov. 18 in Albany. Additional hearings are expected to be announced, said Assemblyman Kevin A. Cahill, chairman of the Energy Committee.

Representatives of the Power Authority were invited to Wednesday's hearing to present an overview of their programs and participate in the discussion. A representative read a letter from authority CEO Richard Kessel, but no other staff attended the session.


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