The head of the New York Power Authority proposed a new format for an aid package to Niagara County on Tuesday -- one that would cost the Power Authority no additional money but could leave the county with borrowing costs.
Richard M. Kessel, president and chief executive officer of the authority, speaking to reporters after the authority's board of trustees met at the Niagara Power Project, suggested speeding up the payments the authority is committed to make to the county under the plant's 2007 license -- $20 million a year for 50 years.
"The Niagara Initiative will be funded from funds set aside for Niagara County," Kessel said. "We would allow them to compress that money so they'd get it sooner."
Kessel suggested "securitizing" the payments, which means the county would issue bonds to obtain the money from investors who would buy the bonds, using the Power Authority's annual payments as security for the investment.
Kessel's suggestion came as a surprise both to County Legislature Chairman William L. Ross and State Sen. George D. Maziarz.
"That's paying us money we're already going to get. That's not giving us any more," said Maziarz, R-Newfane, chairman of the Senate Energy Committee.
"It hasn't even been discussed at the county," said Ross, C-Wheatfield. "They'd have to explain it to me. I'd like the initial explanation and then have them come to the [Legislature's] Economic Development Committee and make the presentation."
While Ross and several municipal leaders have been hoping for cash grants from the Power Authority for various construction projects, Kessel said, "We're not just going to give out cash."
Kessel first publicly mentioned an aid package for Niagara County in 2009. In July 2010, Ross said he wanted $250 million: $75 million for the county government and $175 million spread among cities and towns.
Maziarz said Tuesday he'd prefer not money, but extra grants of hydroelectric power to the county, which it could use for business development.
Niagara County, using 1.3 megawatts from the Power Project relicensing deal, created a program called Empower Niagara, which distributed the electricity to seven businesses before the supply was exhausted last year.
The county said the power created $18 million in business investment and created or retained 670 jobs.
The notion of taking a lump sum instead of annual payments on a major revenue source isn't a new one for Niagara County.
Niagara and several other New York counties used a similar tactic about a decade ago to speed up the receipt of their shares of the damages paid by major tobacco companies in a lawsuit jointly won by several states in 1998.
In Niagara County's case, it was supposed to receive $4 million a year for 26 years but chose instead to form a special corporation to issue bonds backed by those payments to obtain a lump sum.