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Leaders targeting proposed Power Authority rate hikes; Coalition to compile information on impact

Local leaders are planning to mobilize opposition to a proposed electric rate increase by the New York Power Authority.

The Niagara Power Coalition, the group of host communities for the Niagara Power Project, decided at a special meeting Tuesday to compile information on how the proposed increase of 29.5 percent over 3 1/2 years would affect its members.

The impact would not be limited to local governments, though.

Coalition attorney Stanley Widger said the proposed hike in rates for "preference power" customers also would affect the three major private electric utilities in upstate New York: National Grid, New York State Electric & Gas Corp. and Rochester Gas & Electric.

A letter to Niagara County Legislature Chairman William L. Ross from Michael A. Lupo, director of marketing analysis and administration for the Power Authority, said the authority's board of trustees plans to vote at its Oct. 25 meeting.

"I think we should use political power, speak at public hearings," Ross said.

The 2005 Niagara Power Project relicensing agreement requires the authority to make cash payments and provide low-cost electricity to the Power Coalition members for 50 years.

Background material Lupo sent to Ross showed that one of the reasons the authority is using to explain the increase is the $12.7 million annual cost of paying for that agreement.

"That could stick in people's craws," Widger said. He said in effect, the rate hike means the authority is trying to shift that cost to ratepayers.

Another stated reason for the increase is a planned $460 million maintenance package at the Niagara Project, slated to last from 2012 to 2020.

The Power Authority tried to raise rates in 2009 but backed away after what Widger called "very effective political pressure."

Ross and State Sen. George D. Maziarz, R-Newfane, were two of the three speakers at the Power Authority's March 2009 public hearing that led to the increase being shelved.

Donald J. Rappold, assistant superintendent of the Lewiston-Porter Central School District, said the coalition members need solid numbers before complaining about the rate hike.

"It has to be data-driven. We're just talking conceptually, but we have to know the impact on us," Rappold said.

"Kicking and screaming does on occasion work, but if you have the facts to back it up, it works that much better," said Widger, assigned to compile the data with help from Fluent Energy, the coalition's electricity consultant.

The rate hike would take effect Nov. 1 with an increase in unit rates for Power Authority electricity for preference customers from the current $10.71 per megawatt-hour to $11.42.

On May 1, the price would rise again, to $12.16 per megawatt-hour. In May 2013, the rate would increase to $12.98, and in May 2014 to $13.87, which includes a surcharge of up to 50 cents per megawatt-hour.

The authority documents say the surcharge will be imposed if the previous years' increases don't bring in the $25 million the papers say is needed to make up for costs left unpaid when the 2009 rate hike was canceled.

The authority is required by state and federal law to sell electricity to preference customers at the lowest possible rate, but not below cost. The authority report says the rates would make it back to the production cost in 2013.


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