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Cheap power approved for proposed Alita steel pipe factory

The New York Power Authority on Wednesday granted four megawatts of low-cost hydropower to Alita USA Holdings as part of the incentive package for the Dubai-based company to build a new $102 million steel pipe factory in Buffalo.

The allocation of cheap electricity, which had been previously reported, is part of a package of nearly $15 million in incentives that Alita is getting to build a 340,000-square-foot pipe mill on Rittling Boulevard that is expected to employ 172 people after its likely opening in the summer of 2015.

The Power Authority allocation is expected to provide enough cheap electricity to cover about 80 percent of the company’s estimated power consumption once the mill is fully operational. Alita’s contract with the Power Authority will run for seven years.

The planned factory would annually make as much as 150,000 tons of high-grade alloy pipes that are used for well casings in oil and natural gas wells, mainly in the United States.

The incentive package includes $2 million in funding from the Western New York Power Proceeds Allocation Board, which was created last year to fund economic-development projects in the Buffalo Niagara region with proceeds from the sale of unallocated hydropower from the Niagara Power Project.

In addition, the state has offered Alita incentives that include up to $6.4 million in tax credits through the Excelsior Jobs Program.

And the Erie County Industrial Development Agency is expected to approve $6.3 million in property and sales tax breaks for the project, as well as offer Alita a $2 million “forgivable loan” to help pay for site development.