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Thread: Power Authority Relicensing

  1. #1
    Member crlachepinochet's Avatar
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    Jul 2004

    Power Authority Relicensing

    I know we don't go for more government around here, but how great would it be if we could actually take control of the Niagara power project? Some people on the MB support government-owned casinos; think of this as a casino without the stupid tax. Right now, the Power Authority is dangling all of this money in front of our faces so that we're awestruck enough to sign off on whatever they put in front of us. Hundreds of millions of dollars generated by the power project every year... either extra money on our rates that didn't need to be charged, or something that should go entirely back to us... parks, schools, gilded streets, etc. Do we really want to hand all of this money over to a statewide agency? Maybe in 50 years our government will have the sense to stand up to state authorities like this one.

    On a semi-related note, here's a bit of anti-city bias in the Snooze: the first article praises the PA like it's the best thing since the Erie Canal, especially talking about all the money that will come back into the area as part of the relicensing deal. The second quote is one of those opinion blurbs that I despise, but look at the fourth paragraph. The city's argument is total BS, but now all of a sudden any more money that gets doled out is coming right out of the rate payers' pockets?

    Since 1961, Western New York has been home to New York State's largest electrical power producer, the Niagara Power Project, which generates hundreds of millions of dollars annually for the State Power Authority.

    The authority wants to keep the electricity and money flowing, so it's closing on deals worth more than $1.5 billion in incentives to secure a federal license to continue to operate the power project for another 50 years.

    The area, from Buffalo to Youngstown, would reap benefits for a half century, according to drafts of the deal obtained by The Buffalo News.

    If approved, the settlement could mean millions of dollars in cash to Erie and Niagara county communities. Several local governments, school districts and the Tuscarora Nation would be among the winners.

    Cut-rate electricity would go to many Niagara County homes and businesses.

    Osprey nesting sites would rise along the Buffalo shoreline.

    Projects to spur development, boost wildlife and link communities would take hold up and down Niagara River.

    They would likely include about $9 million annually to help create a Niagara River Greenway between Lakes Erie and Ontario.

    The deal, if it stands, compares well with other such relicensing settlements, in both scope and size, said Bruce Carpenter, executive director of New York Rivers United, a nonprofit environmental group.

    "It's forward-looking," said Carpenter, whose group has monitored every hydropower relicensing in the state. "It's something our children and grandchildren can look at and say, 'They did something right.' "

    In a time where money for ecological projects is increasingly hard to come by, the proposed settlement could become a reliable source of much-needed financial support, said Carpenter.

    "We identified problems and started working on them," he said. "It doesn't solve all of them, but you can't solve all these problems in one bite."

    Deep pockets

    The Power Authority has the deep pockets to make lucrative offers to renew its power project license.

    It reported operating revenues of $2.3 billion in 2003 alone.

    The 2,400 megawatts produced by the Niagara Power Project makes up nearly a quarter of the Power Authority's total electrical production capability. The project can churn enough electricity to meet about one-quarter of the needs of New York City on a busy summer day, or about 11 percent of the state's entire power use on a midweek winter afternoon.

    At present, only two of the nine proposed settlements -- for Niagara County communities and the Tuscarora Nation -- have had terms publicly discussed. None of the settlement packages are locked in until federal authorities approve the new license in 2007.

    Power Authority spokesman Jack Kelly declined to comment.

    Here are the highlights from the most substantial proposed settlements and requests for compensation:

    The Niagara Power Coalition -- Niagara County, the City of Niagara Falls, Lewiston, the Town of Niagara and the school districts of Lewiston-Porter, Niagara Falls and Niagara-Wheatfield -- has publicly accepted its deal, though Lewiston officials have expressed some second thoughts.

    Lewiston Supervisor Fred Newlin said he was trying to get a better share of low-cost power for his town, which has the power plant inside its borders. An independent energy audit is under way to help determine a fair split, and should be ready in another couple of weeks, Newlin said.

    Three-part deal

    The Power Authority says the coalition's package could be worth more than $1 billion over its lifetime. It's a three-part deal: land, money and low-cost electricity. About 104 acres, mostly in Lewiston and Niagara Falls, could be turned over to governments or neighbors.

    Coalition members get up to 25 megawatts of low-cost electricity, enough to trim millions of dollars from their annual electric bills. One megawatt is roughly enough to power about 1,500 average homes in New York State.

    They'll also split at least $5.5 million annually for 50 years from the sale of electricity sold on their behalf.

    The Tuscarora Nation, with about 1,200 members, had about 10 percent of its land seized by the state to build the power project's reservoir. It also lost a bitter court battle over the state's actions.

    The nation was impacted by the project in ways other communities were not, said Neil Patterson, Tuscarora environmental director. "The reason is we have a much closer connection to the land, a much closer reliance in many cases on environmental resources," he said. "When you take environmental resources away from people who depend on them, it has a much larger cumulative effect within their society."

    The proposed Tuscarora settlement, aired earlier this month in a reservation meeting, includes $20 million for the nation, Patterson said. Unlike the installment-payment deals for the Niagara Power Coalition, the Tuscarora Nation can request a lump sum, he said.

    Low-cost power for every home and business on the reservation today will be part of the agreement, increasing to allow for "reasonable growth" during the next 50 years.

    The nation also got something worth more than money, Patterson said: it got respect due a sovereign people. The nation got a guaranteed role in shaping land policy along the Niagara River watershed, including culturally sensitive sites. It will also get "some sort of official apology" for the way the Tuscarora Nation was treated in the past, so a new relationship can begin, Patterson said.

    The ecological settlement addresses impacts on the plants, animals and water quality of the Niagara River and nearby areas. One proposed version lists about $79 million in spending over 50 years, including habitat improvement projects, improved access to fishing areas, and $1 million annually for improving fish and wildlife habitats.

    Wetlands would be restored on Strawberry and Beaver islands. Invasive species would be dealt with in Tifft Marsh in Lackawanna and Buckhorn Marsh on Grand Island.

    Platforms would be built to encourage ospreys, black terns and common terns to take up residence in Lake Erie and along the river. Structures to attract fish would be placed in the Niagara River.

    Frog Island, a low island that was once in the Niagara River south of Grand Island, and Niagara Falls' Cayuga Creek would be restored.

    Ice boom an issue

    Another set of projects would improve access to fishing areas. The Robert Moses Fishing Pier, near the generating plant on the Niagara River, would gain parking spots. An Upper Mountain Road parking lot, by the northwest shore of Lewiston Reservoir, would have 16 parking spaces. A fence would allow angler access to the upper Niagara River near the Power Project's water intakes.

    City of Buffalo and Erie County officials are still negotiating with the Power Authority. A central issue is what impact the Power Authority's ice boom has on the environment.

    City attorney Richard Stanton said he couldn't comment on negotiations. He outlined the city's initial request: money for waterfront repairs and inner harbor development; $30 million over 50 years for other waterfront development; and either low-cost electricity or money for a clean renewable energy generation site.

    One of the biggest potential impacts on Western New York would come through funding for the Niagara River Greenway, which is envisioned as a system of parks, trails and waterfront sites from Buffalo to Youngstown.

    A recent draft had the annual NYPA support at $9 million to $10 million a year, for 50 years.

    The only relicensed state power project comparable to Niagara is the St. Lawrence-Franklin D. Roosevelt Power Project in Massena, which has about 38 percent of Niagara's generating capacity.

    There, the authority agreed to pay $201 million over 50 years including $115 million to local governments that complained about lost property tax revenue; $66 million for fish and wildlife habitat improvements; and $20 million to enhance area parks.

    Most seem satisfied

    Except for Erie County, Niagara University and the Town of Lewiston, most parties seem largely satisfied with the outlined settlements, Carpenter said. Most people and groups involved are interested in the proposals being made final, he said.

    Since a series of settlement meetings originally scheduled for the last month have been canceled by the authority, Carpenter said, he's not alone in hoping the process moves forward soon. It has taken several years worth of work, by the authority and impacted groups, to get this far.

    "It is not a good thing to leave it sitting out there. People want this over with and done," Carpenter said. "The longer it floats around, who knows what might happen?"
    City Hall is pushing the argument that the ice boom has major impacts on weather and tourism, and, as a result, the New York State Power Authority ought to increase its compensation offer to Buffalo and Erie County as part of the agency's relicensing. Clearly, Buffalo needs every nickel it can get, but piling on costs that will only serve to lessen the advantage of cheap hydropower for all of Western New York is shortsighted. Worse, the justification for increased compensation is based on ice-boom claims that melt under serious scrutiny.
    A comparison of pre-boom and post-boom weather done years ago by the National Weather Service here, and reviewed just last year by Buffalo State College researchers, quantifies the minute difference in climate based on lake temperatures rather than air temperatures at the inland airport weather station.

    For 38 years, from 1929 until the boom first was installed in the 1960s, the average date for Lake Erie "ice-out" - when the ice dam caused by the boom begins to break up and melt - was April 19. For the years since, the average ice-out date is April 18. "From that, you could say the ice boom is helping us, but in reality it's not statistically important," said the National Weather Service's Tom Niziol.

    Other studies have attempted to quantify how much colder the region is because of the boom - a system of steel cylinders strung across Lake Erie that prevents ice damage to the authority's power intakes. According to one study, the boom's impact is about 16 days a year when temperatures are a degree colder. In general, previous climatic studies call for more research - something that would be interesting but costly, and probably pointless. Given the huge range of natural variables in weather, there can be no definitive findings.

    In the meantime, there are agricultural interests - primarily wineries - that say the boom is a help because it actually delays crop germination until the danger of a frost has passed. And there are manufacturing groups that warn that the money being sought from the Power Authority ultimately doesn't come from the agency, it comes from rate payers, primarily manufacturers who fear even a small increase will make them less competitive in efforts to keep industries and jobs here.

    The Power Authority's compensation proposal is much smaller for Buffalo and Erie County than for Niagara County, which is, after all, home to the Niagara Power Project, and thus foregoes property tax revenues. Niagara County would get $22 million per year over 50 years compared to the $2 million per year for Buffalo and Erie County. That annual $2 million payment is focused on development aid for a shoreline Greenway that would rival Canada's greenbelt Niagara Parkway along the river from lake to lake, and that in itself is a very good idea.

    Buffalo would do far better to push for compensation from a related hydropower issue. The allotment of cheap electricity, called replacement power, is up for renewal this year by the State Legislature. But unclaimed portions of that power could be "monetized" - the unclaimed local power sold on the open market, until it's needed by industry, with the proceeds used for local needs. That could provide a valuable pool of cash, which could go toward local uses ranging from cultural institutions to economic development.

    But the ice boom argument? It just doesn't look like it holds much water.
    Remain calm!! But run for your lives if necessary!

  2. #2
    Tony Fracasso - Admin
    Join Date
    May 2003
    Buffalo, New York, United States
    IT's a tough call for the power authority. If goverment controled I can see that becoming a patronage center galore. If it's privately owned without restrictions then you have a cashcow and they can milk the public dry.

    NYS needs revamping in a big way. It's say that we are so close to the cheapest/cleanest power generator in the USA and pay the most in electricity cost.

    We need the acme power cube. Pour water in, get power out One per home

  3. #3
    Member Curmudgeon's Avatar
    Join Date
    Jul 2003
    I know we don't go for more government around here, but how great would it be if we could actually take control of the Niagara power project?
    Bad news: the power authority dams were paid for by the taxpayers of the state of New York and the United States. They invested and deserve to reap the benefits of that investment just as much as you or I.

    WNY could have scraped up the financing for the project, and had we done so, we could have kept all the power. We didn't. The dam power belongs to the investors.
    Data is not the plural of Anecdote.

  4. #4
    Join Date
    Feb 2005

    I hate to break it to you, but we have taken control of the Power Project. The Power Authority is a public entity, created by us, through our representatives in Albany.

    WNY resident: any utility could gouge the rate payers. That's what the Public Service Commission is all about.

    With the Power Authority, though, there is no independent, adversarial review of their actions.

    Have the citizens benefited from having public ownership of electricity generation?

    Only Hawaii has higher electricity rates than Western New York.

    You decide.
    Truth springs from argument among friends.

  5. #5
    Member crlachepinochet's Avatar
    Join Date
    Jul 2004
    So taking control is handing over local resources to an unassailable state agency?

  6. #6
    Join Date
    Feb 2005
    "taking control" is in the eyes of the beholder.

    Say "the government" is a mirage.

    In case you haven't noticed, no one is in control of Erie County.

    At least with private utilities, what they are doing is transparent.

    "Compared to what?" (I'll help you out.)

    Compared to the Power Auithority. When was the last quarterly earnings annoucement from them? Who regulates them?

    Sorry to get started on this, but lowering the common denominator to a more local level won't make things better.

    We the people control power from Niagara Falls and we're screwing ourselves. We can't even produce cheap power.
    Truth springs from argument among friends.

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