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GOVERNOR ANNOUNCES AGREEMENT ON RELICENSING OF NIAGARA POWER PROJECT

Settlement Will Maintain Low-Cost Power for Industry in Region, Provide Approximately $280 Million Over 50 Years for Waterfront Redevelopment

Governor George E. Pataki today announced that the New York Power Authority (NYPA), the City of Buffalo and Erie County have reached an agreement on the relicensing of the Niagara Power Project in western New York. Under this settlement, NYPA would provide an estimated $280 million in funding for vital economic and environmental projects in the region over the term of the 50-year license, while also ensuring low-cost power for businesses in western New York.

Erie County Executive Joel A. Giambra and Buffalo Mayor Anthony M. Masiello have agreed to the settlement, which also requires approval of the Buffalo City Council and Erie County Legislature. The agreement is conditional upon the approval of NYPA's application by the federal government.

"When the Niagara Power Project first began operating in 1961, it was an historic and innovative achievement that offered significant benefits to the citizens and industries of western New York," Governor Pataki said. "Now, nearly five decades later, all the parties involved have reached a positive settlement that will keep this landmark project operational, help to spur new jobs and businesses in the region, and improve the local quality of life.

"I am pleased that under this agreement, businesses in western New York will continue to receive the critical, low-cost hydroelectric power they need to be competitive, and local communities will be given the funding they need to reclaim and revitalize the local waterfront," the Governor said. "I congratulate all the parties who worked tirelessly to reach this settlement, which at times was contentious, but in the end is clearly productive for the people of Erie and Niagara counties. We look forward to working closely with these partners as we continue our efforts to generate economic opportunities and create new jobs across western New York and throughout the Empire State."

Under the agreement, Buffalo and Erie County would receive a combined $5.5 million per year for the next 50 years, pending federal approval of the new license application. agreement includes:

$3.5 million annually over the term of the license for the newly-created Erie Canal Harbor Development Corp. for capital construction, and waterfront redevelopment and revitalization ($2.5 million from NYPA and $1 million from Empire State Development Corp.);
$2 million per year throughout the term of the license for the Erie County Greenway Fund to help protect and restore the canal, and establish a regional approach to land-use planning, tourism, and recreational trail development;
$4 million upfront to the Erie Canal Harbor Development Corp. to be paid in 2006 and 2007; and
The transfer of approximately 14 acres of waterfront property currently used by NYPA to store its ice boom. The transfer will be made once NYPA finds an alternative location.
NYPA Chairman Joseph J. Seymour said, "With Governor Pataki's leadership, we have achieved an agreement with Buffalo and Erie County that will provide New York State a long-term role in helping to develop the Buffalo waterfront, enhance the environmental and recreational greenway along the Niagara River and allow NYPA to continue to provide low-cost hydropower to keep and create jobs in Western New York."

NYPA Chief Operating Officer Timothy S. Carey said, "This well-balanced agreement with Buffalo and Erie County demonstrates a fundamental principal of New York State policy under the leadership of Governor Pataki; that government is most successful when it finds harmony in economic and environmental objectives."

Under a previously announced settlement with Niagara County, the Niagara Power Coalition will receive $5 million per year for 50 years for a host community fund; an $8 million one-time, upfront payment to the community fund; $3 million per year for the Niagara County Greenway Fund; and a 25 megawatt (MW) power allocation.

In August 2005, NYPA submitted an Application for a New License to the Federal Energy Regulatory Commission, as required by law, for a new 50-year license to operate the Niagara Power Project. NYPA's current license expires in August 2007.
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