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NEW YORK POWER AUTHORITY TO ROLL-BACK ELECTRIC RATES

 NEW YORK, Oct. 26 /PRNewswire/ -- New York Power Authority Chairman Richard M. Flynn said today that the Power Authority will roll-back electric rates and freeze them through at least the end of 1996 for its government customers in New York City and Westchester County, saving the customers approximately $110 million in that period.
 "We're able to do this because of the aggressive actions we've taken in the past year to cut costs throughout the Power Authority and to revamp our nuclear management and operations," Flynn said.
 Gov. Mario M. Cuomo termed the rate freeze "another example of how the state is helping local governments and the taxpayers who support them.
 "This rate initiative will benefit every local taxpayer in New York City and most Westchester communities and school districts, as well as anyone who rides the subway and commuter trains," Gov. Cuomo said. "The Power Authority, under Chairman Flynn's leadership, continues to benefit the people of New York State."
 Flynn said the Power Authority will forgo annual rate increases of $35 million and $10 million that had been planned for April 1994 and January 1996, respectively. This will save the public customers, including the New York City government, the Metropolitan Transportation Authority (MTA) and most Westchester municipalities, about $95 million through the freeze period.
 In addition, he said, the customers will no longer be billed for electricity purchased by the Power Authority to replace the output of its Indian Point 3 Nuclear Power Plant, which has been out of service since last February and will remain closed until various repairs and maintenance tasks are completed. Elimination of this charge will save them about $15 million.
 Flynn's comments came after Power Authority trustees, meeting here, approved the new rate plan for electricity used by nearly 80 public entities for city halls, schools, hospitals, street lights, subway and commuter trains and other public purposes.
 "These customers, and the area's taxpayers and mass transit users, have saved about $2 billion through use of Power Authority electricity since the fall of 1976," Flynn said. "Our current rates, including delivery charges, are 13 to 18 percent below Con Edison's, with annual savings of about $100 million.
 "But the government entities face severe budgetary pressures, and we have to meet growing competition from new power sources if we intend to keep them as customers. The rate freeze responds to these realities and will add to the savings they already receive."
 Mayor David N. Dinkins said, "I am very pleased by the Power Authority's action today, which will save the City of New York some $42 million in electricity costs over the next three years. This freeze represents a huge step toward ensuring budget stability in a critical area of city expenditure. We look forward to continuing to work with the Power Authority to improve energy efficiency and reduce costs." The city also will save about $9 million a year under the Power Authority's High Efficiency Lighting Program (HELP).
 Westchester County Executive Andrew P. O'Rourke said the rate freeze would save county government and about 70 Westchester municipalities and government agencies about $6 million. "We're delighted that the Power Authority has been able to cut its own costs in a way that results in savings for us," said O'Rourke.
 Peter E. Stangl, chairman and chief executive officer of the MTA, said, "The Power Authority has been working with us in a cooperative manner over the last few months to minimize the impact of the downtime of the Indian Point plant on our system and our nearly six million daily customers. The fact that the Power Authority has made a commitment that our rates will not increase for the next three years will allow us to rationally budget our power costs through 1996." The MTA will save about $37 million under the rate plan.
 Flynn said the Power Authority has cut its annual operating budget by about $40 million, chiefly by reducing its work force by the equivalent of 400 full-time positions. He also noted that the Power Authority in August refinanced more than $1.1 billion in debt at the lowest true interest cost for a large public power bond issue since 1977, saving $370 million in debt payments.
 In addition, Flynn said the Power Authority has substantially reorganized its top management at Indian Point 3 and is implementing a major improvement program, actions that are expected to increase the plant's reliability and reduce costs.
 Indian Point 3, in Buchanan, Westchester County, and the Charles Poletti natural gas- and oil-fueled plant in Queens are the main power sources for the government customers. Since removing Indian Point 3 from service on Feb. 27, the Power Authority has passed on the costs of substitute power to the customers.
 Flynn noted that these charges, which have totaled as much as $9 million a month, have recently dropped to about $3 million.
 "Now," he said, "as far as the customers are concerned, the charges will be eliminated."
 The overall plan includes freezing base rates, which have been unchanged since February 1990, at current levels and setting an additional bill component known as the "energy charge adjustment" (ECA) at zero. The ECA, which includes charges for purchased power, fuel and other costs not reflected in the base rates, normally is either positive or negative in a given month.
 Under the new approach, actual ECA charges above zero will be deferred. Credits from months when the ECA is less than zero will go toward reducing the deferred amount.
 A key element will be use of about $30 million of a "pre-payment" balance accumulated since 1976 through customers' payment of estimated bills at the start of each month. The Power Authority will apply these funds, which it has used for working capital and protection against late bill payments, to offset deferred ECA charges. Beginning in 1994, it also will use the pre-payment funds to help pay off charges for HELP and other energy conservation programs that are not already collected in base rates.
 -0- 10/26/93
 /CONTACT: Stephen Shoenholz of New York Power Authority, 212-468-6313/


CO: New York Power Authority ST: New York IN: UTI SU:

PS -- NY049 -- 6878 10/26/93 11:57 EDT
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Date:Oct 26, 1993
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