POWER AUTHORITY HOLDS FORUM ON REPLACEMENT POWER RATES
POWER AUTHORITY HOLDS FORUM ON REPLACEMENT POWER RATES NIAGARA FALLS, N.Y., Nov. 12 /PRNewswire/ -- New York Power
Authority Chairman Richard M. Flynn said Tuesday he was still hopeful negotiations with Niagara Frontier industries would resolve a dispute over electricity rates. But he warned that the industries would have to be more forthcoming with information on how the rates impacted their businesses.
"Two years ago, when we first proposed a replacement power rate increase phased over seven years, there were sharp objections from the industries," said Flynn. "We listened and we responded. We adopted new rates for only the first two years and deferred action on the rates to take effect subsequent to 1991. We asked the industries to talk to us, to show us how the increases would affect their businesses. To this day, they have provided no meaningful information." Speaking at a public forum at the Earl W. Brydges Library here, Flynn said the rates for replacement power, which were unchanged from 1961 until 1990, would remain among the lowest in the country even if the entire rate proposal is implemented. Replacement power is a block of 445,000 kilowatts of hydroelectric power produced at the Power Authority's Niagara Power Project in Lewiston. It was reserved for Western New York industries served by two Niagara Mohawk Power Corp. plants before construction of the Niagara Project. The forum was held to receive public comment on a proposed two-step rate increase. If approved, the delivered cost of the power for a typical customer would increase from the current nine-tenths of a cent per kilowatt hour (kwh) to just over one cent per kwh in 1992 and less than 1.2 cents per kwh in 1993. Flynn noted that "the 'real' cost of the power has declined by more than 60 percent since 1961 because of inflation. "We're still not recovering our production costs. With the current proposed increase, we'll remain below those costs in 1992 and draw about even in 1993." He said the delivered cost of replacement power, which was about half Niagara Mohawk's industrial rate in 1961, is now less than one-seventh the utility's charge. In reviewing the Power Authority's long-time commitment to Western New York, Flynn cited successful efforts in his administration to keep low-cost hydropower for industries and residents and initiatives such as the $5 million loan fund he established to help businesses locate and expand in Niagara County. He said about 42,000 jobs in the region depend on Power Authority electricity. Flynn said that while his "Power for Jobs" program was producing significant commitments to building and retaining employment, replacement power recipients had a shrinking work force. "Replacement power industries are saving about $170 million a year," he said. "They should be giving something back in terms of jobs and investment." "In 1961, the original replacement power industries provided about 35,000 jobs," Flynn said. "Today, companies receiving replacement power employ about 19,000 workers. And that drop has occurred despite our success in getting sizable job commitments from new companies for recent allocations." Under "Power for Jobs," a company agrees to create or maintain a specified number of jobs in return for allocations of low-cost power. Flynn said allocations under the program since 1986 have brought a tripling of the number of jobs for each megawatt of Niagara power allocated to industries. "We want to stand behind our long-time customers," he said. "But we can't ignore the fact that we can do much better on jobs and investment when we reallocate the power to new companies. So, at the very least, we think it's fair to ask the companies receiving replacement power to take a long, hard look at what's just and fair in these rate discussions." Power Authority Trustee Rolland E. Kidder of Jamestown said the Western New York industries would continue to enjoy exceptionally low power costs under the proposed rates. Robert A. Hiney, the Power Authority's executive vice president marketing and development, provided technical information on the rate proposal. Other speakers at the forum included State Sen. John B. Daly, representatives of the industries that receive replacement power and business and labor officials. -0- 11/12/91 /CONTACT: Jack Murphy of the New York Power Authority, 212-468-6319/ CO: New York Power Authority ST: New York IN: UTI SU: SB -- NY078 -- 3585 11/12/91 15:55 EST
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|Date:||Nov 12, 1991|
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