POWER AUTHORITY CONDUCTS PUBLIC FORUM ON PROPOSED HYDROPOWER RATE INCREASE
POWER AUTHORITY CONDUCTS PUBLIC FORUM ON PROPOSED
HYDROPOWER RATE INCREASE
SYRACUSE, N.Y., April 3 /PRNewswire/ -- New York Power Authority officials said Friday that a proposed rate increase for hydroelectric power provided to residential and farm consumers would leave the rates among the lowest in the country.
"The total bills for customers of municipal and rural cooperative systems would continue to be far below those now paid by the customers of the state's private utilities," said Charles M. Pratt, the Power Authority's senior vice president and general counsel. "And customers of three utilities that receive some of the hydropower also would continue to enjoy substantial savings compared with what their bills would otherwise be."
Pratt spoke at a public forum on the proposed increase at the Hotel Syracuse.
Customers of municipal and rural cooperative systems, who use hydropower to meet most of their electricity needs, now pay an average of about $27 per month for 700 kilowatt hours (kwh) of electricity. Average monthly bills for private utility customers using the same amount of energy range from about $65 to more than $100.
Philip J. Pellegrino, the Power Authority's vice president-power sales and rates, said the proposed increase, to take effect May 1, would be phased in over a four-year period. He said it is needed to enable the Power Authority to recover its costs of producing the power.
Pellegrino said the hydropower now saves residential and farm consumers from $300 million to $350 million a year on their electricity bills.
"In contrast, the proposed rate increase would add about $5 million annually for each year of the four-year phase-in," he said.
Pellegrino explained the details of the proposed increase and told those attending the forum that comments would be considered by Power Authority trustees before final action is taken.
The monthly bill of a typical residential customer served by a municipal or rural cooperative electric system would increase by about 60 cents in each of the four years. Monthly bills for New York State Electric & Gas, Niagara Mohawk, and Rochester Gas and Electric residential customers would increase by 8 cents to 16 cents in each year.
The increase for customers of municipal and rural cooperative systems is greater because they use more hydropower, which accounts for part of the total bill.
The power is produced at the Power Authority's St. Lawrence-Franklin D. Roosevelt Power Project in Massena, N.Y., and its Niagara Power Project near Niagara Falls, N.Y. It is sold to the state's 51 municipal and rural cooperative systems, the three upstate private utilities and municipal distribution agencies, as well as to the Metropolitan Transportation Authority in New York City and the Niagara Frontier Transportation Authority in Buffalo, N.Y. In addition, public agencies in seven neighboring states receive power under federal mandates.
Pellegrino said the proposed phased-in increase is intended to minimize as much as possible the impact on customers. The production cost for the power would go from just over one-half cent per kwh at present to less than eight-tenths of a cent per kwh in 1995.
The residential and farm hydro rates were unchanged from 1958, when the St. Lawrence-FDR Project began operation, until 1983, when the rates were reduced. Another reduction followed in 1986. Despite a five-year phased-in increase that began in 1987, the Power Authority still is not recovering its production costs.
"Since 1958, the rates have actually declined by 75 percent, after adjusting for inflation," Pellegrino said.
In addition to considering comments made at Friday's forum, the trustees will review other public responses before acting on the proposal.
/CONTACT: Jack Murphy of New York Power Authority, 212-468-6319/ CO: New York Power Authority ST: New York IN: UTI SU: SM -- NY045 -- 4854 04/03/92 13:11 EST