As at St. Lawrence, a variety of interests vied for the rights to large-scale hydroelectric development in the early 1950s. On June 7, 1956, the dispute came to a sudden and dramatic end when a rockslide destroyed the area's largest privately owned hydroelectric plant, severely limiting the availability of low-cost power in the region. The time for debate was over. With tens of thousands of industrial jobs endangered, Congress passed the Niagara Redevelopment Act in 1957, paving the way for the Power Authority to obtain a license and begin construction by March 1958.
The 2,400,000-kw Niagara Power Project was the largest hydropower complex in the Western World when it began operating in January 1961, less than three years after construction began. President John F. Kennedy, who joined three former presidents: Dwight D. Eisenhower, Harry S. Truman and Herbert Hoover in sending congratulations, called the Niagara project "an outstanding engineering achievement" and an "example to the world of North American efficiency and determination."
Low-cost power from the two giant hydroelectric projects flowed to upstate consumers and to factories providing thousands of jobs. But with most of New York's hydroelectric potential already developed, attention shifted to new sources of energy to meet increasing needs. In this climate, the Power Authority's "second generation" of power projects emerged.
In 1967, Governor Nelson A. Rockefeller organized a blue-ribbon panel to study the state's power needs and the most economical ways of meeting them. The committee recommended, among other things, that the Power Authority be permitted to build nuclear and pumped storage hydroelectric plants. A bipartisan bill providing such authorization passed both houses of the Legislature in early 1968. Rockefeller, in signing the measure, said it created "a unique partnership between government and private industry in meeting the future power needs of the state."
In 1969, construction began on the Blenheim-Gilboa Pumped Storage Power Project (1,040,000 kw), in the Catskill Mountains, and the James A. FitzPatrick Nuclear Power Plant (820,000 kw), named after the Power Authority's chairman at the time and located on the shores of Lake Ontario, near Oswego. The Blenheim-Gilboa project began operation in 1973; the FitzPatrick plant generated its first electricity two years later.
Meanwhile, still other new assignments were transforming the Power Authority into a truly statewide utility.
In 1972, Governor Rockefeller and the Legislature responded to an emerging energy shortfall by giving NYPA the go-ahead to build generating plants to power downstate subways and commuter trains. Then came the 1973 Mideast oil embargo and a four-fold increase in oil prices. To help Con Edison, the New York metropolitan area's primary utility, weather the resulting financial crisis, Governor Malcolm Wilson and the Legislature in 1974 directed the Power Authority to buy, complete and operate two power plants the private utility was building. The arrangement called for the Power Authority to sell most of the plants' output to government agencies in New York City and Westchester County.
One of the plants, the Indian Point 3 Nuclear Power Plant (970,000 kw), on the Hudson River in northern Westchester, began operation in 1976. The other facility, located in Queens, was the oil-fired Astoria 6, which began operation in 1977. It was later converted to also burn natural gas and renamed the Charles Poletti Power Project (825,000 kw) for the only person to serve both as governor of New York and a Power Authority trustee.