Power Authority Schedules a Forum

Michael Saltzman

January  31, 2003


ALBANY—New York Power Authority (NYPA) will conduct a public forum March 18 on proposed revisions in preference power rates. Preference power is hydroelectricity sold without markup to the 51 municipal and rural cooperative electric systems in New York State, rural and domestic customers of the Niagara Mohawk Power Corp., Rochester Gas & Electric Co. and New York State Electric and Gas Corp., and to neighboring states under the provisions of federal law. Proposed revisions in the rates are the first in a decade and would reflect costs associated with major life extension programs and relicensing efforts at the Power Authority’s two major hydroelectric power projects as well as the increased costs of producing electricity.

The forum will be held at the Oncenter, 800 South State St. in Syracuse on Tuesday, March 18. There will be an afternoon session from 1 p.m. to 4 p.m., and an evening session beginning at 7 p.m. and running until all who wish to speak are heard.

The Power Authority, which last adjusted the preference power rates at the beginning of 1992, is engaged in $500 million worth of renewal and life extension work at its major hydroelectric projects, the St. Lawrence-Franklin  D. Roosevelt Power Project and the Niagara Power Project. The life extension programs are designed to assure the continued reliability of the hydroelectric projects and keep them running efficiently well into the future. The Power Authority has already requested a new federal license for St. Lawrence-FDR to replace the current license which expires in October 2003. It is in the process of developing a new license application for the Niagara Project where the current license expires in 2007.

The rate adjustments will reflect results of a cost-of-service study that, among other factors, includes changes in operating and maintenance costs since the 1992 adjustment.

Based on the results of the cost-of-service study, the proposed rate revisions include a refund of $4.4 million to preference power customers for the period Dec. 18, 2001 though April 30, 2003.  A new four-year rate plan is proposed to begin May 1, 2003.

Under the proposed new rate plan, typical residential customers of the three upstate utilities that provide the hydroelectric power as a portion of the electricity supplied to their customers would experience an increase of about 50 cents per month in their electric bills by 2007 if the rate proposal is fully implemented. Typical residential customers of municipal or rural cooperative electric systems that receive all or most of their electricity supply from the hydroelectric projects would experience an increase of about $2.50 cents per month by 2007 if the rate proposal is fully implemented.

Upon full implementation by May 1, 2007, the cost of preference power energy would remain less than 1 cent per kilowatt hour, among the lowest rates for wholesale electricity in the nation. According to the United States Energy Information Administration, the average wholesale price of electricity in the nation was 5.2 cents per kilowatt hour in mid-January, 2003.

The public forum is designed to solicit comments from members of the public about the proposal. Those comments will be considered by the Power Authority trustees before they take any final action on a rate adjustment.