Power  Authority to Revise Preference Power Rates

Jack Murphy
(914) 390-8198 or

Michael Saltzman

April 29, 2003


NEW YORK—New York Power Authority trustees Tuesday approved revisions in preference power rates that reflect costs associated with major life extension programs and relicensing efforts at the St. Lawrence-Franklin D. Roosevelt and Niagara Power Projects as well as the increased costs of producing electricity. 

Preference electricity is sold at cost-based rates.  It is supplied to the state’s municipal and rural cooperative electric systems, to out of state preference customers under federal law and license requirements, and to three upstate private utilities for resale to their rural and domestic customers without mark-up or profit, and to the Metropolitan Transportation Authority and the Niagara Frontier Transportation Authority. 

The impact of the proposed adjustment will be an increase in the monthly bill for a typical customer of a municipal or rural cooperative electric system of less than 60 cents per month per year of the four year increase.  Typical residential and rural customers of Niagara Mohawk Power Corp., Rochester Gas & Electric Co, and the New York State Gas and Electric Co.—all of whom provide some preference power to their customers—will experience an increase of about 12 cents per month per year on their electric bills.

The trustees, meeting at Power Authority offices here, adopted a five-phase rate adjustment. The first adjustment, a retroactive modification covering Dec. 18, 2001 through April 30, 2003, is expected to produce a refund of approximately $4.5 million.  The next four phases, beginning on May 31 of 2003, 2004, 2005 and 2006 will increase prices from less than eight-tenths of a cent per kilowatt hour (kwh) to about nine-tenths of a cent per kwh when the rate modification plan is fully implemented by May 1, 2007.

The Power Authority, which last reviewed preference power rates at the beginning of 1992, is in the midst of about $500 million worth of renewal and life extension work at the two major hydroelectric projects and also expects to spend almost $200 million through 2006 on relicensing costs for the two projects.  The life extension programs are designed to keep the two power projects running consistently and 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 later this year.  It is in the process of developing a new license application for the Niagara Project where the current license expires in 2007.