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NYPA Chairman Expresses Support for Legislation That Factors In Costs in Licensing Hydropower Projects

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Text of Chairman Ciminelli's remarks

July 29, 2003

FOR IMMEDIATE RELEASE                                       

BUFFALO—New York Power Authority (NYPA) Chairman Louis P. Ciminelli Tuesday stressed the importance of a balanced approach to the relicensing of hydropower projects like the Power Authority’s Niagara Power Project, as Congress works on energy legislation that includes attention to conditions of hydro licenses.

“Niagara hydropower is absolutely critical to strengthening the economy on the Niagara Frontier and setting the stage for future growth,” said Chairman Ciminelli. “Our ability to use the power for these purposes will depend in large part on what happens in the relicensing process that’s now well under way” for the project. It’s a process, he said, that could be affected by the legislation now being considered in Washington.

The NYPA chairman said he was encouraged by the recent approval by the House of an energy bill that includes a provision requiring federal agencies to consider cost when proposing conditions to hydro licenses. It also would allow hydropower licensees to turn to more cost-effective, alternative conditions for providing equal environmental protection.

The same provision is in a pending bill before the Senate, though there have been efforts to weaken it, “so we’re by no means home free,” he said.

A resident of Buffalo, Ciminelli delivered the welcome remarks at the Waterpower XIII conference at the Buffalo Convention Center. The three-day conference is a biennial gathering of professionals in the hydropower field. The Power Authority is a sponsor of this year’s event, which included a tour on Monday of the Niagara Project and its Power Vista visitors center.

“The Authority takes very seriously its commitments to the communities and the environment” in the areas of its power projects, said Ciminelli. “But the only way to pay for these commitments is through our rates. Ultimately, the issue isn’t what the Power Authority is willing to spend on a proposed project or projects. It’s what our customers are willing to accept by way of potential rate increases.”

Only recently, NYPA completed a series of public scoping meetings to identify major issues for study and potential settlement for relicensing of the 2,400,000-kilowatt Niagara Project. The work is expected to lead to submittal of a license application and environmental assessment to the Federal Energy Regulatory Commission (FERC) in 2005, with the current project license expiring in 2007.

The scoping meetings were part of an alternative licensing approach involving public participation in the relicensing process from the beginning, as opposed to a traditional method that limits it until later in the process. The Power Authority received FERC’s permission last year to use the alternative approach, which is similar to one it employed for another large hydroelectric facility—the St. Lawrence-Franklin D. Roosevelt Project in Massena. The commission is expected to issue a new license later this year for the St. Lawrence-FDR facility.

Completed in 1961, the Niagara Project, about 4-1/2 miles downstream from Niagara Falls, is the single largest source of electricity in New York State and a bulwark for Western New York industries, with more than 43,000 jobs linked to its low-cost power. Together with St. Lawrence-FDR, the two projects meet about 15 percent of New York State’s electricity.

NYPA also operates a 1,040,000-kw pumped storage project in the Northern Catskills that recycles water between two reservoirs to produce power during periods of peak demand, and five small hydro projects in various parts of the state. Overall, hydropower accounts for more than 80 percent of the Authority’s installed capacity.

“I’m proud to say that these projects not only protect the environment—by producing clean, renewable energy without the taint of greenhouse gases—but they also enhance it with acres of beaches, parks, campgrounds and picnic areas for the public’s enjoyment. We’ve planted trees and shrubs as forage for deer, sponsored fish stocking programs and generally contributed to wildlife preservation. Our programs, I’m told, helped set the standard for hydroelectric projects across the nation,” Ciminelli said.