NYPA Files Application for A New License For the Niagara Project Reflecting Participation of Area Communities

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Michael Saltzman

August 18, 2005


LEWISTON—The New York Power Authority (NYPA) Thursday submitted an Application for a New License to the Federal Energy Regulatory Commission (FERC) for its Niagara Power Project, a 2,400,000-kilowatt project whose low-cost hydropower is a mainstay of the Western New York economy and serves as the Empire State’s single largest source of emission-free, renewable power. The application reflects substantial input of various interested parties in the region, provided through a multiyear public process.

The filing with FERC, for a new 50-year operating license, also included an Applicant-Prepared Environmental Assessment of the project, whose current license expires in August 2007. Both the license application and the environmental assessment reflect comments by the interested parties, or stakeholders, who have partnered with NYPA in an alternative licensing approach that differs from the traditional one where the stakeholder’s role during the pre-application phase is limited.

On Friday, the Power Authority will also submit to FERC relicensing settlement agreements with federal and state resource agencies and environmental organizations, area municipalities, the Tuscarora Nation, customers and other stakeholders. Those agreements, finalized over the last month, stem from the Alternative Licensing Process that began at the end of 2002, after FERC approved NYPA’s request to proceed in that direction to reduce or eliminate unresolved issues and to obtain stakeholder support of the new license.

 “The submittal of the license application and supporting documents is a major milestone in our cooperative efforts with numerous parties to assure the Niagara Project’s continued, effective operations, as well as enhance the Niagara River and its surrounding communities,” said Eugene W. Zeltmann, NYPA president and chief executive officer. “We take very seriously our stewardship of this vital project, which produces low-cost power directly linked to more than 43,000 jobs at over 100 Western New York businesses. We also recognize the importance of assisting the communities that host the project.”

 Zeltmann noted that the settlement agreements allow the Power Authority to meet its federal regulatory obligations, while providing additional benefits to the various stakeholders.

“The alternative licensing process permitted early community involvement in identifying environmental, socioeconomic, cultural and land management issues for further study, and provided us with significant influence in the development of the license application and other documents,” said Sen. George D. Maziarz. “This has been a real team effort, with careful attention to detail and appreciation for the importance of negotiation and compromise.”

“Anyone involved with this process couldn’t help but come away from it with a keener appreciation of the Niagara Project’s significance to Western New York, particularly for creating and protecting jobs,” said Assemblywoman Francine DelMonte. “NYPA’s inclusive approach provided our communities with an integral say in the project’s future, and negotiated settlement agreements that balance the diverse interests concerning its operation.”

“The various settlement agreements between the Power Authority and regional stakeholders provide numerous benefits for Western New York without compromising the rates manufacturers pay for low-cost hydropower,” said James Rouse, co-chairman, Power for Economic Prosperity (PEP), a coalition representing 24 regional manufacturing companies. “The Niagara Power Project helps to protect tens of thousands of family-sustaining jobs in Western New York, so the progress toward relicensing of the project is good news.”

One of the settlement agreements addresses new license terms and conditions for ecological, recreation and water quality resources, with the parties to the accord including the U.S. Department of the Interior, through its component bureaus, the U.S. Fish and Wildlife Service, the Bureau of Indian Affairs (BIA), and the National Park Service (NPS); also, the New York State Office of Parks, Recreation and Historic Preservation (OPRHP); the New York State Department of Environmental Conservation (DEC); New York Rivers United; Friends of the Buffalo-Niagara River; the Niagara Relicensing Environmental Coalition; the Niagara Falls Water Board; the New York Association of Public Power; the New York State Rural Electric Cooperative Association; and the Municipal Electric Utility Association.

“The extensive studies supporting the Power Authority’s license applications, as well as the comprehensive settlement agreement, demonstrate a thorough review of the environmental resources associated with the Niagara Project,” said DEC Acting Commissioner Denise M. Sheehan. “Beneficial environmental enhancements to such resources in the Niagara River basin, provided under the settlement agreement, are examples of the high degree of cooperation resulting from state agency and stakeholder participation in the critical stages of the Power Authority’s licensing effort.”

“The protection of the aquatic ecosystems of the Niagara River is an integral part of this well-considered relicensing agreement,” said Julie Barrett O’Neil, executive director, Friends of Buffalo Niagara River (FBNR), the organizer of the Niagara Relicensing Environmental Coalition. “It will help restore and protect wetlands, forest and shrub habitats and improve public access to the river.”

The relicensing agreement with DEC, FBNR and other regulatory agencies and environmental organizations provides for the Power Authority’s creation of a $12-million fund for construction of eight habitat improvement projects (HIPs) at designated areas outside the Niagara Project’s boundaries, within the Niagara River basin. The HIPs will help protect fish and wildlife along the river corridor.

Among the other NYPA license commitments under the multiparty settlement agreement with resource agencies and others:

—One million dollars annually for additional habitat improvement projects in the Niagara River basin, to be identified by an Ecological Standing Committee consisting of representatives of NYPA, DEC, U.S. Fish and Wildlife, the Seneca Nation of Indians, the Tuscarora Nation, Tonawanda Seneca Nation, N.Y. Rivers United, and the Niagara Relicensing Environmental Coalition.

—Capital improvements to enhance public access to the river in the area of the project, including additional parking for anglers and others.

—Improvements to recreational facilities operated by OPRHP on lands within or in the vicinity of the Niagara Project boundary, supported by a nearly $9.3 million fund NYPA established for this purpose.

—A $19 million fund to address the project’s impact on groundwater flow. The fund will be administered by the Niagara Falls Water Board and provide for enhancements to the city’s Falls Street Tunnel, as well as any future repairs or maintenance related to the capital improvements.

NYPA entered into a separate settlement agreement with the Niagara Power Coalition to establish a Host Community Fund for capital projects and infrastructure, and for economic development and public health and safety. Some $5 million will be provided annually to the communities for the term of the new license.

The Host Community Agreement, which addresses non-licensing matters outside FERC jurisdiction, also includes 25 megawatts of Niagara power for the Niagara Power Coalition communities. And it provides for a Host Community Greenway Fund, with annual NYPA payments of $3 million for recreational facilities and other measures to enhance tourism in Niagara County.

“I fully expect this fair and equitable settlement agreement will support the Federal Energy Regulatory Commission’s favorable consideration of the Power Authority’s license application,” said William Ross, chairman, Niagara Power Coalition and chairman of the Niagara County Legislature. “Our organization has worked extremely hard, along with others in Niagara County, at representing the public interest in this process, and we’re gratified that the relicensing is now entering the critical, final phase of federal review.”

The Niagara Power Coalition consists of the seven municipal entities encompassing the Niagara Project’s boundaries: the City of Niagara Falls, Niagara County, the Towns of Lewiston and Niagara, and the school districts of Lewiston-Porter, Niagara-Wheatfield and the City of Niagara Falls.

Beyond the Host Community Agreement, NYPA has committed to establish two additional Greenway funds, for $4 million annually, for ecological projects along the Niagara River basin, and construction and enhancement of area state parks, recreation and related facilities.

Another non-licensing agreement will provide the Tuscarora Nation with a fund for $1 million a year over the duration of the new license. NYPA has also agreed to allocate up to one megawatt of low-cost Niagara power to the Tuscarora, identify opportunities for energy efficiency projects, and enhance Tuscarora cultural programs.

“This agreement will allow us to work together with NYPA to ensure that the relicensing of the Niagara Project proceeds in a manner that protects future generations of the Tuscarora People and the health and well-being of Mother Earth,” said Tuscarora Chief Leo R. Henry.

The Niagara Project, which produced its first commercial power in 1961, is New York State’s largest single source of electricity. It provides some of the lowest cost electricity in the state, along with another NYPA hydroelectric project, on the St. Lawrence River in Massena.

In late 2003, FERC issued the St. Lawrence-Franklin D. Roosevelt Project a new, 50-year license, following a cooperative consultation process similar to the approach the Power Authority has taken for the Niagara Project.