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Power Authority President Zeltmann Urges Public Systems to Save Energy

Stephen Shoenholz

October 17, 2005


ALBANY—New York Power Authority President and Chief Executive Officer Eugene W. Zeltmann has urged the state’s 51 municipal electric systems and rural cooperatives to mount aggressive energy-conservation efforts in response to “increases in electricity costs that could reach crisis proportions.”

“Never has saving electricity—and all forms of energy—been more critical,” Zeltmann said in an Oct.13 letter to mayors and utility officials in the municipal system and cooperative service territories.

Zeltmann noted that average electricity costs on New York State’s wholesale markets in September were more than double those of a year earlier and that costs for this year through the end of September were 45 percent higher than in the comparable period last year.  He said continued tight supplies and high prices for natural gas and oil, two of New York’s principal power plant fuels, have made “soaring costs on the state’s power markets all but inevitable” for this winter.

He said that, thanks to Gov. George E. Pataki’s leadership, New York State is well positioned to address the problem, through energy efficiency and increased use of clean, renewable energy sources such as wind and solar power.

“These initiatives are essential not only to combat high costs,” Zeltmann said, “but also to help clean our air and reduce our dependence on foreign oil.”

Heightened efforts to conserve electricity are particularly important for the municipal systems and cooperatives, Zeltmann said, since most of them experience their greatest demand for power in the cold-weather months, when many residents use electricity to heat their homes.

“The stakes are high and the warnings are clear,” he said.  “A long winter lies ahead.  It will tell a good deal about our ability to meet our energy challenges in a responsible manner that puts us on a solid footing for the future.”

All of the municipal systems and cooperatives receive low-cost Power Authority hydroelectric power, which is not affected by rising fuel prices.  However, Zeltmann noted, the systems must purchase additional energy to meet needs beyond their hydroelectric allocations.  The price of this energy on New York State markets is set by the cost of the most-expensive electricity required to meet overall needs.

“Those of you buying on the markets are therefore directly affected by the high prices of natural gas and oil,” Zeltmann said in his letter.  “The incentive to make your hydropower go further by using it more efficiently could not be more evident.”

Zeltmann congratulated the 18 municipal systems that have been participating in an Independent Energy Efficiency Program and said the Power Authority is working with all the municipal systems and cooperatives on a major new initiative.  He said information collected from 24 systems in the new program’s first phase shows “that we can achieve meaningful energy savings at reasonable cost.”

In addition to the formal programs, Zeltmann asked the municipal systems and  cooperatives to “strongly encourage all of your customers to do all that they can as individuals to save electricity and to use it wisely—whether by turning out lights, adjusting thermostats or weatherizing their homes.  Unfortunately, they must recognize that they are now subject to some of the same cost pressures that beset those who warm their homes with natural gas, heating oil or propane, rather than electricity.”