Executive Speeches

Remarks of Joseph Seymour, chairman of the New York Power Authority, to the Municipal Electric Utilities Association of New York State Semiannual Meeting, Syracuse, New York

April 26, 2006

It’s been five years since I spoke with you during my first tour of duty as Chairman of the New York Power Authority. In August 2001, when I attended your meeting in Niagara Falls, none of us could have imagined that – only two weeks later – our world would be changed forever by the terrorist attacks of September 11th.

The destruction of the World Trade Center resulted in the deaths of nearly 3,000 people, including my good friend and colleague, Port Authority Executive Director Neil Levin. When Governor Pataki asked me to take over for Neil at the Port Authority, I knew that I was facing the single most daunting challenge of my lifelong career in public service.

For me, the immense and unique challenges of that job reinforced a very fundamental notion about public service. It is the simple understanding that we only get things done by working together. As Winston Churchill said when his nation faced the challenge of war: “If we are together, nothing is impossible. If we are divided, all will fail.”

The members of the MEUA understand that essential truth. It’s why your organization exists. And I strongly believe that NYPA and MEUA work best when we work together. We are, after all, partners in public power.

Since my last opportunity to speak with you, we have taken great steps toward forging an even stronger partnership… most notably the landmark comprehensive agreement that we concluded in 2003.

As you may know, I have been a fan of public power since birth. I grew up in the Village of Ilion, whose municipal electric system was formed in 1899.

Like many of your customers, I took for granted the advantages of living in a muni.  I confess that I developed some very bad habits growing up.  I’d leave the TV on… even if I wasn’t watching. I’d leave the radio playing… even when I was done listening. I’d forget to turn the lights off when I left a room.   If it was plugged in, I left it on.  Electricity was like air or water. There was plenty of it and it didn’t cost anything.

That was how I thought as a child, growing up with the advantages provided by the Ilion Board of Light. But as I matured, I discovered I had to put away childish things… including my childhood notions about energy.

Today, as an adult, I always turn out the lights… sometimes even when I’m still in the room.

Throughout my career in public service, I have grown increasingly aware of the value of energy efficiency.

For example, I have learned that if you replace just four 100-watt incandescent bulbs with four 23-watt fluorescent bulbs, you’d get as much light and save 1,356 kilowatt-hours of electricity. Even at municipal power rates, that means about $50 dollars in savings… just by changing four light bulbs.

I’ve learned that, nationwide, refrigerators consume the output of sixty 300-MW power plants. If modern high-efficiency refrigerators were used in every American household, it would eliminate the need for about 30 of those 60 power plants.

I’ve learned that most conservation measures can be implemented for less than half the cost of electricity from the average U.S. power plant.

I am told that, given the nation’s current mix of fuel sources for power generation, every kilowatt-hour of electricity produces more than 1-1/2 pounds of carbon dioxide. Of course, hydropower has no emissions, which increases its value as environmental impacts are considered.

I should note that NYPA, as the largest producer of hydropower in New York State, and MEUA members, as major consumers of hydropower, are doing their part when it comes to emission-free, renewable power.

In 2004, the Public Service Commission established the Renewable Portfolio Standard, which is intended to make renewable resources account for at least 25% of the state’s power by 2013.

NYPA hydropower already accounts for much of the 19% existing base of renewable power, so it makes sense that our hydropower customers were exempted from the RPS order… but that doesn’t exempt any of us from the need to maintain the availability and reliability of those precious hydropower resources – or exempt us from the responsibility of using them as efficiently as possible.

When I last spoke with you, we were about two-thirds finished on the $290 million life extension and modernization (LEM) program at the Robert Moses Plant at the Niagara Project.  Today, this major upgrade is nearly complete, with 12 of the 13 turbine-generator units done and everything expected to be completed in December.   We are also finishing up our $20 million maintenance program at the Niagara Project’s Lewiston Pump-Generating Plant—the facility that lets us store water so we can produce more electricity in peak periods.  That job should be completed next month.

NYPA has committed to the MEUA that we will conduct a study of the impact of the LEM project to determine the amount of additional firm power it will make available. Federal “preference” customers, such as yourselves are entitled to 50% of that power. We expect it will become available at the start of 2007.

As you know, we submitted our application for a new 50-year license for the Niagara Project last August, two years before the current license expires.  The goal is have the new license approved by August 2007 without missing a beat between the new and the old.

Preparation of the license application has involved an extensive collaborative relicensing process designed to address an array of stakeholder interests in the Niagara Power Project.  The Power Authority conducted more than forty detailed technical studies and a draft Environmental Assessment.  Settlement agreements have been reached with most parties.

Without the active participation of MEUA and other customers, an essential concern about settlement costs would neglected… as some parties refused to acknowledge that the money they wanted from NYPA would be paid by those who purchase power from NYPA.  Too many interests apparently believe that we engage in some form of alchemy that turns water into gold.

With your help, we worked to attain a proper balance between our obligations to protect and preserve the region’s natural resources and serve the needs the local communities, while still maintaining very competitive rates for you and other Niagara hydropower customers.  By speaking out during the relicensing discussions and protecting the interests of your members, MEUA has played an essential role in the process.

As I mentioned earlier, the Global Settlement approved in 2003 addresses several areas of mutual interest, including economic development, electric-drive transportation, and energy efficiency.

Low-cost power gives your communities a tremendous advantage in attracting new businesses and new jobs. Under provisions of the Global Settlement, we’ve been working together to enhance the Economic Development Program serving your systems. I’m advised that the guidelines for the new program are close to being finished and I understand Bob Mullane will discuss with you tomorrow how the process will work for the municipal systems and rural electric cooperatives to adopt the new guidelines.

In the area of electric-drive transportation, I’m pleased to report that, to date, 13 systems now have vehicles provided under the program.  John Markowitz of our Electric Transportation group will be giving a presentation tomorrow to update you on the vehicles that will become available to your systems.

Improved air quality is one of the goals of electric-drive transportation, a goal also served by the Tree Power program. I was happy to learn that your systems planted nearly 1700 saplings in recent years – bringing the cumulative tree count to well over 27,000 trees since the program began.

With regard to energy efficiency, NYPA recently received your comments on Nextant’s draft energy efficiency study and incorporated them in the final report. This report will be available at tomorrow's session on energy efficiency. We will also make sure that anyone who is not here at the conference will get a final report.

As you may be aware, energy efficiency is key element in the effort to address the critical transmission issues facing the villages of Lake Placid and Tupper Lake and the Power Authority joined forces in a landmark power-supply agreement to solve the problem.

Lake Placid is implementing various energy efficiency measures and Tupper Lake is about to follow suit as both villages review the recommendations of the Nexant audits.

One promising possibilities that both villages are exploring is replacing refrigerators in municipal public housing with high efficiency models that use only a quarter of consumed by older units. We’re still working out the details and will keep you informed of developments.

Energy efficiency certainly make sense when you consider that incremental power is nearly five times more expensive (on a cost per kilowatt-hour basis) than hydropower.  Minimizing the use of the costlier juice with energy efficiency maximizes the value of your hydropower.

I know that Carol Garcia and other staff are continuing to work closely with our full requirements customers to develop plans for your incremental needs since there is no NYPA generation for to serve incremental load and we will have to go the market to meet these needs.

I know that many of you have already been doing energy efficiency work, such as providing compact fluorescent bulbs to the residential customers.  Some of you have initiated peak load management plans.  Others have placed outright bans on electric boilers and other measures to meet your systems’ special needs.

You all deserve credit for these initiatives and I hope our work together will help you continue to make the best and most efficient use of precious hydropower resources.

In closing let me thank you, as our partners in public power, for your efforts in working to serve the citizens of your communities. I know we’ve had our differences in the past, but we must work together in order to really make a difference for the people we serve.

I appreciate your hospitality and look forward to continuing our close partnership in the years ahead. Thank you very much.