Executive Speeches

Excerpts from remarks of Roger B. Kelley, president and chief executive officer of the New York Power Authority, at the Greater Massena Chamber of Commerce’s 76th annual dinner, Massena, New York. 

February 7, 2008 

Let me begin by saying that all of us at the Power Authority were saddened by last week’s fire in downtown Massena.  Our hearts go out to those who were affected.  We can, however, take comfort in the resiliency that people here have always displayed in the face of adversity. 

I’m sure the Chamber will be heavily involved in the recovery effort.  And I want to congratulate Mike Gleason on his appointment—I guess it’s still relatively recent—as executive director and to wish him well as he works each day to sustain and strengthen this community that’s so important to all of us. 

Congratulations as well to Jill Chamberlain, our lead community relations representative at the St. Lawrence-FDR Power Project, who’s taken office as the Chamber’s first vice president.  Jill’s involvement in this organization is just one example—but a significant one—of the Power Authority’s deep commitment to Massena and the North Country. 

That commitment dates back more than half a century—to the earliest days of project construction.  And tonight—on behalf of the more than 230 employees at St. Lawrence-FDR and the Authority’s trustees—I thank you for honoring us as we approach this year’s 50th anniversary of the start of operations at this great hydroelectric facility on  July 17, 1958. 

We meet this evening—even in the aftermath of the fire—at a time of hope for the economic future of Massena and Northern New York.  We’ve had our share of setbacks, but now we all can savor some very welcome news.           

I’m sure you recall that day just before Christmas when Governor Spitzer came to Massena to announce that the Power Authority and Alcoa had reached an agreement in principle on the terms of a new long-term power supply contract for the company.   

You could sense the excitement and the optimism.  The pride in the community.  And the gratitude to the public officials from both parties, the representatives of business and labor, the civic leaders who came together in urging a settlement and helping us to achieve it. 

I’ll never forget Richard Orton, president of United Steelworkers Local 450-A.  He had a copy of a study on the economic impact of a possible Alcoa shutdown.  I’m sure its conclusions could be summed up in one word—devastating.  

Mr. Orton took out that study, ripped it to shreds and gave the pieces to the governor.  For all the speeches that day, this one gesture said it all. 

I assume that, by now, the proposed contract terms are pretty familiar to most of you: 

The continuation of Alcoa’s allocation of St. Lawrence-FDR power through at least 2043. 

The company’s pledge to maintain at least 900 jobs. 

Its $600 million overhaul of the Massena East smelter. 

Its creation of a $10 million North Country Economic Development Fund. 

The linkage between rates for the power and world aluminum prices. 

Instead of going into detail, let me just sum up by saying that this is a balanced agreement that promises benefits to Alcoa, to the Authority and—most important—to Massena and the North Country.  Throughout the long and difficult negotiating process, one of our top priorities was to make sure that the low-cost hydropower’s immense potential as a means to create jobs and investment was fulfilled.  That objective was met. 

We greatly appreciate the role of Governor Spitzer and his team, of our negotiating partners at Alcoa and of the public officials and others from the community.  And we recognize that much remains to be done. 

Last week, the Power Authority’s trustees ratified the Agreement in Principle that I had signed with Alcoa in December.  The next step will be to negotiate the power contract itself—based on the terms in the agreement—and to eventually guide it through the rather involved approval process for our contracts under state law.  Alcoa, meanwhile, can now move ahead with its all-important engineering study for the prospective East Plant renovation.  

So we’re on our way to ensuring that Alcoa remains the backbone of this region’s economy and the foundation for its future growth. 

All of this has special meaning for the Power Authority.  Not only was St. Lawrence our first power plant, but Alcoa was our first customer.   

The company signed its original contract with us in July 1955—more than three years before the project began producing electricity.  That vote of confidence meant a great deal to the Authority.  The power allocation also ensured that Alcoa would stay in Massena—there were concerns even then—and that it would carry out a major plant modernization. 

Alcoa had been in Massena since 1902.  And the dream of harnessing the St. Lawrence River’s vast hydropower potential had gone back almost as far.  When Governor Franklin D. Roosevelt and the Legislature created the Power Authority in 1931—after years of controversy between public- and private-power proponents—it was for the express purpose of realizing that long-delayed dream. 

Nearly 25 more years of debate and disappointment lay ahead.  But in August of 1954, the Authority and Ontario Hydro began a remarkable cooperative undertaking. A power dam spanning the international border, two other dams and 16 miles of dikes were built—taming the International Rapids and creating Lake St. Lawrence.  Channel excavation and other work required for the power project helped make possible the St. Lawrence Seaway—the other vital part of this monumental effort. 

On the U.S. side, the Power Authority created Robert Moses and Coles Creek State Parks, the Wilson Hill Wildlife Management Area and local recreational facilities—making the project a model for hydroelectric developments throughout the nation. 

First power flowed less than four years after the start of construction.  Work was completed within five—two years ahead of the original schedule.  Shortly before that, on June 27, 1959—a memorable day in local history—Queen Elizabeth the Second and Vice President Richard Nixon had dedicated the project in ceremonies at the center of the power dam.   

Inevitably—after five extraordinary years—things returned to normal.  But the Power Authority remained a proud and active member of this community.  We shared in your successes and helped when we could in difficult times. 

In the late 1970s, when Massena was fighting to establish its municipal electric system, we aided that process by reserving a hydropower allocation for the town.  And we’re delighted by the MED’s continued outstanding operation under the leadership of Andy McMahon, a former member of our St. Lawrence-FDR staff.  He learned well.  

In the 1980s, we created the $1 million Greater Massena Economic Development Fund to provide low-interest loans to businesses locating or expanding in St. Lawrence County.  

The fund has since grown to over $2.5 million, and more than 430 jobs—mostly new ones—will be linked to the seven current or pending loans.   I’m pleased to note that the program has picked up steam in recent years—with much of the credit due to a heightened marketing approach by the St. Lawrence County Industrial Development Agency.     

So we’re seeing the fruits of what happened in the ’70s and the ’80s.  

By the 1990s, incredibly enough, it was time to start thinking about a new federal license for the St. Lawrence-FDR project. 

Though the original license wouldn’t expire until October 2003, the Authority began reaching out to the community almost a decade before that.  As you well know, this led to an innovative relicensing process with extensive public participation from the start—and eventually to a string of agreements with various parties. 

Thanks in large part to this highly effective cooperative approach, we received a new 50-year federal license before the old one expired—at a time when many projects were waiting years for their renewals.   

The relicensing, like so much else that we’ve accomplished here, was a testament to the dedication of local officials and concerned citizens—and to their willingness to balance competing interests and priorities.  Now—in line with the agreements—the Authority is providing a wide range of economic, environmental and recreational benefits throughout the project area. 

On a related note, we recently signed new agreements with the local communities concerning Power Authority payments for their operation and maintenance of municipal recreational facilities on St. Lawrence project land. 

This should help to make certain that facilities such as the Massena Town Beach—which are now in top shape thanks to improvements that the Authority provided as part of the relicensing—will remain first-class attractions. 

We’ve completed our work at the local sites and have moved into the fourth year of our five-year program at Robert Moses and Coles Creek State Parks.  Overall, we’re providing a total of $19 million for the improvements at the state and local parks.  

Let me just touch on some of our other activities under our relicensing agreements: 

We’re well along in the process of turning over almost 600 acres of surplus St. Lawrence project lands to the local municipalities and adjacent private property owners.  About 400 acres—two-thirds of the total—have been conveyed thus far. 

We’ve made the fifth in our series of annual payments to the communities and school districts that form the St. Lawrence Local Government Task Force. The contributions will continue throughout the 50-year license term and will come to about $115 million. 

As part of our $66 million commitment to the environment, we’ve completed a number of habitat improvement projects for fish, birds and wildlife in the St. Lawrence-FDR area and have installed and successfully operated an award-winning eel-passage facility at the project.  Work continues on such other initiatives as a major fish enhancement and research program, a newly established St. Lawrence River Research and Education Fund and a 10-year shoreline stabilization program. 

Meanwhile, we’re moving ahead on a series of measures that will create the best possible conditions for waterfowl at the Wilson Hill management area.  

I think it’s clear—even from this brief summary—that the relicensing has already produced some very positive results.  And I can tell you that the Power Authority takes its commitments under the agreements very seriously—and is determined to meet them quickly, efficiently and effectively. 

I’m also pleased to report progress on other fronts. 

At the power project itself, we’ve passed the halfway mark in our $281 million Life Extension and Modernization program that’s scheduled to run through 2013.  Work is complete on nine of the project’s 16 turbine-generator units—with the 10th expected to return to service at the end of May.  This ambitious program will ensure that

St. Lawrence-FDR operates at maximum efficiency for many years to come. 

We’ve also had some encouraging developments concerning the Seaway Private Equity Corporation—or SPEC—the economic development investment group that was set up with the promise of $10 million in Power Authority funds originally earmarked for the St. Lawrence Aquarium and Ecological Center. 

The first company to receive SPEC funding—ZeroPoint Clean Tech—is operating a test facility in Potsdam for a biomass-to-gas process and is ready to begin deploying its equipment to other businesses.   

A second SPEC company—Curran Renewable Energy—plans to produce wood pellets from biomass in two buildings at the Massena Industrial Park—assisted in part by a loan from our Greater Massena Economic Development Fund.  And thanks to Pat Curran for his vision and persistence in helping to move this project forward. 

Within the past two weeks, two software-development companies in Potsdam have been approved for SPEC investments.  So this initiative holds considerable promise. 

Of course, not all the economic news has been good.  This community has been dealt a major blow by the pending shutdown of the General Motors Powertrain plant at the end of the year. 

The Power Authority will work with the Spitzer administration and local economic development officials to make sure that the 12 megawatts of St. Lawrence-FDR hydropower now allocated to GM is used to maximum advantage in creating jobs and investment.   

This power is part of the block of Preservation Power that was designated for use by North Country businesses under state legislation in 2005.  Any allocations will, of course, be in line with the criteria set out in the legislation—including commitments for new jobs and capital investment.  And they will also be in line with the Authority’s own longstanding commitments to the North Country and its economic health. 

Nearly 52 years ago, with construction on the St. Lawrence moving forward in the face of daunting obstacles, Robert Moses—the Power Authority chairman who directed our part of the joint effort—spoke to a Canadian audience that may not have been very different from this one.  

“What keeps us going,” he said, “is just sheer stubbornness… .  For we are pitting against the rush of a mighty stream, clogged with ice in winter, little more than audacious brains and brawn, antlike men and toy machinery, the vaulting ambitions of two democracies.”  

Tonight—in this 50th-anniversary year—our challenge is not to construct a massive power project, but to build a strong and thriving North Country economy. 

It is not to tame a mighty river, but to harness the churning forces of a global economy. 

It is not to make a temporary home for an army of construction workers, but to create a permanent home for our children and grandchildren—one with the jobs and the quality of life that will enable them to stay and raise their own families here in Northern New York. 

The Power Authority stands ready to join with you in achieving these vital goals—now and far into the future. 

Again, our thanks to you for honoring us tonight.  To be recognized by our North Country neighbors—in the place where the Power Authority got its start—is the finest tribute we could receive.