NYPA Withdraws Proposed Bonuses, Rate Increases

Darrel J. Aubertine

Official Press Release from the New York Power Authority http://www.nypa.gov/press/2009/090324b.htm

LEWISTON – New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel today announced that all proposed rate increases for the Authority’s hydropower customers will be cancelled this year due to the extraordinary economic crisis facing the state and nation. The move will save New York businesses and residents approximately $16.5 million.

Joined at a news conference at NYPA’s Niagara Power Project by Tony Modaferri of the Municipal Electric Utilities Association, which represents 40 municipal electric districts throughout the state, and Kelly Brannen of Power For Economic Prosperity, Kessel said that the decision was made to extend current rates for the economic benefit of its customers and the residents of the State of New York as they cope with crushing financial pressures.

“New York State and the nation are facing the most severe economic crisis since the Great Depression,” said Kessel. “The Power Authority has heard the call for help and relief from any hydropower rate increase and is responding by holding the line on current hydropower rates for its industrial and municipal customers. NYPA’s hardworking and dedicated employees remain committed to its mission of providing clean, reliable and economic energy to support businesses and consumers across the state, and in sharing the sacrifice we must all make to weather this fiscal storm.”

Senator Kevin Parker (Brooklyn), Chairman of the Senate Energy Committee, said, “Having strongly expressed our views and worked intensively with President Kessel and the NYPA staff in recent days, the Senate Energy committee members are pleased with the appropriate and prompt actions taken by NYPA today. In our state’s current economic situation, any energy cost increases that can be avoided should be avoided, and bonuses for public employees, however hard-working and deserving they may be, are inappropriate at a time of great hardship for so many. We commend President Kessel and the Authority for working with us quickly and responsively. We look forward to an ongoing partnership with NYPA to assure that we do the right thing for all New Yorkers.”

Assemblyman Kevin Cahill (Dutchess/Ulster), Chairman of the Assembly Committee on Energy, said, “The Power Authority’s decision to freeze rates and to hold off on the bonuses is a win for New York’s ratepayers and those of us that are trying to reform the way we approach energy in this State. Richard Kessel was chosen by Governor Paterson to restore integrity and public accountability to the Power Authority. Today’s action is proof that those values are starting to take hold.”

In cancelling any proposed rate increases, NYPA is helping to keep down the overall electric bills for millions of New York businesses and residents. Specifically, those who receive hydropower rates from NYPA include:

Approximately 2.3 million residential customers of three upstate utilities through the Rural and Domestic program;

--Over 180,000 customers of NYPA’s 51 municipal and rural cooperative electric systems throughout upstate New York and Long Island through the Preference Power program;

--Nearly 130 industrial companies in Western New York that receive power under the Expansion Power and Replacement Power programs; and

--Preservation Power customers in Northern New York, including Alcoa. 

It is anticipated that NYPA will be able to hold the line on current hydropower rates until at least May 2010.

“We recognize that NYPA has an obligation to recover the cost of generating hydropower in a timely and reasonable fashion while balancing the need of providing for the economic stability of the state and millions of its residents,” said Kessel. “NYPA’s Board and Governor Paterson are seeking to balance those needs in the most efficient and responsible way possible.” 

Senator Bill Stachowski (Lake View) said, “Richard Kessel did the right thing in rescinding the rate hike and the ill-considered bonuses. Along with my colleagues in the new Senate Majority, I look forward to working with Mr. Kessel to make the Power Authority a truly responsive and responsible organization that serves all New York. An innovative and efficient New York Power Authority is in everyone's interest, and today's action is a good first step toward that goal. We will make sure that our businesses get the power they need and our ratepayers get the relief they need.”

Senator David J. Valesky (Oneida) said, “I am pleased that the Power Authority has reconsidered the ill-conceived plan to raise electric rates and give out bonuses to executives. I am also pleased that the leadership of the Power Authority has listened to the elected officials and the people we represent as we spoke with one voice against these proposals.”

Senator Darrel J. Aubertine (Cape Vincent) said, “By working with NYPA, we have avoided a pair of moves which would have been detrimental to the business climate in our state and costly to working families throughout Upstate New York. Certainly it’s clear that when we laid out the facts to Mr. Kessel and NYPA, they understood that the potential impact of these bonuses and rate increases on our economy far outweighed the rationale for these moves. I’m extremely pleased that through respectful negotiations we were able to achieve real results for the people of New York.”

Senator Neil Breslin (Albany) said, "We asked the NYPA to go back to the drawing board, to consider the Upstate households struggling with job loss—to consider the elderly who are trying to make ends meet and younger families trying to start a life. And they listened. I commend Richard Kessel for taking our suggestions and concerns, and look forward to partnering with him in the future to enact policies that create new jobs and help keep service rates affordable."

Senator Antoine Thompson (Grand Island) said, "Cutting these bonuses and halting the rate hike was the right decision for NYPA to make. The next step includes enacting real reforms of how the authority functions and giving Western New York a voice within NYPA's decision-making process. I'll be working with my colleagues to create policy that will address ways to keep our power right here at home and use excess power to reduce rates and create new jobs."

Assemblywoman Francine DelMonte (Niagara) said, “I commend President Kessel on taking action to halt all proposed rate increases for all hydropower customers this year. Having fought many years to maintain local industry access to Replacement and Expansion power and knowing the global economic pressures facing many area companies, I welcome Gov. Paterson’s call to stop any rate increases for ratepayers and President Kessel’s action to extend that decision to all hydro users.” 

Assemblyman Robin Schimminger (Tonawanda) said, “This is indeed good news. Holding the line on electric bills will give everyone a little breathing room during these difficult economic times. In addition, NYPA’s decision is a positive move that reaffirms its commitment to both residential and commercial ratepayers that it is willing and able to do its part to move the economy in a better direction.”

Assemblywoman Addie J. Russell (Watertown/Canton) said, “I applaud NYPA for understanding the need to keep rates stable during this economic climate. Every additional dollar our working families must pay for electricity is a dollar they cannot use for other necessities. The proposed rate hike would have also compounded the struggles of our small businesses and jeopardize jobs. NYPA’s decision to abandon the proposed increase is responsible and prudent.”