Official Village of Solvay Website

by Tim Knauss/The Post-Standard

The New York Power Authority on Tuesday rescinded planned rate increases for its hydropower customers, saying the decision would save New York residents and businesses $16.5 million this year.

Responding to a firestorm of criticism from legislators and the governor, Richard Kessel, the power authority’s president and chief executive officer, said no rate increases will be considered until May 2010.

“The power authority has heard the call for help and relief,” Kessel said in a prepared statement delivered at the authority’s largest hydro plant, the Niagara Power Project in Lewiston.
NYPA also canceled its usual practice of awarding employee bonuses this year, said Christine Pritchard, speaking for the authority. In recent years, such “variable pay” has amounted to more than $3 million.

Solvay Mayor Anthony Modafferi, who serves as executive director of the Municipal Electric Utilities Association, joined Kessel at the news conference. Customers in Solvay and other places with municipal utilities would have seen some of the biggest bill increases from the rate hike — 72 cents a month for residential customers, on average, according to NYPA.

Residential customers of major utilities such as National Grid would have seen bill increases of about 16 cents a month, NYPA said.

The power authority, which delivers super-cheap hydropower to residential and business customers throughout Upstate New York, had proposed a price increase from 1.07 cents to 1.16 cents per kilowatt-hour. That higher rate would have yielded an extra $10 million per year.

The power authority also had expected to raise rates later this year for other customers, including 130 companies in Western New York and Alcoa, the giant aluminum manufacturer in Massena. Those price hikes, which would have totaled more than $6 million, also have been canceled, Pritchard said.

The proposed hikes drew howls of protest, in part because the power authority recently agreed to transfer $544 million to the state general fund to help balance the budget.

The power authority’s practice of awarding annual incentive bonuses to its employees also drew criticism this year because of the economic crisis. Kessel said NYPA employees are committed to “sharing the sacrifice we all must make to weather this fiscal storm.”