Sneaky rate hike from NY State Power Authority!
03-31-2009, 07:21 AM
Sneaky rate hike from NY State Power Authority!
Found in the Buffalo News - sad news indeed:
State Power Authority plans rate hike and bonuses
12.1% jump eyed; lawmakers fume
By Tom Precious
NEWS ALBANY BUREAU
Just last month, Gov. David A. Paterson and the State Legislature, with the New York Power Authoritys blessing, approved a plan to sweep nearly $500 million from the agency to help balance the state budget with promises that rates would not be affected and that the authority could afford the financial bailout.
Now, Power Authority officials are quietly pushing a plan to raise electric rates for millions of upstate customers.
And in a case of what critics say is ill-timed and bad judgment, the officials also are considering giving bonuses to all of the agencys 1,500 employees, who last year shared $3.4 million from the pot of variable pay.
Critics say the rate boost would not have been necessary if the authority fund raid had not been permitted.
While the increase will be spread across all customers so individual bills wont rise dramatically less than a dollar per month on average for residential ratepayers it is expected to add about $10 million in energy expenses across upstate.
All this comes after a Democratic lawmaker in Albany recently contended that New York ratepayers are overcharged $2.2 billion a year because of the way electricity is bought on the wholesale market and after the U. S.
Energy Information Agency reported last month that New Yorks residential electricity rates are the second highest in the continental United States.
Weve been lied to. Weve been cheated, Sen. George D. Maziarz, a Newfane Republican, told Power Authority officials at a brief and sparsely publicized hearing Thursday in Albany. No authority board members attended the meeting, at which Maziarz blasted the agencys rate request.
The lawmaker, who also criticized a recent Power Authority deal to send upstate hydropower to a Long Island federal laboratory, called the agencys two board members from Western New York Elise Cusack and Patrick Curley enablers of these misdeeds and said they should resign. You have failed us, he said.
But Power Authority officials say their hands were tied. State law requires the agency to sell electricity to its preference power customers at cost. We are prohibited by state law to sell preference power at anything less than cost. We cant sell at less than cost or more than cost, said Christine Pritchard, a NYPA spokeswoman.
That means that even if NYPA wanted to dip into the funds that were swept into the general fund last month to block the preference power rate hike, state law would prevent such a move.
The board of the Power Authority, the nations largest state-owned power agency and operator of 18 generating facilities, is to vote on the proposed rate increase in the next month.
Critics say the hike could not come at a worse time, considering the sour economy and the problems the state was already having in attracting and keeping jobs. Moreover, it comes as state officials are considering a state budget plan that is poised to raise levies on health insurers, utilities and other businesses that will be passed on to consumers, as well as higher fees on everything from beer to car registrations to fishing licenses.
The Power Authority proposal calls for a 12.1 percent increase the next two years in preferred hydroelectric rates on energy produced at its Niagara Falls and St. Lawrence facilities. The rate, rising 8.2 percent the first year starting May 1, affects just a portion of electricity bills, authority officials said, meaning the average residential bill will increase between 16 cents and 87 cents per month. By next year, it will mean monthly rate hikes of up to $1.32 on average for residential consumers of municipal and rural cooperative systems and 24 cents for utility company customers.
The increase affects 2.3 million residential households served by National Grid, New York State Electric & Gas, Rochester Gas & Electric and residential and business customers of 51 municipal and rural electric cooperative systems, in areas such as Jamestown and Akron.
Electricity from the two hydroelectric facilities sent to seven Northeastern states will also rise. Downstate customers, with the exception of three Long Island towns, are unaffected.
The 12.1 percent increase over two years is on top of 11.4 percent hikes in the last two years in the preferred program.
Why, why now, and why so large? Niagara County Legislature Chairman William L. Ross asked the Power Authority officials Thursday in Albany. He said that four years ago he backed a 50-year relicensing deal involving the Niagara Power Project, in part, because of claims by authority officials that costs involving the facility would not mean higher rates. Now, authority officials are blaming relicensing costs at the Niagara and St. Lawrence facilities for the new rate hikes.
At a time when the nation is fuming over bonuses paid to corporate executives, especially at bailed-out AIG, the Power Authority also is weighing its annual bonus program.
Over the years, the authority has given what it calls variable pay to its workers for meeting certain departmental and agency goals, such as reliability of electric transmission and number of environmental incidents.
Last year, the authority paid $3.4 million in bonuses to all 1,591 employees. A year earlier, it paid $3.57 million to 1,532 workers. The payments are made in March.
The New York Power Authority has not distributed variable pay of any kind to any of its employees in 2009, said spokeswoman Pritchard. She would not say if the bonuses will be paid this month or some other time this year. If approved this year, it would be the first bonuses paid since Paterson became governor and since Richard Kessel took over as authority president last year.
Maziarz rebuked the Power Authority officials for the bonus program at a time when it transferred hundreds of millions of dollars to the states general fund and while seeking to raise electric rates on consumers which he called a hidden tax during an economic downturn.
You are asking taxpayers to fork over more of their paychecks to you. Given that little fact, I think youve got a lot of nerve paying bonuses, he said.
Authority officials were unable to provide a list of each employee and their bonus payment last year or the recipient of the biggest bonus.
Maziarz, Ross and Sen. Joseph Griffo, a Utica-area Republican, criticized the authority for barely publicizing Thursdays hearing Griffo said his staff could not even find a mention of it on the authority Web site and for holding only one hearing on a weekday in Albany. Ross invited the authority to Niagara Falls for a public session.
Others said authority officials have not provided the data with which to adequately study the rate hike proposal. Public comment on the rate hike plan closes March 30.
© 2009 Buffalo News
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