Customers receiving New York Power Authority’s low-cost hydropower, voiced their concern Wednesday with a series of rate hikes.
“In today’s era of (New York’s Climate Leadership and Community Protection Act), the oncoming cap and invest program and all the expenses that are aligned with the CLCPA, manufacturers are really dying by a thousand cuts,” said Peter Ahrens of the Buffalo Niagara Manufacturing Alliance.
NYPA’s current Preference Power Rates are $12.88 per megawatt hour, which have been in place since 2014. The new proposed rates, which would be effective July 1 each year from 2025 through 2029, are:
• $17.61 for 2025
• $21.66 for 2026
• $26.72 for 2027
• $33.05 for 2028
• $24.25 for 2029
Scott Tetenman, senior vice president of finance for NYPA, said the main driver for these changes was capital investments in the two hydroelectric plants, having received $800 million in new equipment and updates from 2011 through 2022. The $1.1 billion, 15-year Next Gen Niagara project, which started in 2019, is also modernizing the Niagara Power Project to extend its lifespan.
“The authority has experienced inflationary pressure on its operating and maintenance expenses, including administrative and general expenses,” Tetenman said, resulting in growing recovery costs upward of $100 million by Dec. 31, 2026, and down to $25 million by Dec. 31, 2029.
Niagara-Wheatfield Superintendent Dan Ljilijanich said the district is looking at a $100,000 increase in electrical costs in the first year of this phased-in process, which would end up being passed on to the public it serves.
“These steep increases are something that as a district, we’ll have a really hard time tolerating,” Ljilijanich said, asking them to reduce the rate increases by stretching them out over a longer period of time.
Jim Stokes, executive director of the Municipal Electric Utilities Association of New York State, said the increases would negatively impact the affordability of its rates to 115,000 customers, rates they are entitled to at the lowest reasonably possible.
“We recommend that NYPA take a sharper pen to the cost that it can control and its requested profit margin to maintain affordable power for its customers,” Stokes said.
Ahrens and Todd Tranum of the Manufacturers Association of the Southern Tier both argued how these rate increases would threaten the viability of manufacturers they work with, potentially losing jobs.
The Preference Power Rates apply to hydroelectric sales to customers receiving low-cost hydropower from the Niagara and St. Lawrence-FDR power projects. They include 47 municipal electric systems, four rural electric cooperatives, three investor-owned utilities, the Tuscarora Nation, two transportation authorities, customers in neighboring states, and host communities identified by the relicensing agreement for the Niagara Power Project. 1,457 MW of hydropower are allocated to customers at these rates.
A second public forum will take place from 11 a.m. to 3 p.m. on Tuesday at the Albany Hilton at 40 Lodge St., Albany.
The 60-day public comment period will go through Feb. 23; written comments on the proposal can be emailed to NYPA’s Corporate Secretary at secretaryoffice@nypa.gov.