Powering Western New York's Future

In 2005 we achieved a great victory for Western New York by fighting for more from one of our region’s greatest natural resources, the Niagara Power Project.  With the settlement of $279 million to Buffalo and Erie County from the New York Power Authority (NYPA), we nearly tripled the original offer. Your support helped us achieve our goal of bringing new revenue and greater local control to redeveloping Buffalo’s waterfront for the design and construction of new waterfront projects including parks, public access and improved transportation.

It’s time to stand up for ourselves once again, and keep Niagara Power Project proceeds in WNY where they belong, rather than feeding their coffers for more state budget bailouts, downstate projects and wasteful spending.  When constructed the Niagara Power Project was intended to provide a direct benefit to the host community, yet we continue to see the money derived exclusively from our natural resource being sucked right out of our region.  Last year NYPA had a surplus of $309 million, 76% of which was derived from the Niagara Power Project.  NYPA’s own study found that only 14% of the economic benefit from the Niagara Power Project remains in WNY. My office calculated that NYPA makes approximately $63 million from the sale of unused Replacement and Expansion Power intended to stay in the host community- this is an injustice.  Western New York is not getting its fair share of the revenue generated by a resource in our own backyard. It’s time to take back what is naturally ours. That’s why I have drafted legislation that would direct the money derived from the sale of unused Replacement and Expansion Power to waterfront, park and cultural related projects in the region. 

My Proposal to Keep More Hydropower Benefits in WNY

• Industry tells us that because of a number of factors, the amount of hydropower they actually use is generally substantially less – typically 2/3 – of the amount they are allocated.  This is because they will not always be running at full capacity 24-7-365, and also because of first-through-the-meter arrangements with the utilities which cause industrial customers to draw a certain amount of higher-price power before they draw their hydropower allocation.
• NYPA sells this allocated but unused power through the ISO at a dollar amount dictated by the ISO’s reverse auction.  This is a principal source of the Authority’s extraordinary revenue. 
• The Replacement and Expansion Power programs constitute 695MW.  Under current conditions, the monetization of 5 MW of hydropower produces about $1.5 million per year.  One third if this is unused and monetized by the Authority currently through the ISO auction process, so even if we take a conservative estimate that 210 MW are being converted to cash the allocated but unused Replacement and Expansion Power contributes about $63 million in cash to NYPA’s bottom line annually.
• Replacement and Expansion Power were always meant to be solely for the benefit of the host community.  At the very least, these $63 million in annual proceeds should be devoted to pressing needs in the host communities.
• The $63 million in annual revenue would provide a predictable stream of funding for the use of:
• the Erie Canal Harbor Development Corporation
• the Olmsted Parks Conservancy, and
• Erie and Chautauqua County’s leading cultural institutions
• Chautauqua Lake
• Downtown Niagara Falls redevelopment
• The Buffalo Niagara Medical Campus.
• These dedicated, recurring funds could be the revenue source for the repayment of bonds which would be sold to finance roughly one half billion dollars in immediate and much-needed capital improvements for these efforts. 

We’ve already proved that when we stand together, no one can deny us and no one can doubt that the people of Western New York deserve more.  I look forward to continuing to work with you on behalf of a better and stronger Western New York so that we can create real jobs and real progress for real people.

Why Buffalo/Erie County deserved a more fair and equitable settlement:
The Niagara River that fuels the Power Project originates in Buffalo, and the lake that feeds the river is Buffalo’s Lake Erie.  As a result, the Erie Basin is fundamental to the operation of the Niagara Power Project and without it, the Niagara Project could not exist. 

Federal and state legislation required industrial users of Niagara power be located within a 30 mile radius of the Project. This helped fuel Buffalo’s rise as a major manufacturing center throughout most of the 20th century. Land use and transportation infrastructure planning were directly influenced by the industrialization of the Buffalo waterfront corridor, including the Inner and Outer Harbors and the Skyway Bridge.

Today, most industry is gone and what remains is an unsightly, undeveloped and inaccessible Lake Erie and Niagara River shoreline. By contrast, the Canadian shoreline of Lake Erie and the Niagara River are pastoral in their natural beauty and are replete with recreational opportunities, including a generous number of trails, parks, parkways and beaches. The Buffalo waterfront should be no less than a complement to the Canadian shores, an inviting and accessible cultural and recreational destination for the 14 million tourists who visit Niagara Falls and an economic development opportunity for the benefit of all of Western New York.

How was a better settlement achieved? 
We stood strong in the face of rumor and innuendo that if Buffalo/Erie gets more, rates would rise and jobs would be lost.  We told the truth about this once in every fifty year opportunity. We knew that if we did not fight to get our fair share now, there would be no tomorrow. We demanded that NYPA treat Buffalo/Erie as a significant stakeholder and substantiate their claim that they would have to raise rates by opening their accounting books. We ignored those who believed that this community is undeserving of reinvestment. We educated neighbors to the fact that the Niagara Project was not built to subsidize NYPA waste and inefficiency, but to harness the unique natural resources of our region as an economic development and life quality resource. 

We called this the seminal issue for our time and for our future. You and thousands of others joined with me in this fight for a fair and equitable settlement. I am grateful for the strong support of the many cities, towns, villages, elected officials, labor, community, civic and business leaders who fought with us. I am grateful to the strong support from U.S. Senators Schumer and Clinton whose longstanding commitment to Buffalo and to re-energizing the waterfront is clearly evident. Without their influence to bring all parties together to craft a settlement, this deal would not have happened.