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Congressman Higgins Submits Formal Proposal to Claim NYPA Profits for WNY

Jun 15, 2009
Press Release

Today, Congressman Brian Higgins (NY-27) submitted a formal proposal to Governor Paterson and the New York Power Authority (NYPA) requesting 36% of the net revenue produced by the Niagara Power Project be devoted to economic development and tourism efforts in Western New York, including moderately-priced waterfront housing on Buffalo's Outer Harbor for the first time in the city's history.

“This community must stand-up and claim what is naturally ours,” said Higgins. “Like Florida profits from its sunshine and California profits from its Pacific surf, Western New York must demand our right to benefit from our lake that feeds our river which generates the power produced by Niagara Falls,” said Congressman Higgins.

Last year alone NYPA had a surplus of $309 million, over 75% of which is directly attributable to the Niagara Power Project here in Western New York.    NYPA’s own study found that only 14% of the economic benefit from the Niagara Power project currently remains in the WNY region.

“For far too long profits generated by our hydroelectric plant have been used to subsidize the waste and abuse of NYPA as evidenced by reports of private jets and hefty bonuses,” Higgins added.  “We need to stand up as a community and say those days are over.  Niagara Power Project profits should be invested here on projects that will grow our regional economy, create jobs, encourage tourism and generally improve our quality of life.”

Under Congressman Higgins’ proposal WNY would receive approximately $65 million or more each year.  Those NYPA profits would benefit economic development and cultural projects in Erie, Niagara, Chautauqua and Orleans Counties.  In the first 5 years the fund would include support for some specific projects including:

the creation of a new, moderately-priced neighborhood on Buffalo's Outer Harbor, Inner Harbor development, the Buffalo Niagara Medical Campus, the Darwin Martin House, the Buffalo Zoo, Albright Knox Art Gallery, Buffalo Olmsted Parks, Buffalo Museum of Science's Tifft Nature Preserve, Frank Lloyd Wright Graycliff, and the H.H. Richardson Complex.  Using a federal formula which calculates 42,000 jobs for every 1 billion in funding, Congressman Higgins proposal could create over 14,000 jobs in first 5 years. 

In April Congressmembers Higgins, Chris Lee, Steve Israel, Carolyn Maloney and Eric Massa introduced a bill (HR2133) in the House of Representatives that would require the New York Power Authority to direct into a special fund profits from the sale of unused energy that was allocated for Western New York industries for Western New York projects.  Although Higgins hopes the Authority will agree to support his proposal without the need for legislative action. 

In March Congressman Higgins condemned the sweep of $306 million in NYPA funds to the State's general fund which he points out “took more resources out of Western New York in one day then the Niagara Power Project's relicensing settlement will invest here in fifty years.” 

In July of 2005 Congressman Higgins filed a complaint with the Federal Energy Regulatory Commission (FERC) objecting to the re-licensing process driven by the New York Power Authority and dismissing their original offer $2 million per year.  After a long and hard fight, Western New York won $279 million settlement, nearly three times the original offer, which is now being used to finance Buffalo’s waterfront development. 

“A walk along Buffalo’s inner harbor gives us a glimpse of the great things possible when we reinvest our energy profits back into our community,” Higgins said.  “With an annual dedication of millions the potential is limitless.”

Below is a copy of Higgins’ letter and proposal:

June 15, 2009

Hon David Paterson
Governor of the State of New York
The Capitol
Albany, NY 12224

Richard M. Kessel, President/CEO
New York Power Authority
123 Main St.
White Plains, NY 10601-3170

Re: NYPA and Western New York

Dear Governor Paterson and President Kessel:

I write today to propose specific action which the Board of Trustees of the New York Power Authority (NYPA) can take at your direction and under your leadership to address the long-standing grievance of Western New Yorkers that too little of the benefit from the Niagara Power Projects remains in the host community. 

The actions I propose would have the effect of:
• Creating approximately 14,000 direct construction and supply jobs over a five-year period.
• Tangibly increasing the property-tax base of the City of Buffalo by driving private-sector waterfront development and attracting more families to choose to live in the City.  Merely the first phase of ninety moderately-priced homes on the Outer Harbor would result in approximately $2.3 million in local property tax revenue over five years.  Development of this sort would, over time, significantly reduce municipal dependence on extraordinary state assistance.
• Fostering significant cultural resources which leads to increased revenue from tourism and the retention and attraction of a high-talent and creative regional workforce.

While we in Western New York would argue that the Niagara Power Project should rightly be considered a local asset in its entirety, we recognize that that argument may not be universally accepted across the state.  What is universally accepted, however, is that the Replacement and Expansion Power programs made possible by the Niagara project were clearly and exclusively intended to benefit of Western New York. 

For a host of economic and technical reasons, however, substantial amounts of Replacement and Expansion Power have gone unused and have been monetized by the Authority and taken out of Western New York.  This helps explains why the Niagara Project produced $204,712,000 in revenues in excess of expenses in 2008.  To address this expropriation of wealth from our community, I respectfully propose that the following measures be taken by the NYPA board under your leadership:

1) That henceforth 36% of the revenues in excess of expenses from the Niagara Power Project (roughly the proportion of the plant’s firm production capacity attributable to the Replacement and Expansion Power programs) be devoted to a newly-established the Western New York Economic Development Fund.
2) That the first five years of this fund be used to finance the specific projects on the attached project schedule.
3) That a commission of local elected leaders, business leaders and other stakeholders be empanelled to distribute the proceeds of this fund after the initial five-year period.

Thank you very much for your consideration and your leadership on this important issue.  The resources to rebuild Western New York are available right here in Western New York, if only we work together to stop their continued expropriation from our community.

Sincerely,


Brian Higgins
Member of Congress

Proposed First Five-Year Schedule of Projects to be Funded by the
Western New York Economic Development Fund
(To be derived from 36% of the revenues in excess of expenses from the Niagara Power Project)


Year-Project-Amount-Immediate Construction/ Supply Jobs
2009-Outer Harbor Residential Development Site Preparation Fund-$7,000,000-294 jobs
2009-Small Boat Harbor/Gallagher Beach Capitalization-$10,000,000-420 jobs
2009-Niagara County Initiatives-$25,000,000-1050 jobs
2009-Orleans County Initiatives-$500,000-21 jobs
2009-Chautauqua County Initiatives-$500,000-21 jobs
2009-ECHDC Inner Harbor Work-$15,000,000-630 jobs
2009-City of Buffalo Downtown Mixed-Use Development Fund-$5,000,000-210 jobs
2009-BNMC Fund for the Commercialization of Life Sciences Research-$2,000,000-84 jobs
2009-TOTAL-$65,000,000-2730 jobs
 - --
2010-Completion of Darwin Martin House- Art Glass, Furniture, Landscape-$12,000,000-504 jobs
2010-Niagara County Initiatives-$25,500,000-1071 jobs
2010-Orleans County Initiatives-$510,000-21 jobs
2010-Chautauqua County Initiatives-$510,000-21 jobs
2010-ECHDC Inner Harbor Work-$15,500,000-651 jobs
2010-BNMC Fund for the Commercialization of Life Sciences Research-$5,000,000-210 jobs
2009-City of Buffalo Downtown Mixed-Use Development Fund-$5,000,000-210 jobs
2010-Outer Harbor Public Open Space Maintenance & Programming Fund-$2,000,000-84 jobs
2010-TOTAL-$66,020,000-2773 jobs
 - --
2011-Buffalo Zoo Arctic Edge Grizzly and Polar Bear Exhibit-$18,131,000-762 jobs
2011-Niagara County Initiatives-$26,010,000-1092 jobs
2011-Orleans County Initiatives-$520,200-22 jobs
2011-Chautauqua County Initiatives-$520,200-22 jobs
2011-BNMC Fund for the Commercialization of Life Sciences Research-$5,100,000-214 jobs
2011-Outer Harbor Public Open Space Maintenance & Programming Fund-$2,040,000-86 jobs
2011-Recapitalization of Erie County Parks Riverwalk-$5,500,000-231 jobs
2011-ECHDC Inner Harbor Work-$9,500,000-399 jobs
2011-TOTAL-$67,321,400-2827 jobs
 - --
2012-Albright Knox New Space (partial funding)-$23,500,000-987 jobs
2012-Construction of New Golf Course and Restoration of South Park-$10,000,000-420 jobs
2012-Niagara County Initiatives-$26,530,200-1114 jobs
2012-Orleans County Initiatives-$530,604-22 jobs
2012-Chautauqua County Initiatives-$530,604-22 jobs
2012-BNMC Fund for the Commercialization of Life Sciences Research-$5,202,000-218 jobs
2012-Outer Harbor Public Open Space Maintenance & Programming Fund-$2,080,800-87 jobs
2012-TOTAL-$68,374,208-2872 jobs
 - --
2013-Recapitalization of Bflo. Museum of Science's Tifft Nature Preserve-$15,500,000-651 jobs
2013-Frank Lloyd Wright Graycliff Estate Interior Work & Historic Landscape-$6,500,000-273 jobs
2013-H.H. Richardson Complex Restoration  (partial funding)-$12,000,000-504 jobs
2013-Niagara County Initiatives-$27,060,804-1137 jobs
2013-Orleans County Initiatives-$541,216-23 jobs
2013-Chautauqua County Initiatives-$541,216-23 jobs
2013-BNMC Fund for the Commercialization of Life Sciences Research-$5,306,040-223 jobs
2013-Outer Harbor Public Open Space Maintenance & Programming Fund-$2,122,416-89 jobs
2013-TOTAL-$69,571,692-2922 jobs

5 YEAR TOTAL (2009 – 2013)
TOTAL INVESTMENT IN WNY: $336,287,300
TOTAL JOB ESTIMATE: 14,124