Constituent Services
Higgins Calls for Transfer of Wacker Power to Local Industry
February 10, 2006
NYPA Should Give 37 Megawatts from Lost Wacker Deal to Provide Greater Access to Region’s Competitive Advantage for Business Retention and Recruitment
 
Buffalo, NY—Today, Congressman Brian Higgins (NY-27) called for the New York Power Authority (NYPA) to transfer the 37 megawatts of hydropower, designated by NYPA for the failed Wacker Chemical Corporation deal, to local industry in Niagara, Erie and Chautauqua Counties.  Specifically, Higgins proposed to use the 37 megawatts for auto industry based in Western New York, ensuring that they are as cost competitive as possible thereby providing greater access to this region’s unique competitive advantage for business retention and recruitment.  Higgins was joined by UAW leaders and members at the UAW Local 897 in Woodlawn.
 
According to the NYPA website, “NYPA provides the lowest-cost electricity in New York State and is the only statewide electricity supplier.  Our economical electricity, already linked to more than 400,000 jobs statewide, will make the difference between jobs growing or going elsewhere.”  
 
Higgins stated, “The local auto industry is an obvious example of where the NYPA pledge to make the difference between jobs growing or going elsewhere can be put to its highest and best use.”  As of the most recent Economic Census (2002), the auto industry and the auto parts industry employed 16,699 persons in the Western New York region – fully half of the auto industry employees in all of New York State.
 
On Thursday, Higgins sent a letter to NYPA Chairman Joseph Seymour, requesting that the 37 megawatts of power from the failed Wacker deal be set aside exclusively for use in the Buffalo-Niagara region at the direction of a locally controlled entity, such as the Industrial Development Agencies in Erie, Niagara and Chautauqua Counties.  In his letter, Higgins asked Chairman Seymour of the “next steps needed to be taken to ensure that the power offered to one company who will not be moving here is earmarked and easily available to the auto industry as well as other job creating businesses in the new economy that will stay and will grow in Buffalo-Niagara.” 
 
Letter to NYPA Chairman Seymour attached.

February 9, 2006
 
Joseph Seymour, Chairman
Board of Trustees
New York Power Authority
1234 Main Street
White Plains, New York 10601
 
RE:  Allocation of 37 Megawatts to Buffalo – Niagara Region 
 
Dear Chairman Seymour and NYPA Trustees:
The recent announcement that the inability to commit 70 megawatts to Wacker Chemical Corporation cost this region 1,000 new jobs was inexplicable and incredibly disappointing.  It appears that the Buffalo-Niagara region was hurt on this project, an on others, by the inability to respond in a fast and decisive manner.
However, this situation does present an opportunity for the Buffalo-Niagara region to earmark the power NYPA identified and offered to this project which will help us bolster our regional economic strength. 
I am writing to request that the 37 megawatts of power be set aside exclusively for use in the Buffalo-Niagara region at the direction of a locally controlled entity, such as the Industrial Development Agencies in Erie, Niagara and Chautauqua Counties, so that  when opportunities like this arrive in the future, local stakeholders can respond expeditiously and appropriately.   
 
Collaborating on behalf of a region deserving and demanding better from all of us is certainly in keeping with the information provided on the NYPA website where all can read that “Economic development is a top priority for the New York Power Authority, America’s largest state-owned public power enterprise. We provide the lowest-cost electricity in New York State and we’re the only statewide electricity supplier.  Our economical electricity, already linked to more than 400,000 jobs statewide, can make the difference between jobs growing here or going elsewhere.” 
 
The local auto industry is an obvious example of where the NYPA pledge to make the difference between jobs growing or going elsewhere can be put to its highest and best use.  As of the most recent Economic Census (2002), the auto industry and the auto parts industry employed 16,699 persons in Erie and Niagara Counties – that is fully half of the auto industry employees in all of New York State.  The average annual payroll per employee in the auto and auto parts industry in Erie and Niagara Counties is $54,476.
These are more than statistics; these are good paying jobs that are irreplaceable.  These numbers represent the families and the futures of the current employees and its retirees, the tax base of the communities where Delphi, Ford, GM and American Axle are located and those businesses dependent on the economic spin-off from those who purchase services and pay their bills because they receive a paycheck from the auto industry. 
 
It is my understanding that the nature and the competitiveness of the automotive industry require addressing the urgent short-term challenges as quickly and efficiently as possible, by increasing investments in fast growing markets and speeding up the product development process. All of which must be accomplished while reducing manufacturing costs.  If the auto industry cannot be cost competitive, the future of the business here in Western New York is at risk as management systematically analyzes where future investments dollars will be spent. They look for the most cost competitive, efficient and capable plants that continue to become more and more efficient.
 
The challenge now is to become as cost competitive as possible and so every competitive advantage must be made available locally. And, what a competitive advantage this region has with access to the cheapest, cleanest hydropower in the country, and perhaps in the world.  With the support of the Governor, NYPA and all appropriate parties, the value of this local, natural asset will increase with our ability to better control and direct its benefits.  The 37 megawatts is an important first step in providing greater access to this region’s unique competitive advantage for business retention and recruitment. 
 
The issue of power alone may not be the answer to every problem facing this industry but it can be the difference in jobs growing or going elsewhere.  Incentives should not be awarded based solely on the promise to use increased power, nor should incentives drive rates up for those who are not part of such programs.  The development of criteria to ensure local companies receive low-cost power is critical to ensuring greater economic growth in the Buffalo-Niagara region and our ability to compete more aggressively in the global marketplace.  Programs should be based on those, like the auto industry, that create community wealth, provide environmental and economic benefits and pay a living wage.  
 
Let’s act now and not react after announcements are made elsewhere to close and downsize plants locally. Nothing is more important to the economic future of Buffalo-Niagara than keeping the 37 megawatts rejected by Wacker as “too little, too late” in the region that needs “so much and now.”
 
I look forward to your response as to what next steps need to be taken to ensure that the power offered to one company who will not be moving here is earmarked and easily  available to the auto industry as well as other job creating businesses in the new economy  that will stay and will grow in Buffalo- Niagara.  
 
Sincerely,

Brian Higgins
MEMBER OF CONGRESS

 
 
Washington, DC Office
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