Lew-Port hears on Power Authority funding

Lewiston Board members not happy with arrangement

by Larry Austin
Lewiston Porter Sentinel, November 13, 2004

Last Tuesday, the Lewiston Porter Board of Education heard a detailed account of the Niagara Power Coalition’s deal with the Power Authority and what the school could expect from its slice of the pie.

Mark Zito, executive director of the Niagara Power Coalition, told the Board of Education that the coalition’s $1 billion agreement with the New York Power Authority would net the school district roughly 14 percent of the agreement, which is divided into three different funds.

Community Fund No. 1 is a one-time payment of $8 million to the coalition, of which Lew-Port would receive $1,120,000.

Community Fund No. 2 is based on 24 megawatts of power and is spread out over 50 years. Lew-Port stands to make $725,000 a year for 50 years, a possible total of $36,250,000.

A recreation fund of $150 million over 50 years would net the school district $420,000 a year, or $21 million, a share of 14 percent of the fund.

A fourth fund is power allocated by municipal usage.

Zito said the community has gone a long time without any funding from NYPA, and in fact, there is a law that says NYPA is not allowed to make payments in lieu of taxes for support of regimenting its Niagara or St. Lawrence plants. Zito also said the Niagara Frontier lost 17,000 jobs in first five years after the Niagara Power Project opened in 1957 and saw a 33 percent increase in the cost of power and the loss of taxable land.

60-40 Split

The seven members of the Niagara Power Coalition, who have negotiated over the last 10 years as NYPA is facing a 50-year re-licensing of its plant, decided that they would divide the funds 60-40 between school districts and townships.

Details must still be ironed out, such as building in what Zito called “heighteners” that will increase the fund in case the cost of power goes up. Another is a seven-year revisitation, which will “make sure what’s supposed to be happening is happening,” Zito said.

“We’re not going to sign any sheet of paper until all the details are done, as a group,” Zito said. The Coalition would express support for a deal, and then work on the details, he explained.

An agreement must be done before Jan. 27, Zito said. Only then can the Power Authority send in a draft application to the Federal Energy Regulatory Commission.

When will the coalition get the money?

“In Massena, they signed an agreement and 90 days later they paid the advance, which was $4 million,” Zito said, though stressing that the agreement involving the St. Lawrence plant may not apply to Niagara.

The coalition members met and agreed to split the funds 60-40 between townships and school districts.

Community Fund No. 2 of $250 million is based on 24 megawatts of power, Zito said, which would generate the fund and pay a minimum of $5 million a year over the 50-year life of the agreement. The district gets the excess of profit from the sale of the megawatts.

Potential for Growth

“So it’s possible that particular fund right there could grow to double, triple, whatever, over the course of 50 years if the cost of hydropower was to increase and their cost was held at a kind of minimum,” Zito said.

He added that Lew-Port Assistant Superintendent for Administrative Services Donald Rappold “kept screaming” for an index adjustment to the agreement.

“Don just kept on saying, ‘We need to have a way to grow this thing,’” Zito said. “So using some creativity, we said, ‘How about on the price of power? We’ll grow it on the price of power.’ NYPA went for it. So that’s Don’s contribution right there. He really does deserve a hand because in the long run, I think that’s probably going to mean that the fund grows a lot. Like Don would say, $500,000 today isn’t going to be the same thing 50 years from now.”

Lew-Port stands to receive 14.5 percent of the coalition’s share of Community Fund No. 2, which Superintendent of Schools Dr. Whitney Vantine negotiated with the Niagara Falls City School District, whose share dropped from 14 percent to 13.5 percent.

“At the last minute, he negotiated and got a half a point for Lewiston Porter Central School district at the 11th, or maybe even 12th, hour of negotiation,” Zito said of Vantine’s efforts. “He did a pretty good job there and he should be commended.”

The Recreation Fund is $150 million of money over 50 years restricted to “greenway initiatives,” Zito called them, in a 40-mile park system. The projects would have to be approved by NYPA and a commission.

The fourth fund is based on power usage and is under study to see who uses how much power, Zito said. It includes 25 megawatts of power with a value of $589 million and divided in a way consistent with the coalition’s wishes, which Zito said is first to lower rates for taxpayers for municipal use of power. Zito said the coalition is looking into the possibility of being paid for unused megawatts.

Kilmer, Langlois Not Happy

Town of Lewiston Councilmen Dan Kilmer and James Langlois were unhappy that the town of Lewiston, home of the largest chunk of NYPA land, would receive three megawatts as the deal stands now, while the city of Niagara Falls would receive seven.

The town asked the board to go back to the table and “divide power the same way you divided the money.” It would give the school over three megawatts instead of the .866 megawatts they would receive under the present plan, Kilmer said. The town would then pay the school cash for their 2.6 megawatts of unused power, he added.

Both entities, the school and town, represent the same residents, Kilmer said. When Kilmer said the board was fighting for reduced residential electric bills, Zito said town of Lewiston Supervisor Fred Newlin told the coalition that the town was more interested in receiving money than in receiving megawatts.

“I’m sorry you have to learn about it this way,” Zito told Kilmer. “But that is exactly why your supervisor asked for all the money, and he said, ‘My constituents will not understand megawatts. They’ll understand cash.’”

The town residents should receive enough megawatts to reduce electric rates by 30 to 40 percent, or seven megawatts of power, Kilmer said. He called the allocation of power to the city and county “lopsided.”

Vantine said the school’s stance was that they wanted their power covered.

“And we said that very clearly,” Vantine said. “We didn’t want extra power. We didn’t want to get into the selling of power business. We want our power taken care of. That’s all.”

“If you have a vote that yields the community more megawatts, why would you not wield it to help the taxpayer,” Kilmer asked Vantine.

“Because Dan, to be perfectly frank with you, I’m hired by the Lewiston Porter School District to negotiate for Lewiston Porter schools,” Vantine said. “Not the town of Lewiston.”

School districts were also excluded from township meetings, he noted, and Lew-Port did not get everything it wanted either, such as more up front money for recreation. The town also did not support the school’s recreation plan, and shot it all to heck,” Vantine said.

Zito said the coalition will not revisit old deals, and the NYPA will not involve itself in internal arguments in how to split the money.