Lewiston rejects Power Authority $1 billion offer

Lewiston monies to be placed in escrow

by Mark S. Zito
Executive Director
Niagara Power Coalition
Lewiston Porter Sentinel, November 20, 2004

Editor’s Note: Continuing from last week’s Sentinel report by Larry Austin on the state Power Authority relicensing agreement, which briefly revealed that town of Lewiston Supervisor Fred Newlin, acting on behalf of the town, decided at this time to reject the Power Authority’s settlement package that all other Niagara Power Coalition members accepted, the following summary furnished by Mark Zito of the Coalition, outlines the specifics of what Lewiston turned down.

Opportunity was extended this past week to Newlin to comment further on his reasons for rejecting the pact; however a statement was not available as today’s Sentinel went to press. Look for Newlin’s response, in next week’s issue.

We’ve struck a once-in-a-lifetime $1 billion deal with the New York Power Authority that will provide a tremendous benefit to Lewiston and the surrounding areas for the next 50 years. Despite criticism from the Lewiston Town Board with the exception of Councilman John Ceretto, this windfall agreement has been embraced by members of the local Coalition as a victory for our future. In particular, the town of Lewiston residents will benefit in several ways:

1.) The town of Lewiston was the only Coalition member that was granted a block of low-cost power for use by its residents. This block of approximately 2.5 Megawatts amounts to a savings for Lewiston residents of $1 million per year for the next 50 years. Amazingly, Lewiston did NOT accept this power.

Money Offer Rejected

2.) It was agreed that Lewiston will get $42,500,000 in cash over the next 50 years, amounting to $850,000 per year. Lewiston can spend this money any way it wants. It can use the money to lower taxes, fund the library, improve drainage, fight the onslaught of hazardous waste -- anything it wants. This was the highest cash award granted to any of the settlement partners. And yet again, Lewiston voted NOT to accept this money.

3.) Lewiston was offered $25,500,000 for recreational programs over the next 50 years, amounting to $510,000 per year. This money can be spent on projects such as the Lewiston waterfront, the Sanborn Farm Museum, and park development. It is the highest amount offered any municipality or school district, and yet Lewiston did NOT accept it.

4.) Lewiston was offered $1,360,000 in up front cash to just sign the agreement which will allow the Power Authority to operate another 50 years. Yet again, Lewiston has decided to stand on the sidelines and not join the settlement package.

When you compare Lewiston’s total deal with what the city of Niagara Falls, the town of Niagara and Niagara County are receiving, there is no comparison. On a per capita basis, town of Lewiston residents are getting more than double what the residents in the city of Niagara Falls are getting, and more than seven times what residents across the county are getting.

“All or Nothing” Approach

We can only assume that Lewiston has taken an “all or nothing” approach to negotiations. That may not be a wise course of action. The Coalition consists of seven members: town of Lewiston, town of Niagara, city of Niagara Falls, Niagara County, Lew-Port School District, Niagara Wheatfield School District and Niagara Falls City School District.

Needless to say, no one got everything they wanted. Everyone came to the table with legitimate reasons why they needed and deserved more than they got. However in the end, compromises were reached and the members settled, knowing full well that everyone was way ahead, especially considering that the Power Authority wasn’t under any legal obligation to give us anything.

Lewiston says it’s holding out for more low-cost power. However, there are three things that Lewiston residents should consider:

1.) The promise of free power is misleading. Power will never be free because Niagara Mohawk will still charge to deliver it to everyone’s home, and the cost of delivery is half of your power bill. As it stands now, if Lewiston accepted the power it had been granted, the average homeowner would see a reduction of about 15-20 percent. That’s better than nothing.

2.) It has been agreed that if more power becomes available, Lewiston will be the first in line to get it. Hopefully, residential bills can be decreased even further.

25 Megawatts Offered

3.) The Power Authority gave the local municipalities and school districts a total of 25 Megawatts of power to divide up as they saw fit. This is much less power than we fought for. However, the consensus was to use the 25 MW of power to cut local government and school district costs. So, all of the local governments and schools took what they needed to run their buildings. Whatever was left was split between Lewiston’s residents and for commercial development in Niagara Falls. Again, Lewiston felt that division was unfair and is demanding more power, even though there wasn’t any left to divide up.

It is interesting to note that when you combine what the town of Lewiston and Lew-Port Schools are receiving from this settlement package, it amounts to nearly 47 percent of the entire $1 billion package, on a per capita basis. The other five governments and school districts will split the other 53 percent.

There were differences about how much Lewiston deserved in this process, yet it got the most.

However, what Lewistonians should remember is that the Power Authority sits not only in Lewiston, but is also in Niagara Falls and the town of Niagara. Moreover, all of its non-taxed property sits in Niagara County, which loses $15 million per year in lost property taxes. All of the Coalition members deserved to get something.

Intense Debate

The debates and the discussions around the table were intense. This was not an easy settlement to reach. Everyone knew they couldn’t have it all, so they compromised and promised to work together for the benefit of the entire area.

In the end, success was achieved, and for the first time in history, the Power Authority will be compensating local governments and schools for the property it sits on. This is desperately needed and couldn’t have come at a more opportune time.

If Lewiston doesn’t vote to accept its cash and power, it will be held indefinitely in an escrow account. The other partners will receive their share.

Meanwhile, the vast majority of our Coalition members believe our future has been brightened. Our hopes have been bolstered. We have finally negotiated a deal that will allow us to enjoy the bounties that have been denied us for so long.

It is my sincere hope that Lewiston accepts this deal, so we can move forward with the Power Authority with confidence and a new spirit of cooperation.