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NYPA trustees approve low-cost hydropower allocation to Alita USA Holdings to build new facility in Buffalo

by jmaloni


Thu, Sep 26th 2013 11:30 am

Allocation supports $102 million capital investment project creating 172 jobs

The New York Power Authority board of trustees on Tuesday awarded a low-cost hydropower allocation of four megawatts to Alita USA Holdings, a steel manufacturer planning to build a 340,000-square-foot pipe mill in Buffalo. The $102 million project would create 157 jobs at the company's Western New York facility and another 15 jobs at a new corporate administrative office to be based in New York.

"Alita USA Holdings would be a welcome addition to Buffalo," said John R. Koelmel, NYPA chairman and an East Amherst resident. "Western New York is making great strides under the leadership of Gov. Cuomo toward advancing economic development, including the manufacturing sector. The substantial capital investments and new jobs from Alita's pipe mill would be of enormous benefit to the region, and a credit to the coordinated efforts of state and local governments."

"Niagara's hydropower is one of the most effective economic development tools for the Buffalo-Niagara region, with tens of thousands of jobs directly tied to the low-cost allocations of power," said Gil C. Quiniones, NYPA president and CEO. "The plans by Alita for the construction of a new pipe mill plant, in return for the hydropower and other government incentives, are a sign of the significant progress under way through Gov. Cuomo's innovative measures for turning around the area economy."

In addition to the low-cost hydropower, NYPA, Empire State Development and the Erie County Industrial Development Agency are in the process of developing an incentive package of roughly $10.4 million in grants and tax credits in support of Alita's Buffalo facility. This includes a $2 million award recently recommended by the Western New York Power Proceeds Allocation Board that the NYPA trustees will consider after a required state environmental review.

"Buffalo's steel-making history is setting the stage for a future success story," said Empire State Development President, CEO and Commissioner Kenneth Adams. "Alita USA is focusing on this area to locate a $102 million steel manufacturing facility because of the talented workforce, location and infrastructure. Now we are being rewarded with 157 well-paying jobs. 'Steel Jobs Coming to Buffalo' - that's a headline that makes all of Western New York proud."

"In order to drive the Western New York economy and to keep New York on the map as a national leader, it is important that we bring new companies to the area," said State Sen. George D. Maziarz. "Alita will create an estimated 157 jobs in Western New York, and I am pleased of the support they are receiving from the New York Power Authority. A new company creating new jobs is exactly what this region needs to continue its economic development and growth."

In addition to new permanent jobs once the facility is operational, the capital investments by the company are expected to support numerous construction jobs in the region. Local contractors will be needed for the construction of the mill, the installation of the equipment and the purchase of supplies. Work will also be generated for local electrical, mechanical, hydraulic and machine shop contractors, transport companies and their related fuel, maintenance and other suppliers.

The low-cost hydropower to Alita will be provided under a seven-year contract, with the allocations drawn from a block of electricity, known as replacement power, generated at NYPA's Niagara Hydroelectric Power Plant.

Under state law, allocations of power to Western New York businesses from the Niagara plant are for firms within a 30-mile radius of the hydroelectric facility, or in nearby Chautauqua County, at a price that is currently more than 40 percent lower than wholesale market electricity in the region. The hydropower is linked to tens of thousands of jobs at more than 100 businesses in the region with a combined payroll of more than $2 billion.

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