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"They took our hydropower!"

Louis Oliveira
via Flickr
The majority of electricity generated by Niagara River/ Falls hydropower is not allocated locally.

Hydropower is much cheaper than other forms of electricity. It’s mostly set aside for economic development. Businesses vie mightily for it. A Buffalo News study five years ago showed it saved New York businesses more than $180 million a year.   

At dinner last week with mostly strangers some guy I barely know went off about how cheap upstate hydropower was unfairly and disproportionally sold to New York City. The swiftly moving Niagara River is located here, he argued, shouldn’t “we” enjoy its benefits?

But wait, I told him, a new piece of legislation was signed by Governor David Paterson last week that attempts to create more of a fair balance.  Currently, only one-third of that power stays locally.

Okay, he said, we’ll see.

And so, it is with slight embarrassment this morning that I read this story in the Buffalo News.

In all likelihood, [the law’s] impact will be far less that what politicians have contended…

The politicians who wrote the law claim the new measure will translate into an additional $14 million in hydropower staying upstate.  Not so fast, says the New York Power Authority, according to the aforementioned Buffalo News article. Under their interpretation of the law, $5.7 million in hydropower will be shifted Upstate.

That’s a big difference. How could the law’s authors be $9 million dollars off?

Turns out, there’s a 2005 law that sets aside money from the sale of the first 70 megawatts of unused hydropower to pay for something called the Energy Cost Savings Benefit program. If that weren’t the case, upstate would actually get $14 million in hydropower.  But as it stands, the is left with $5.7 million

The Power Authority is adamant the new measure has no effect on the 2005 law. Now local politicians, who just last week were heralding the new allocation of hydropower as a seismic shift in the economic development landscape for upstate, are calling for fixes to the law during next year’s legislative session. 


Next: tomorrow there’s a public hearing about the possible allocation of 15 megawatts of hydropower for phase II of Yahoo’s Data Center in Lockport. Yahoo has been clear about the fact that it “chose” Upstate New York with the understanding it would enjoy cheap hydropower. Phase I of the project will run on 10 megawatts that the Internet giant negotiated when local economic development folks were trying to lure them to locate here.

That might not sound like a lot of power, especially when the Lewiston plant on the Niagara River generates 695 megawatts of hydropower a year.  But only 30 megawatts are are unallocated right now. If 15 of those go to Yahoo, there’s not much left unspoken-for. It’s like the slow dance at prom when all the girls and guys have paired up and the pickings are getting slim. 

WBFO/Western New York reporter for the Innovation Trail.