ALBANY – The state’s public power company has raised costs for consumers while regularly bailing out the state budget, having a payroll with 35 percent of its staff making more than $100,000 a year and employing three full-time pilots and several travel services workers, the state comptroller said Thursday.
Comptroller Thomas DiNapoli warned that the core mission of the New York Power Authority – assisting with economic development and providing low-cost power from the Niagara and St. Lawrence rivers and other areas – has been weakened by the financial decisions of the agency and the state.
Over the past decade, governors and lawmakers have turned to NYPA’s bank account to provide $1.16 billion to the state’s general fund to help with everything from closing deficits to funding programs the state otherwise might not have enough money to create, were it not for the NYPA money.
The core mission of NYPA, created in 1931 as the nation’s largest public utility company, “may be hindered by the state’s repeated use of the authority’s resources for budget relief and other purposes,” a report issued by DiNapoli noted.
NYPA officials shot back at DiNapoli, saying his report contained a number of errors that would have been caught had the comptroller’s office spoken with NYPA while doing the report. They said DiNapoli was wrong in claiming the diversion of NYPA money to the state has had any effect on electricity rates charged by NYPA.
NYPA, which had $2.8 billion in annual revenues from its 16 generating facilities – including the Niagara Power Project – and the more than 1,400 miles of power transmission lines it owns, has a board of directors, but every governor for decades has ultimately controlled the entity. In this year’s budget, $90 million was moved from NYPA’s budget to the state’s budget.
In all during the past decade, DiNapoli said, 4.2 percent of NYPA’s revenues have gone to helping governors and lawmakers balance the state’s books.
NYPA has endured a long history of criticism over spending practices, and DiNapoli’s new report was no exception. He portrayed it as an agency with a relatively large number of high-paid executives on its 1,636-person payroll. He said 35 percent of the staff makes more than $100,000, compared with 14 percent of employees at other state authorities. At NYPA, 58 people make more than $150,000.
Besides paying into the state pension system on behalf of its employees, NYPA also offers a 401(k) program for which employee contributions are matched in part by the authority. That program alone cost $2.4 million last year.
The staff includes three full-time pilots and three people who coordinate travel plans for NYPA officials. The agency owns one plane, which it purchased in 2007 for $6.4 million.
FlightAware, a flight tracking company, shows that NYPA’s plane, a twin-engine, turboprop Beechcraft, had about 325 flights last year. Since July 26, it shows the plane flew 18 times, mostly between the agency’s White Plains headquarters and Niagara Falls, Massena and an airport in Oneida County – airports near NYPA facilities.
DiNapoli noted that NYPA last year received a 10.7 percent increase on its power transmission charge that before the increase brought in $165 million to NYPA. Those charges eventually get passed along to consumers.
“The state regularly relies on NYPA for budget relief, which could pose future challenges for NYPA’s ability to deliver low-cost power,” DiNapoli said in a written statement. “New Yorkers pay some of the highest electricity rates in the country and need the rate relief that NYPA could provide it if appropriately focused its resources.”
NYPA, in a written statement, said the comptroller’s report “misinterprets key facts and ignores reforms” instituted over the past two years. Officials said the amount of money NYPA has provided to the state’s general fund has sharply dropped since 2011, and that other public power companies around the nation also provide funds to their state governments.
The agency defended its air travel program, saying its eight-passenger plane has been invaluable in getting engineers and other personnel to its far-flung and hard-to-reach facilities and transmission lines, such as far northern New York, where commercial air service is spotty. The plane is used only after a cost analysis is done before each flight, said NYPA, which added that it also employs a travel desk to enforce government-rate fares for employees and contractors.
The agency, which also used to give out annual bonuses to employees, defended its salary structure, saying it is in line with other large public power utilities in the nation and needed to attract and retain skilled employees.
NYPA is a major force in Western New York’s economy – thanks in part to the low-cost hydropower it supplies more than 100 businesses under a decades-old agreement that makes the electricity available to entities within a 30-mile radius of the Niagara Power Project. Besides direct cash grants it makes for economic development projects, nearly 700 megawatts is allocated under the Expansion and Replacement Power programs for eligible users, which include a host of big and small companies in the region that can buy electricity for about 40 percent less than wholesale price.
NYPA says tens of thousands of area jobs are at companies getting the low-cost power.
NYPA has also been headed by a number of Western New York residents over the years, including its current chairman, John Koelmel, the former chief executive at First Niagara Financial Group
Rep. Brian Higgins, D-Buffalo, who has long tussled with NYPA over the flow of economic development money and power for Western New York, says he is sensing a new attitude by top NYPA officials.
What is eroding, he said, is the long-held NYPA view that the Niagara Power Project, which he said accounts for 76 percent of NYPA’s profits, is a statewide-only asset.
“It’s not because it can’t be located anyplace in New York. It’s located in Western New York for one reason: because our natural resources make it possible,” Higgins said.
The congressman said he has held discussions with NYPA’s leadership and believes the agency will be putting more money into economic development projects in Western New York. He declined to identify potential investments but said deals could come together in the coming months. “I think there is new leadership at NYPA that recognizes it has a greater obligation to the Buffalo Niagara region,” he added.