GOP lawmakers continue criticism as Collins seeks Cuomo probe
Power Authority faces more pressure
Two more Republican lawmakers Friday charged that the Legislature’s February vote to help balance the state budget with New York Power Authority funds has resulted in upstate rate hikes, and they joined State Sen. George D. Maziarz, R-Newfane, in demanding NYPA’s two local representatives resign.
In addition, Erie County Executive Chris Collins is asking Attorney General Andrew M. Cuomo to investigate the Power Authority’s decision to raise rates while at the same time giving raises to authority employees.
“I knew this was not just excess cash from the Power Authority, and now my worst fears have been realized,” said Assemblyman James P. Hayes, R-Williamsville. “Despite what the Power Authority trustees say, I’m outraged by the whole thing.”
“The people of Western New York have been lied to,” added State Sen. Michael H. Ranzenhofer, R-Amherst. “When the Democrats swept [hundreds of] millions of dollars from the NYPA accounts in February, they said it would not have an impact on rates for customers. Obviously this was not true.”
Legislators from both sides of the aisle were either demanding answers or explaining their votes Friday after the Feb. 3 Legislative vote to “sweep” $500 million from the Power Authority into the state budget. The move was based on authority promises that rates would not be affected and that it could afford the financial bailout.
But now authority trustees — including Elise M. Cusack and D. Patrick Curley of Western New York — have voted to increase rates by 12.1 percent. In addition, they are also considering giving bonuses to all of the agency’s 1,500 employees.
“Bonuses? What are they thinking? Haven’t they been reading the papers?” Hayes fumed, referring to controversy raging over $160 million in bonuses paid to AIG executives.
Maziarz, Ranzenhofer and Hayes called for Cusack and Curley to step down.
Cusack was not available to comment Friday. Curley told The Buffalo News he “has no intention whatsoever” of resigning.
He defended NYPA’s decision to transfer funds to the state.
“This is a catastrophic time not just for New York State but for the country and many people say the entire world,” Curley said. “For us to assist the state in closing its gap, I thought, was something that was prudent. It was feasible and advisable.”
The fund transfer has nothing to do with the rate hikes, Curley said. “The fact that we gave even a dollar to the state had nothing whatsoever to do with the rate increase that we are now contemplating, and the sole reason for those increase is the state law that says the Power Authority must charge its preferential rate based on its cost,” he said.
He also said the rate hikes are small, less than a dollar for most customers. The 12.1 percent increase is an increase of 1.7 cents to 1.8 cents per unit. That would translate to an average increase of about 16 cents for utility customers, he said.
Power Authority spokeswoman Christine Pritchard said Thursday that NYPA’s hands were tied. “We are prohibited by state law to sell preference power at anything less than cost. We can’t sell at less than cost or more than cost,” Pritchard said.
That means that even if NYPA wanted to dip into the funds that were swept into the general fund last month to block the preference power rate hike, state law would prevent such a move.
“The decision to invoke what is essentially an upstate only tax on one of our key job creation resources, and then to turn around and issue bonuses to state employees, is not only an egregious abdication of NYPA’s responsibility to its rate-payers, but a direct blow to the economic development efforts of our region,” Collins said in a letter to Cuomo. “I simply will not allow such abhorrent actions to go unchallenged.”
The county executive also accused authority trustees of “engaging in the kind of self-serving politics that continues to hold back our region and our state.”
“The Niagara Power Project was historically intended to support economic development and job creation in Western New York,” Collins said. “The actions of this unelected, unaccountable authority have robbed our region of critical economic development funds at a time when we can least afford to lose them.”
Meanwhile, Sen. Antoine M. Thompson, D-Buffalo, explained Friday that he is also unhappy about the proposed rate hike after he voted for the sweep. But he said he had been assured as recently as last week by authority President Richard
M. Kessel that money used for the sweep was prohibited from being used to head off rate hikes.
“He said that’s not the reason they had to raise the rates,” Thompson said.
The senator added, however, that the timing on the rate hike is “pretty awful.”
Assemblyman Robin L. Schimminger, D-Kenmore, also said he voted for the move because Power Authority officials consented and it was a significant step toward filling a $14 billion budget gap. He accused Maziarz of being in “full spin mode.”
Schimminger said he was not sure that the rate hike is related to the fund sweep, noting that the authority must sell some of its electricity known as “preference power” at cost. He said the rate hike may stem more from the cost of the recent relicensing agreement than the sweep.
“The communities and the good senator had people embedded in that process,” he said. “There might have been a price to be paid for the generosity of NYPA to the localities.”
Democratic Sen. William T. Stachowski of Lake View — did not return a phone call Friday seeking comment on his vote.
But Hayes echoed Maziarz’s Thursday criticism that pummelled the primarily Democratic sweep plan advanced in both the Assembly and Senate. He blamed those who voted for it in the Legislature and on the Power Authority for hatching a “secret” plan that by next year will result in average monthly rate hikes of up to $1.32 for residential consumers of municipal and rural cooperative systems and 24 cents for utility company customers.
“When local legislators leave Western New York and go to Albany and cast votes along partisan lines,” he said, “it allows dysfunction to take over.”
Hayes said the authority trustees who approved the sweep plan essentially enacted a tax on upstate ratepayers.
“They really need to get out of the way and let somebody else come in,” he added.
His comments followed those made by Maziarz on Thursday, in which he claimed local residents had been “lied to and cheated” by the Power Authority plan.
The board of the Power Authority, the nation’s largest state-owned power agency and operator of 18 generating facilities, is to vote on the proposed rate increase in the next month.
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