Paterson to NY Power Authority: Avoid rate hikes

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March 24, 2009

By MICHAEL GORMLEY The Press Republican Fri May 14, 2010, 07:17 PM EDT

ALBANY, N.Y. (AP) — Gov. David Paterson called Monday for the New York Power Authority to back off proposals that could increase utility rates upstate while it gives out millions of dollars in bonuses to employees.

NYPA responded that it would give Paterson's requests serious and immediate review, according to Christine Pritchard, NYPA spokeswoman.

At issue are two proposals. One would increase most upstaters' bills by less than 25 cents a month, according to NYPA. Republican Sen. George Maziarz of Niagara County says the increase would actually be as much as $4 a month. The other is $3 million in planned bonuses, which the authority calls "variable pay."

Paterson, a Democrat, called the rate increases counterproductive and the bonuses inappropriate in hard times.

"Even a minimal rate increase, as you have proposed, could have a negative impact on businesses and nearly 2.5 million New York residents," Paterson wrote in a letter to NYPA. He said he realizes canceling bonuses would hurt NYPA employees, but "I also know that many people across our state are facing even harsher circumstances during this recession."

The authority runs power plants, including hydroelectric facilities at Niagara Falls and in St. Lawrence County. As a public authority, it is legally independent of direct control by governors or the Legislature. The current board has two members appointed by Paterson, one by former Democratic Gov. Eliot Spitzer, and two by former Republican Gov. George Pataki. The CEO is Richard Kessel, recommended by Paterson and appointed by the board.

Kessel "shares Gov. Paterson's concern for the upstate economy and how electricity rate increases will negatively impact working families and upstate businesses," Pritchard said, adding that "NYPA has not distributed variable pay to any employee this year."

The issues first raised by Maziarz after a hearing last week became part of rising tension in the Senate, where Democrats now have a 32-30 majority after years of GOP control.

Sen. Kevin Parker of Brooklyn said during a press conference that his fellow Democrats are talking to NYPA about rejecting the proposals. He said the initiative was part of the conference's commitment to bipartisanship and upstate issues. Later, he said it was his oversight that neither Maziarz nor any other Republicans were invited.

Crashing the press conference, Maziarz was provided a rare opportunity to speak at an event held by the opposite party.

"I want to welcome my colleagues to the fight," Maziarz told reporters. He noted no Democrats spoke with him at last week's hearing on the proposals.

Parker then noted that NYPA's bonuses were awarded for at least 10 years and there was a rate increase just two years ago — all when Republicans ran the Senate.

Maziarz claims the rate increase can be blamed on the "sweep" of $544 million in unused NYPA funds that the board turned over to Paterson and the Democrat-led Legislature last month to help close the state's general fund deficit. Democrats and NYPA deny that, saying the money couldn't have been used toward reduce rates even if the authority held it.

Maziarz, who was chairman of the energy committee when the GOP held the Senate majority, said the rate increase will cost a typical household $3 to $4 a month. Pritchard said the typical residential or small farm consumer served by National Grid, New York State Electric & Gas Corp. or Rochester Gas & Electric Corp. would see a rate increase of about 16 cents per month if the proposal is approved. Municipal and rural cooperatives would see an increase of about 72 cents per month.