WHITE PLAINS -- The New York Power Authority (NYPA) Trustees have initiated a rate adjustment process, as required by law, including public comments on new rates for hydroelectric power supplied to several groups of customers.

The rates would be phased in over three years.

The trustees also directed a series of cost-cutting measures that will help to ensure that the authority can continue rates that are among the lowest in the country.

The spending cuts will allow a renewed focus on the maintenance and reliability of the authority's generating and transmission facilities, including Massena's St. Lawrence-Franklin D. Roosevelt power dam.

Authority staff will review all overhead costs, including staff positions and salaries, outside consulting, travel, real estate, contributions and grants with a goal of matching Governor Cuomo’s ten percent reduction, and will present recommendations at the September board meeting.

For the typical customer of a public utility, the rate increase would be five cents per month and for the typical municipal customer, the rate increase would be 60 cents per month.

The principal drivers of the proposed capital project rate adjustment are investments in significant upgrades at the power authority's St. Lawrence-FDR and Niagara hydroelectric projects and relicensing costs at both facilities.

During the period from 2009 to 2014, NYPA will have invested more than $490 million in ongoing capital improvements at the two projects, including Life Extension and Modernization programs at St. Lawrence-FDR and the Niagara project's Lewiston Pump-Generating Plant.

The programs are designed to keep the projects operating reliably and efficiently well into the future.

Relicensing expenditures of over $100 million in the same period—all in Western and Northern New York State--are the other major factor.

"The Power Authority's consideration of a new, phased-in hydropower rate structure reflects our considerable efforts to balance the need to recover our costs with that of easing the impact on our customers," said NYPA Chairman Michael J. Townsend, who noted that an increase in the Authority's "preference" rates for hydropower would be the first since May 2008.

The adjustment in the hydropower preference rates would apply to sales to the state's 51 municipal electric systems and rural electric cooperatives; to three utilities--National Grid, New York State Electric & Gas and Rochester Gas and Electric--for use by upstate residential customers; to the communities that receive power allocations under the Niagara project's relicensing settlement agreement; and to seven neighboring states, under federal law.

The procedure for rate adjustments is included in existing contracts with these customers.

NYPA has not been recovering its costs of producing power at the Niagara project in Lewiston and the St. Lawrence-FDR project in Massena as required by state law.

The new phased-in rates would permit a gradual return to full cost recovery while mitigating the economic impact on customers.

As part of the public comment period for the proposed new preference rates, the trustees authorized public hearings to obtain comments from interested parties at times and places to be announced in Niagara County; Massena in St. Lawrence County; and Central New York.

After comments have been received at the public hearings and in writing, the trustees will receive a staff report and are expected to consider adoption of the rates at a meeting in the fall.

Information on submitting comments on the proposed rates to the power authority will be made available shortly on the Public Hearings section of www.nypa.gov/os.htm.