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NYPA exec proposes temporary rate cut

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The New York Power Authority will lower the electricity rate for north country businesses by selling abandoned preservation power from the idling Alcoa East Plant in Massena.

"We're looking at an electrical stimulus plan for the north country," NYPA President and Chief Executive Officer Richard M. Kessel announced in front of a lunch crowd Thursday of the Greater Watertown-North Country Chamber of Commerce. "It will lower the electricity billing for the business sector of the north country."

Under the proposal, NYPA would sell about 254 megawatts of electricity that has been used by the Alcoa East Plant and use the revenue to reduce the rates for industrial, small business, retail and perhaps nonprofits in St. Lawrence, Lewis and Jefferson counties. The plan would not include residential rate-payers.

Mr. Kessel said he hopes to present the plan to NYPA's board of directors at its next meeting, May 19 in Massena.

"It would be on a temporary basis," he said. "We all want the East smelter to reopen."

On April 1, Alcoa announced it will lay off about 170 of its 1,100 employees at its Massena plants. The job losses come from its East Plant, which will close May 1.

Global demand for aluminum dropped precipitously over the past year and pushed the company toward closing. Instead, NYPA and Alcoa reached an agreement in which the company is keeping 950 jobs to operate the West plant and prepare for upgrades to the East Plant.

Mr. Kessel later said the upgrades are estimated to take about two years.

NYPA agreed to lower employment thresholds and transfer power allocations between the two plants as part of a deal between the company and the state.

"It was very clear that we had to do whatever we needed to do to save Alcoa and to save the jobs there," Mr. Kessel said. "If we could not have worked out a deal, Alcoa would not have made it in six months."

In January, NYPA signed a new low-cost power agreement with Alcoa, which will begin in 2013 and could last three or four decades. It requires at least 900 employees at the plant and upgrades to the East Plant, which will cost about $500 million, Mr. Kessel said.

During the speech, Mr. Kessel also said he wanted to see the 12 megawatts of power that the Massena General Motors plant was using redirected to another north country project. The GM plant will close May 1.

He said that power, plus the electricity and $16 million set aside for the failed St. Lawrence Aquarium and Ecological Center, could be "a huge injection into the economy."

Mr. Kessel also talked about the future of electricity in New York.

He envisions a central solar power facility in the north country, producing 20 to 50 megawatts.

"It would be great if we could partner with the north country to do a central solar plant and get some of the solar panels manufactured right here," he said.

That, combined with offshore wind turbines near Buffalo in Lake Erie or Lake Ontario, would create more renewable energy. But it also could be a huge economic development engine, Mr. Kessel said.

To get the power from production points to consumers, Mr. Kessel said, the state needs to upgrade its power grid.

He foresees a transmission line from Canada, carrying 1,000 megawatts of power from hydroelectric plants of Hydro-Quebec. But the line would use the latest technology — a superconducting cable — that carries three to five times the normal load. It would follow mostly existing rights-of-way.

All of the NYPA plans are geared toward producing cheap electricity and helping the state through tough times, Mr. Kessel said.

"It's critical that the state helps places like the north country where we see job losses and challenges every day."

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