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River Agency reviews draft proposal for monetizing 20 megwatts

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LOUISVILLE - Assemblywoman Addie J. Russell, D-Theresa, presented Governor Andrew M. Cuomo’s draft proposal allowing for the sale of proceeds of 20 megawatts of hydropower to the St. Lawrence River Valley Redevelopment Agency Tuesday.

The six-page draft bill includes details on how the proceeds of the sale of 20 megawatts of power could be spent by a special board appointed by the governor for economic development in the north country.

In 2010, St. Lawrence River Valley Redevelopment Agency was given $16 million in funds and 20 megawatts of power by the New York Power Authority to be used for economic development.

But in order to monetize or use the sale of the proceeds of power, separate legislation was required by governor’s office.

The first agreement was rejected by Gov. David A. Paterson in 2010 because selling the power and giving the proceeds to the River Agency was outside the scope of NYPA’s powers under state law.

The 20 megawatts of power would equate to about $3 million each year for five years and “a portion of that thereafter indefinitely,” Mrs. Russell said.

Under the proposal, the board overseeing the proceeds of the sale of the 20 megawatts would consist of five members to be appointed by the governor. One those members will be recommended by the Senate and another one would be appointed by the Speaker of the House. Both of those members would be residents of St. Lawrence County.

But under the current proposal, three board members could reside in or out of the county.

“I think we can negotiate that all members reside in St. Lawrence County, and that the majority resides in River Agency communities,” Mrs. Russell said. “The board will be representative of towns. There was in an indication that the governor’s office was willing to discuss that issue.”

Only the funds of the proceeds of the power will be under the jurisdiction of the governor’s board.

The River Agency’s contract with Massena Electric to sell the power will not be affected.

However, under the governor’s proposal, the River Agency will not have any involvement in the board.

“It’s not my position, but a couple of reasons were made apparent—it’s a conflict of interest because the River Agency is supposed to be allocating the energy to create jobs and that is in conflict with monetizing funding for economic development projects,” Mrs. Russell said. “There would be a conflict for those two missions.”

But River Agency Chairman Robert O. McNeil argued that the model for the legislation — the agreement between the New York Power Authority and communities affected by the Niagara Power Project — that part of their monetization doesn’t go through that board at all.

“We looked at Niagara 2005 relicensing and part of the 40 megawatts — almost 25 — goes directly to the general funds of the municipalities the four towns,” Mr. McNeil said.

Mrs. Russell also said since the River Agency already has $16 million to be spent on economic development and Alcoa has just funded another $10 million, even though that covers a much larger area than St. Lawrence County, that money could be used for larger infrastructure, such as repairs to Interstate 98 or Route 11.

Under the governor’s proposal, there is some guidance as to what the board could use the proceeds for.

Eligible projects include growth and business and jobs capital investments in buildings, equipment, and associated infrastructure, transportation projects under state and federally approved plans, the acquisition of land needed for infrastructure, research and development that would directly benefit the state, and energy related projects.

“If we don’t have any immediate users of the 20 megawatts, then it makes sense to support a project that will help bring businesses to this area, whether that is infrastructure or helping finance a startup business or purchase a piece of equipment,” Mrs. Russell said.

Mr. McNeil said he would be reaching out to other local legislators for their input as well.

Mrs. Russell said she would like to introduce the finalized bill in January.

“I’d like the see the monetized value being used to create jobs as quickly as possible and the power to be used too by companies in the area,” Mrs. Russell said. “I don’t think we’re done negotiating with the governor’s office, and perhaps we can come to an agreement that everyone can live with and get this asset creating jobs.”

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