The Manufacturers Association of the Southern Tier (MAST) and the Buffalo Niagara Manufacturing Alliance (BNMA) strongly oppose a proposed rate increase by the New York Power Authority (NYPA) to nearly triple the rates charged to customers for renewable hydropower from the Niagara Power Project.

The proposed rate increase, which raises rates from $12.88 per megawatt-hour to $33.05 per megawatt-hour over four years, poses a significant threat to the competitiveness of manufacturers in the region.

Todd Tranum, Executive Director of MAST, expressed his concerns, stating, “This drastic rate increase will severely impact manufacturers who rely on affordable and reliable energy to sustain their operations. Rising energy costs hinder our ability to invest in innovation, expand production, and create jobs. This proposed rate increase stands in direct opposition to efforts to grow the economy.”

The increase also changes the long-standing rate-setting methodology that has been in place for decades. Preference power customers, including municipal electric systems and rural electric cooperatives, have had access to cost-based electricity under federal and state law. This proposal disrupts the stability these entities have relied upon to supply clean, renewable energy to their communities.

Peter Ahrens, Executive Director of the BNMA, emphasized the broader economic implications, stating, “New York businesses already face high operating costs compared to other regions. This rate hike will only exacerbate those challenges, discouraging investment and making it harder to attract and retain manufacturers who play a critical role in supporting local economies. The proposed rate increase is a sharp departure from the Governor’s goal of energy affordability during the transition to a clean energy future.”

Governor Hochul’s public statements have underscored the importance of maintaining energy affordability. On February 15, 2024, she stated, “Energy affordability continues to be a top priority in my clean energy agenda.” However, NYPA’s proposed rate increase directly contradicts this vision, creating additional barriers for businesses and communities already struggling with rising costs.

Preference power customers have long supplied their local communities with affordable, renewable energy from NYPA. Under the Niagara Redevelopment Act, these customers are entitled to the “lowest rates reasonably possible.” The proposed rate increase and change in methodology deviate from this legal requirement, undermining decades of policy designed to support economic growth through cost-effective energy.

The BNMA and MAST also expressed concern regarding the impact the rate increase will have on those businesses that have power agreements with NYPA as part of the ReCharge New York program. A little over 60 companies in Western New York have agreements with NYPA through this program. ReCharge NY is an economic development initiative of New York State that enables companies to receive power through NYPA for keeping or growing employment, expanding operations and/or making significant local investments in their businesses.

“While we recognize the importance of maintaining and upgrading infrastructure, NYPA must find solutions that balance these needs with the economic realities facing New York’s businesses and manufacturers,” Tranum added. “The proposed rate hike jeopardizes the progress we’ve made as a region and as a state.”

MAST and BNMA urge NYPA to reconsider this proposal and work collaboratively with stakeholders to ensure the continued affordability of hydropower for the benefit of New York’s economy and its communities.