NY state scales back energy aid to thousands of North Country farmers, businesses

The good news is that Alcoa is gearing up again, adding jobs.  The bad news is that the New York Power Authority will now be curtailing the electricity discount that had been going to dairies and other businesses in the North Country.

This arrangement affected thousands of companies, saving them on average about 9% of their electric bill.  Here are details from the press release:

New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel announced that NYPA and National Grid are reaching out to nearly 2,900 North Country businesses and dairy farmers to notify them of plans to wind down the Temporary North Country Power Discount Program over a three-month period, beginning with monthly utility bills in March.

NYPA will be coordinating a similar phase out of the program with New York State Electric & Gas (NYSEG) for the more than 200 businesses and dairy farms in its North Country service territory that have also benefited from the initiative.

The gradual withdrawal of the temporary electricity credits under the program, which has saved the approximately 3,100 eligible businesses and dairy farms more than $10 million and an average of nine percent on their electricity bills, stems from the announcement by Alcoa earlier this month of its plans to restart the Massena East Plant and add approximately 120 jobs to the previously idled facility.

The planned restart—and resumed use of low-cost hydropower by the smelter’s potlines—also sets the stage for Alcoa’s consideration of the future modernization of the facility, as provided for under contractual agreement with the Power Authority, and its undertaking of major capital investments.

In a Jan. 27 joint letter (http://www.nypa.gov/services/economicdev/discountprogramletter.pdf) to the beneficiaries of the Temporary North Country Power Discount Program, Kessel and Susan M. Crossett, vice president, National Grid, described the pending restart of aluminum production at Massena East as “great news for Massena and the entire North Country economy.”

In November 2009, NYPA implemented the power discount program, with the assistance of National Grid and NYSEG, to support Northern New York businesses during the economic downturn. The program has been funded from the sale of unused power from the St. Lawrence-Franklin D. Roosevelt Power Project into the state’s wholesale electricity market.  The power had been freed up due to the temporary curtailing of operations by Alcoa in 2009 at the Massena East plant.

The net revenues from the freed-up power were used to provide energy discounts for businesses and dairy farmers in St. Lawrence, Jefferson and Franklin counties. Specifically, the discount has been applied to the monthly utility bills of National Grid and NYSEG and listed as a NYPA Temporary Electricity Credit for the eligible businesses. Other entities, such as some dairy farms, have been receiving direct payments from the Power Authority.

The temporary power discount program will be phased out over three months to correspond with the Alcoa Massena East plant’s ramping up as a result of anticipated growth in aluminum demand.  The program’s customers served by National Grid will see the electricity delivery credit on their March utility bills reduced from 24 percent to 18 percent. The delivery-charge credit will be lowered to 12 percent in April and six percent in May, when it will last appear on the National Grid bills.

A similar transitional period of credit reductions will be undertaken for the smaller group of eligible NYSEG customers benefiting from the temporary power discount program.

“By optimizing the use of NYPA hydropower, pending Alcoa’s East Plant restart, the Temporary North Country Power Discount Program has been a great opportunity for businesses and dairy farms to reduce electric bills in difficult economic times,” the Kessel/Crossett letter stated.

The joint letter also noted that both the Power Authority and National Grid have programs for promoting energy efficiency to lower electric bills.

NYPA customers interested in obtaining information on the statewide public power utility’s energy-saving programs can e-mail [email protected] or leave a message at the toll-free Energy 2011 Hotline: (866) 314-4110.

National Grid also stands ready to help its customers lower their energy costs more permanently through programs that are designed to provide financial incentives and technical assistance to encourage installation of high efficiency equipment.  More information is available by visiting National Grid’s energy efficiency Web site at www.powerofaction.com/efficiency or by calling the utility at 1-800-787-1706.

Further customer information on the Temporary North Country Power Discount Program can be obtained by contacting NYPA at 1-800-622-6972 or e-mailing [email protected]

Tags: Alcoa, economy