City to Study Production of Electricity

City to Study Production of Electricity

Sep 04 - Buffalo News

The Common Council voted Wednesday to spend up to $40,000 on studying the feasibility of having the city produce its own electricity, presumably at an existing hydroelectric plant near the Erie Canal locks.

Corporation Counsel John J. Ottaviano said the power would be used for city-run operations and would not be sold to residents.

"We'll at least recover our $40,000 and have the potential of producing $1.2 million in revenue a year for the city," he said.

Asked how that would happen if the city isn't selling the electricity, Ottaviano answered, "It could come from litigation, so I can't really comment."

The move to hire Arlington, Va., attorney Paul Nolan and other consultants grows out of a long-running dispute with Niagara Mohawk Power Corp. over its refusal to renew a franchise agreement that expired in 1989.

The agreement, which involved a small annual payment to the city, covered a 12,000-foot-long NiMo underground transmission line that runs from the lock-side hydro plant. Niagara Mohawk sold the plant and several other small hydropower facilities in late 1998.

In 1999, the city sought a $75,000 flat payment from NiMo to make up for the previous decade of nonpayment and also a new agreement with payments of $7,500 a year for six years. The utility refused.

In 2000, the city applied to the state Public Service Commission for a preliminary permit that would allow it to study obtaining a license to own a transmission line. That would have let it seize Niagara Mohawk's line by eminent domain.

The Lockport hydro plant is for sale again, Ottaviano said. The current owner, Reliant Power, is reportedly interested in selling the plant to a Canadian company. He said that gives the city another chance to resolve the franchise dispute.

In other business, the Council withdrew from its agenda for revision a proposed law to offer a property tax break on major home improvements. The law, as written, requiredNiagara County and the Lockport School Board to vote to opt out of offering tax breaks if they didn't want them to apply to county or school taxes.

But Tuesday, County Real Property Tax Services Director William F. Budde Jr. informed the city that state law has changed, meaning the county and school district must vote to opt into the tax break, rather than having to vote to avoid it.

e-mail: tprohaska@buffnews.com

For far more extensive news on the energy/power visit: http://www.energycentral.com .