Todd Tranum, Manufacturers Association of the Southern Tier executive director, is pictured with Ruth Lundin of the Jamestown Noon Rotary Club in 2024. MAST is among those opposing proposed hydropower rate increases proposed by the New York Power Authority.

Area manufacturers have joined the opposition to a proposed hydropower rate increase proposed by the New York Power Authority..

NYPA is proposing an increase in electric rates for hydropower from $12.88 per megawatt-hours to $33.05 per megawatt hour over four years. There are 51 systems in the state that get a preference power allocation for hydropower, including the Jamestown Board of Public Utilities through its early investment in the Niagara Power Project.

In a news release Monday, the Manufacturers Association of the Southern Tier (MAST) and the Buffalo Niagara Manufacturing Alliance (BNMA) joined the New York Association of Public Power opposing the proposed NYPA rate increase.

“This drastic rate increase will severely impact manufacturers who rely on affordable and reliable energy to sustain their operations,” said Todd Tranum, MAST executive director. “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. In addition to the rate case, NYPA’s Plan also includes a change in the rate-setting methodology that has been in place for decades and is contained in NYPA’s power supply contracts. The increased costs would be passed on to the retail customers.

“New York businesses already face high operating costs compared to other regions,” said Peter Ahrens, Buffalo Niagara Manufacturing Alliance executive director. “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.”

The New York Association of Public Power has already opposed the rate increase. Dave Leathers, Jamestown BPU general manager, is also the New York Association of Public Power board president. In December Leathers said association members were concerned that increasing the cost of hydropower would hurt many of the association’s business customers.

Various municipal utility systems in NYPA are calculating that this could be hundreds of dollars a month for some businesses and even some residents, Leathers said. NYPA is planning two public hearings on Jan. 29 in Niagara Falls and one Feb. 4 in Albany. The BPU and State Association of Public Power are engaged in the process to attempt to mitigate the rate increase.

Leathers also recently briefed city Board of Public Utilities board members on the proposed rate increase.

“The true fact is, if the state is moving in the direction to electrify everything, this is a thing of the past,” Leathers said during a December BPU board meeting. “If you’re going to have your electric vehicles and you’re going to charge your electric vehicles and you’re going to have electric heat and electric hot water, now you’re talking two, three, four thousand kilowatt hours a month, and that only makes that rate much, much higher.”

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 that legal requirement, the manufacturing groups said in their statement. They also are concerned how the rate increase will affect businesses that have power agreements with NYPA as part of the ReCharge New York program. More than 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 said. “The proposed rate hike jeopardizes the progress we’ve made as a region and as a state.”