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ALBANY---The New York Power Authority's (NYPA) financial reports do not include specific information on its hydropower plants, despite the fact that the facilities, located on the Niagara and St. Lawrence Rivers, account for a significant portion of NYPA's annual revenues, according to an audit issued Monday by New York State Comptroller Alan G. Hevesi.
The audit was requested by elected officials and others in Western New York, who have expressed concerns that electricity generated by the Niagara Power Project (NPP) and the revenues NYPA receives from the facility do not adequately benefit that region. NYPA's license from the Federal Energy Regulatory Commission to operate the NPP expires in 2007 and the authority is currently involved in a relicensing process, which includes negotiating long-term agreements with local governments in the area to fund cultural and economic development projects.
Auditors determined that NYPA's financial statements were prepared in accordance with generally accepted accounting principles, and a review of supporting records for the financial statements confirmed the accuracy of the documents.
However, NYPA's establishing legislation stipulated that the authority should provide full and complete disclosure of all factors contributing to the cost of transmission and distribution of power. Auditors noted that detailed information on the individual power projects is not included in public financial reports, even though such information is readily available from internal management reports.
"Financial information about each of NYPA's hydropower plants is prepared for the authority's internal documents, so it is readily available and there is no reason why it should not be made available to the public along with other financial details," Hevesi said. "This is another example of the need for greater accountability and transparency in the state's authorities."
Auditors found that the revenues allocable to NYPA's Niagara Power Project exceeded expenses by $112 million in 2004 and by almost $166 million in 2005. For the same years, all of NYPA's operations resulted in total net revenues of $82 million and $58.5 million respectively. NPP contributed 137% of NYPA's total net revenues in 2004, and 284% in 2005.
In their response to the audit, NYPA officials agreed with these figures, but emphasized that the two years should not be viewed as typical for NYPA or NPP due to unusual conditions in energy markets. The complete response is included in the audit.
NYPA operates 17 generating facilities and 1,400 circuit miles of transmission lines, and provides about one-quarter of the electricity used in New York State. Created by the Legislature in 1931, NYPA is the country's largest state-owned utility.
Click here for a copy of the audit. 10-30-06
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© 2006 North
Country Gazette
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