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Editor, The North Country Gazette:
The State Comptroller's audit of the Niagara Power Project, the subject of recent news coverage, found that "all Niagara revenue and expense items were properly accounted for." The report also noted that an independent audit firm "confirmed that the New York Power Authority's (NYPA) financial statements have been prepared in conformity with accounting principles generally accepted in the United States." http://www.northcountrygazette.org/articles/103006NYPAFinancials.html
The findings verify NYPA's sound and responsible management of the Niagara Project, which was created by law to serve as a statewide asset. Among the duties of the Power Authority established by state law in 1931 was the development and operation of the Niagara and St. Lawrence power projects. The law states that those projects "shall be considered primarily as for the benefit of the people of the state as a whole." Former Governor Franklin Delano Roosevelt said in his first inaugural address that the waterpower resources of New York State "belong to all of the people."
Federal and state laws govern how the Niagara project's power is to be used. For example, federal law requires that 50% of the project's output be sold to municipal and rural electric cooperative systems in New York (40%) and neighboring states (10%). State laws govern the other half and supply the rest to Upstate New York for Western New York industries providing nearly 44,000 jobs or to benefit upstate residential electric consumers.
The Power Authority appreciates the State Comptroller's audit's recognition of NYPA's cooperation and will certainly consider implementing the sole recommendation to "present expense and revenue information by power project in future NYPA Annual Reports."
It should be noted that the Niagara project's revenues for 2004 and 2005, highlighted in the report, are not representative of historic operating trends. The 2004-2005 period experienced higher fuel and energy costs as a result of various factors, including the Gulf Coast Hurricanes Katrina and Rita in 2005, that increased the market value of the project's power.
There is no reasonable expectation that project revenues will remain at such levels. In fact, the Niagara project's net revenues for the four years preceding 2004 and 2005 averaged about $35 million, some 75% less than the average of the two years that were audited by the OSC. As every financial analyst warns, "Past performance is no guarantee of future results."
Timothy S. Carey
President and Chief Executive Officer
N.Y. Power Authority 11-1-06
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© 2005 North
Country Gazette
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