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Thursday, December 18, 2014
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A baseline for state authorities

Tuesday, August 27, 2013 - Updated: 4:08 AM

A news release issued by the Office of the New York State Comptroller criticized the New York Power Authority, its hiring practices, the state's long-standing practice of taking millions of dollars from the authority each year and its travel planning operations. Unfortunately, it does not appear the author of the news release looked at Comptroller Thomas P. DiNapoli's report very carefully, painting the authority in a negative light when the actual report was straight forward and non-judgmental.

The report carefully points out that the OSC relied solely on financial records delivered to the Authority Budget Office. It was not an audit where the OSC examines the books of the authority.

The report, dissimilar from the news release, focuses on the state's use of NYPA funds to help balance the state budget. In 2008, the state took $366.2 million from NYPA, raiding at the time the reserve to cover NYPA's residual costs to clean up the Fitzpatrick nuclear plant in Oswego County, which it no longer owns. The next year, the state took $222.5 million.

Last fiscal year, the amount taken fell to $21 million. The funds supplied by NYPA for state purposes this last fiscal year were the lowest in the 10 years described in the report. The OSC report essentially defends the actions of the transfer of $90 million this year, arguing that the money is no longer solely used to balance the budget but "will be utilized to support energy-related initiatives of the state or for economic development purposes."

The OSC raises good questions about to what degree the state's authorities should siphon funds to the state's general fund. The report says "transfers from the authority to the state may diminish NYPA's capacity to provide low-cost power to businesses and nonprofit organizations and could be considered a hidden tax on utility customers who pay NYPA charges."

What the news release misses is that the state owns NYPA, and NYPA's payments to its owners are no different than any other public or private utility in the nation. That question is worthy of debate.

However, the news release was critical of NYPA's employee compensation, claiming too many people made too much money. The comptroller is not making a fair comparison.

NYPA is unlike any other state agency where salaries are lower. NYPA operates a complicated electric power generation system with 16 power plants interconnected to the state transmission grid.

NYPA's hydroelectric power plants at Massena and Niagara Falls provide a stable, environmentally clean source of baseline power to New Yorkers at extremely low rates. And it does so safely.

As the largest public power utility in the country, NYPA must compete with power companies, engineering firms and other government power generators for a limited supply of highly skilled engineers and transmission system workers. Men and women in these professions are sought after because of their knowledge and expertise, and they command higher salaries than other government agencies pay. The salaries are lower than investor-owned electric utilities such as National Grid and Con Edison.

What the news release ignores is the challenge NYPA faces in attracting a workforce to replace the men and women who will retire from NYPA in the next five years.

The comptroller's news release generated lots of headlines. But there appears to be no surprises in the report, which, if properly evaluated, might provide a baseline to debate the wisdom of the state taking excess funds from authorities who are required to invest heavily to maintain services upon which New Yorkers have come to depend.

-- The Watertown Daily Times

     

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