Tonko Troubled By NiMo Hike Request

By JOEL  MANDELMAN     Daily Gazette  July 6, 2001

Assemblyman Paul Tonko, D-Amsterdam, said he was concerned both about the  impact the increase would have on the upstate economy and about the timing of  the announcement, which came the day before a major holiday.

He called the timing "troubling and telling," and said upstate "simply cannot  afford an increase" in electricity prices.

He said deregulation was designed to push prices down, but the trend appears to be going the other way.

"What we have then is a very dramatic concern that we're going in the  opposite direction than that which was desired," he said.

On Tuesday, Niagara Mohawk submitted a proposal to the state Public Service  Commission to raise electricity rates 13.1 percent for residential customers and 10 to 12 percent for commercial customers. Under the proposal, which would take effect Sept. 1, an average residential customer using 600 kilowatt-hours per month would see an increase of about $10 a month, said Nicholas Lyman, a NiMo  spokesman.

Lyman said the increase reflects a rise in wholesale electricity prices, which have been driven up by increased natural gas prices. And he called the  timing of Tuesday's proposal "quite coincidental," noting it amends an April proposal that would have raised rates 10 percent for residential customers.

Lyman said the delivery charge for the electricity will drop, but that decrease will not be enough to offset the rise in wholesale electricity costs.

Charles Brennan, a staff attorney with the Public Utility Law Project in Albany, said he was especially concerned about the effect the proposed increase would have on low-income customers, who are already struggling with their bills.

"And with increases, they're not going to be able to afford it in the  future," he said.

Brennan said the nonprofit group hopes the Public Service Commission will  include protections for low-income rate payers as part of its approval of a  proposed merger between NiMo and National Grid.

At NiMo, Lyman said the Syracuse-based utility doesn't like to see the increases, but hopes rates will come down as producers add new generation.

"Let's let the system work," he said. "Let's have more producers come in to  play," he said.

NiMo's rate proposal needs the approval the Public Service Commission. PSC spokesman David Flanagan said the commission staff will take comments on the proposal and then make a recommendation to the commission. The commission is set  to consider the proposal at its Aug. 29 meeting, he said.

This is NiMo's largest increase since at least the mid-1990s; since 1995,  Lyman said, rates have either fallen or remained flat.