Subsidy Sheet: Power Authority Frittering

June 30, 2023

Empire State Development and local IDAs aren’t the only entities tasked with “economic development” in New York. The Power Authority of the State of New York, or NYPA, allocates subsidized power to businesses in the name of economic development. 

The public authority, founded in 1931, is a public wholesale power supplier operating a number of power-generating facilities across the state including the Niagara Power Project. NYPA is overseen by a Governor-appointed Board of Trustees who in turn select a CEO. 

NYPA hands out subsidies via the Recharge New York power program on the recommendation of the little-known State Economic Development Power Allocation Board, or EDPAB. The board is made up of four members: The Governor appoints two, and the Majority Leader of the Senate and Assembly Speaker each appoint one. 

Private businesses can access NYPA subsidies for expansion or job retention. In the case of retention, the applicant must demonstrate that there is a possibility that they will leave the state if not for subsidies. It’s unclear how the company demonstrates that it needs the subsidies. NYPA recently awarded cheap power to Amazon, and last year, the authority announced subsidies for Micron on top of the millions of dollars it was already lined up to get. Just this March, NYPA announced subsidies to over 20 private businesses.  

A simpler, more cost effective, and more transparent way for New York State to benefit from excess cheap public hydropower is to sell that power to the power market for cash, and send that cash to the general fund. Having individual businesses apply for below market cost power is ripe for abuse and pay-to-play, and requires government time and money to administer that could be better spent on just about anything else. 

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New York Corporate Giveaway News:

  • Governor Hochul went on CNBC to tout her $6 billion handout to Micron, while also acknowledging that the “Green” CHIPS act that the State Legislature passed in the 2022 session was pushed through at the last minute.
  • The Erie County IDA approved property tax abatements for a meatball maker in West Seneca, depriving local schools of $12,510/year.
  • State lawmakers approved a tax break for landlords who renovate their apartment buildings.

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If you got this from a friend, sign up here. Subsidy Sheet is written by Elizabeth Marcello and edited by John Kaehny.