David A. Paterson, Governor
HUDSON RIVER-BLACK RIVER REGULATING DISTRICT
February 5, 2010
HUDSON RIVER - BLACK RIVER REGULATING DISTRICT SCHEDULES
HUDSON RIVER AREA APPORTIONMENT GRIEVANCE HEARING
March Board Meeting Rescheduled to March 30
On Tuesday, March 30, 2010, the Hudson River-Black River Regulating District will convene a Grievance Hearing for the Hudson River Area Apportionment. The hearing will be part of the regular 10:00 AM board meeting at the Saratoga Springs Holiday Inn, originally scheduled for March 16.
At its January meeting, the Regulating District Board adopted an Apportionment which shifts certain costs from merchant hydropower companies lining the Hudson and Sacandaga Rivers to Albany, Rensselaer, Saratoga, Warren and Washington Counties, as these counties derive a flood benefit from the Conklingville Dam on Great Sacandaga Lake, maintained and operated by the Regulating District. The board also adopted a process for the conduct of an apportionment grievance hearing at which the affected Counties and others interested in or aggrieved by the Apportionment can seek a modification to the Apportionment. On February 3, the NYS Department of Environmental Conservation (DEC) approved the Apportionment.
If the Apportionment remains unchanged, the Assessments for the five counties would be as follows:
| Albany | 38.38% |
$ 1,709,342.82 |
| Rensselaer | 17.55% |
$ 781,400.61 |
| Saratoga | 33.69% |
$ 1,500,489.21 |
| Warren | 6.53% |
$ 290,616.15 |
| Washington | 3.85% |
$ 171,357.09 |
On November 28, 2008, the nation’s second highest court, the United States Court of Appeals in the District of Columbia, issued a decision against the Federal Energy Regulatory Commission (FERC) which impacts the Regulating District’s authority to assess some downstream beneficiaries. The result has been a revenue shortfall, approaching $4.0 million of the Regulating District’s Hudson River Area $5.4 million budget, making it impossible for the Regulating District to pay the annual $2.4 million in school and property taxes as required by NYS statute. As a result, the Regulating District must shift a significant portion of its $5.4 million Hudson River Area costs from the hydropower companies to the downstream counties with flood-protected properties.
“The federal court decision created a fiscal crisis for the Regulating District,” stated Glenn A. LaFave, Executive Director. “After decades of operation in compliance with New York State law, the federal court now prohibits the Regulating District from assessing these hydropower plants for costs that the Regulating District is mandated to pay, including school and property taxes. The Regulating District Board has been proactive, working to establish revenue so all financial obligations, including local school and property taxes, can be paid.”
In 2000, a comprehensive “Offer of Settlement” for the operation of Great Sacandaga Lake (GSL) and the EJ West hydroelectric plant was negotiated among and signed by 29 entities, including state and federal agencies, municipalities, non-governmental organizations and hydroelectric project operators in the Hudson River basin. FERC approved the settlement in 2002. Although Section 8.4 of the settlement states that “The Signatories to this settlement offer understand the assessment of charges is done by the Board of the Regulating District in a process defined within Article 15, Title 21 of the New York State Environmental Conservation Law, the United States Court of Appeals determined that the Federal Power Act (FPA) preempts the Regulating District’s use of NYS law. As a result, the Regulating District can no longer collect assessments from the FERC-licensed hydropower plants to cover operating expenses, including school and property taxes that the Regulating District is required to pay by NYS statute. Prior to the court’s decision, these hydropower plants paid approximately 82% of the Hudson River Area assessment.
In February 2009, the Regulating District petitioned FERC to convene settlement proceedings and to establish Interim Headwater Benefits charges, but FERC did not establish interim charges. In May 2009, FERC appointed a Settlement Judge and scheduled settlement conferences; however, in July 2009, the Judge declared an impasse. FERC ordered Oak Ridge National Laboratory to conduct a Headwater Benefit Determination to quantify the benefit received by the hydroelectric projects downstream from the Conklingville Dam and Great Sacandaga Lake, so the Regulating District can assess them via Section 10(f) of the Federal Power Act. FERC expects this study could take more than a year and the Regulating District is not allowed to assess these hydros until the FERC study is completed.
Information about the Hudson River Area Apportionment can be found on the Regulating District’s website - hrbrrd.com.