Return to News Exchange 5 New York Towns Choose Municipalization in 6 Referenda as Studies Predict Big Savings

The towns of DeKalm, Hermon, Lisbon, Potsdam, and Russell, New York voted November 5 to pursue municipalization, after feasibility studies for Canton, Potsdam and Ogdensburg, NY predicted residents will save 25-40% on their electric bills by municipalizing. Twenty-one New York towns have passed such referenda.

New York's municipalization fever follows the lead of Massena, NY, whose municipally-owned Massena Electric Department charges one-third (4 cents/kwh) what the Niagara Mohawk Power Corporation charges residents (12-13 cents/kwh). Norwalk, half of which is served by Massena and half by Mohawk, has led the movement.

During 1996 25 towns and villages signed letters of intent to work with a Texas firm whose CEO, John Wing, offered to loan the up-front costs of establishing municipal utilities for any town in St. Lawrence or Franklin counties. Wing's Group wants to aggregate the 75MW load in the area to form one large public power utility, according to the Public Power Weekly.

J.W. Wilson & Associates, the initial choice for San Francisco's study, performed the feasibility study for Canton and Potsdam, indicating 25-40% savings over 15 years. Potsdam's City Manager, Mike Weil, says municipalizing will cut the town government's $412,370 electricity budget by $99,000 to $165,000.

Glens Falls voters rejected municipalization, 70/30. City Treasurer Paul Kemnitzer, a leading proponent, said that Niagara Mohawk spent $250,000 in media against the initiative, which was also hurt when some of the towns big employers, once supporters, opposed it in the final hour. Secret deals between utilities and individual customers are legal, and may have played a role in the switch.