Homeowners get bargain using local electric company

In this village and surrounding area, the lineman working on the power pole outside a house likely b
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In this village and surrounding area, the lineman working on the power pole outside a house likely bears the familiar face of Kris Beilby, Tim Smith or their boss, Richmondville Power & Light Co. Superintendent Bruce Stevens.

Add in a few clerks in the village offices, and in summer, some local high school interns, and the 90-year-old company is pretty much a homegrown service.

Prospective home buyers browsing online real estate options in west-central Schoharie County may also notice electricity service from Richmondville Power & Light Co. featured prominently in many ads.

Although tiny by utility industry standards, this village-owned company has some of the lowest rates around, according to Stevens.

“It’s a real advantage,” said Mayor Kevin Neary. “It was great foresight on [past village officials’] part to form the Richmondville electric department.

“It’s really a misnomer, to call it a ‘company,’ ” he said. “It’s village-owned municipal power. … It’s the village electric company,” Neary said with a hint of hometown pride.

The only other similar municipal utility in the immediate Capital Region is the Green Island Power Authority, near Cohoes.

Handwritten minutes of an Aug. 23, 1918, meeting of the Richmondville Village Board trace the roots of the present company. Village trustees resolved to call a special election that Sept. 7 to decide whether to buy the Great Bear Light and Power Co. of East Worcester. The plan to buy and extend the electric lighting system and generating plant was for “an amount not exceeding the sum of $15,000.” On Sept. 7, 1918, then-village Clerk Smith A. Patrick recorded that the Richmondville residents approved the purchase by a vote of “88 yes and 2 no.”

An additional $5,000 was approved by a 42-0 vote a few months later to bring the bond loan cost from the Bank of Richmondville to a total of $20,000 for the system, at 5 percent interest.

Before that, the Great Bear Light and Power Co. had been supplying electricity to Richmondville from its water and coal-fired generators in East Worcester in Otsego County.

Great Bear provided power from Richmondville west through Schenevus near Oneonta back in the days when electric lights were still a novelty in many rural areas.

In recent decades, thanks to lower cost hydroelectric power purchased from the New York Power Authority, and the fact that Stevens notes that the village municipal utility is not allowed to make a profit beyond operating expenses, electric rates are now about a third of what the major power companies, such as National Grid, charge.

But even without the profit motive, rising costs, including town property taxes that are more than double what they were two years ago, now has the company considering its first rate increase in 21 years.

Getting power out

With only 1,187 customers, Stevens and his crew keep the juice flowing throughout a 16-square-mile area stretching from the village of Cobleskill line on the east to the Otsego County line near West Richmondville.

Under long-term contracts. RP&L gets its basic power supply from the New York Power Authority’s hydroelectric projects. The actual electricity is “wheeled” to the village’s substation by National Grid, which charges various transmission fees to the local company.

The high-voltage, 69,000-volt power is transformed at the substation behind the Richmondville Volunteer Emergency Squad building along Route 7 to step it down to 4,800 volts. That power is then relayed along RP&L power lines to its customers in the village and surrounding areas, including several commercial industrial customers such as the Cobleskill-Richmondville High School and the road-building company Lancaster Development in Warnerville.

The familiar cannisterlike transformers atop utility poles then drop that down to the 120/240 volt house current that keeps household lights, heat and appliances running smoothly.

The substation built in the late 1970s is named after former Richmondville mayor George D. Davis, who was also a chief executive of National Grid’s predecessor Niagara Mohawk Power Corp., according to Stevens.

Extra purchase

When the monthly 2.7 megawatt hydropower allocation from the Power Authority is exceeded, monitoring devices at the substation connected by telephone lines to power providers start kicking in higher-priced power that must be purchased from National Grid.

Although the village company can tack on charges to recoup operating expenses on top of the contracted hydropower, Stevens said the extra “purchased power is just passed through at cost.”

In November, for example, the village paid $16,499 for hydropower at 2.65 cents per kilowatt, plus $17,960 for 449,000 kilowatt hours of supplemental electricity at 4 cents per kwh.

Adding in various charges for National Grid and the New York Independent Systems Operator for the statewide transmission system, plus extra power demand charges to large commercial users, RP&L’s bill to buy its power in November totaled nearly $35,000 in addition to the Power Authority’s $16,499 bill.

A typical home customer using about 800 kwh per month pays an average of about 5 cents per kwh, well below the approximately 17 cents retail National Grid charge, Stevens said.

As they do with about 40 other municipal utilities in the state, the Syracuse area sister organizations of the Municipal Electric Utility Association and the New York Municipal Power Agency help with training, regulations and power purchases, according to Tony Modafferi, MEUA’s executive director.

“The ratepayers, who in most cases are the taxpayers as well … are the owners of the public power,” Modafferi said.

A major part of the reason for lower cost municipal power is the Niagara Falls hydropower, he said.

Rising costs, taxes

Faced with rising costs for its three-truck fleet and other equipment, employee benefits and especially town, county and school taxes that doubled after the town of Richmondville’s recent revaluations of all property, RP&L reported a net loss of about $70,700 over the fiscal year that ended May 31, 2007. Revenues totaled $935,450 for the same period.

The electrical system, not including the village substation, is now assessed at a market value of $937,043. That’s up from about $97,000 two years before.

RP&L’s current annual 2008 county/town tax bill, outside the village, totals $14,890. The 2007-2008 Cobleskill-Richmondville district school tax bill was $18,171.

The company also gives the village fund about $11,000 in an annual payment in lieu of taxes, Stevens said.

“We haven’t had a rate increase since 1987,” said Stevens.

Consultants and village officials are currently examining operating and personnel costs with an eye toward requesting state Public Service Commission permission later this year to raise rates.

No rate application has yet been prepared, pending cost analyses expected from a consultant within a couple of months.

Even if the rates were to increase about 20 percent as is being considered, the nonprofit utility “is still a good bargain … that offers substantial savings over commercial companies,” noted village Trustee George Konta after a recent report by Stevens.

If requested and approved by the state Public Service Commission, such an increase would likely mean about $8 more a month for a typical home electricity customer, according to Stevens.

After 31 years with the village company, starting from the ground up, Stevens plans to retire in June at the age of 55.

“The job is something new every day,” Stevens said about the work he’s been doing three decades.

Categories: Schenectady County

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