Archive for March 29, 2009

The Kessel NYPA Watch, March 29, 2009 – By George J. Marlin

March 29, 2009

Richie Kessel actually traveled to upstate New York to hold a press conference on March 24, 2009. Why did he leave his natural habitat, Long Island? Because he did not want Long Island media recording him publicly eating crow and because upstate customers were poised to call for his ouster.

After receiving public lashings from Governor David Paterson (D), Congressman Brian Higgins (D), Erie County Executive Chris Collins (R), Senator George Maziarz (R) and scores of other elected officials, for announcing a 12 ½ % NYPA electrical rate increase, a humiliated and chastened Kessel postponed the rate increase.

A review of Kessel’s words and deeds is revealing:

In February 2009, Kessel gave away $476 million of surplus NYPA money to fund New York State’s operating deficit. The Niagara Gazette reported that Kessel said “the move will not result in layoffs on rate hikes for consumers.” The Niagara Gazette also revealed that as Kessel was agreeing to hand over NYPA money to Governor Paterson (which the state is not legally required to ever pay back), NYPA was applying to the Federal Energy Regulatory Commission to increase customer electrical rates by 12 ½ %. Richie: Were you deceiving the public?

When confronted with these inconsistencies, Kessel compounded them saying that NYPA money “given to the state had nothing to do with a rate increase. The money could not have been used to lower rates.” But Governor Paterson said “The [NYPA] money was diverted from some projects that never came to fruition.” If $476 million in defunct NYPA projects could be handed over to the state why couldn’t it be handed over to NYPA ratepayers or used to pay down debt and lower rates? Richie: Were you deceiving the public?

When the proposed NYPA rate increase was revealed, Kessel said it was mandated by state law. But when the heat was on, Kessel managed to find an excuse to cancel the “required” rate increase on March 24. He said that NYPA could sell its hydropower for less than cost for an undetermined interim period. Richie: Were you deceiving the public?

When asked by The Buffalo News editorial board and others if the NYPA rate freeze decision was made due to the public backlash and pressure from politicians, Kessel answered “No.” But when asked the same question by the Niagara Gazette, Kessel said, “Did the public pressure make a difference? I think it did and I don’t think there’s anything wrong with that.” Which is it Richie?

Richie Kessel is unfit to be CEO of the nation’s largest state-owned electric utility. Fortunately, for the people of New York, Kessel can be removed from office at NYPA’s annual trustees meeting this Tuesday, March 31, 2009. According to Article IV Section 2 of NYPA By-laws, the President and CEO must be reappointed at the annual trustees meeting. By-laws Article III-Section 5 reads:

At all Trustees’ meetings, the presence of four Trustees shall be necessary to constitute a quorum and shall be sufficient for the transaction of business. Any act shall be sufficient for the transaction of business if such four Trustees are in agreement and any act of such four Trustees present at a meeting and which constitutes a quorum shall be an act of the Trustees.

This means that yea votes of 4 trustees are required for election of NYPA’s President. At this time there are five NYPA trustees and two vacancies. Kessel must receive four of the five votes if he is to be elected President. (Last fall the trustee vote for Kessel was four to two in his favor.) If the two upstate Trustees vote “No,” the Kessel-NYPA nightmare will end.

Finally, in talking with The Buffalo News editorial board on the record last week, Kessel made a fundamental mistake that any intern with business experience or anyone who has spent any time attracting businesses would avoid. Kessel mentioned Camden Wire and Goya as businesses that might leave the State and also threw in public mini-mill steel manufacturer, Nucor, as another that was looking for aid. Apart from State law and regulation that require that confidential information like that not be cavalierly thrown into the public square, an ounce of common sense would suggest that these businesses and their employees and customers would prefer that they not be discussed in public by a Long Island-based pol in on-the-record meetings.


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