By JAMES FINK
jfink@bizjournals.com | 716-541-1611

Local leaders are applauding the decision by Gov. David Paterson to sign into a law a new bill that should give regional economic development efforts a boost.

Paterson signed into law late Monday a decree that the New York Power Authority use proceeds from the sale of unallocated megawatts of low-cost hydropower to help finance the Western New York Economic Development Fund.

NYPA annually allocates 695 megawatts of low-cost hydropower to local businesses. Any unsold power, through its Replacement Power and Expansion Power programs, can be sold. Before, the money went to NYPA's general fund but now those funds must be allocated for local development projects.

Early estimates peg the annual funds in the $10 million range.

The state law was championed by Assemblyman Dennis Gabryszak, D-Cheektowaga, and was considered a top economic development priority by the Buffalo Niagara Partnership.

"This is a huge victory," said Andrew Rudnick, the partnership's president and CEO. "This is a new incentive for economic development that we didn't have 24 hours ago."

Rep. Brian Higgins agrees.

"The Niagara Power Project was intended to provide a direct benefit to this community," Higgins said.

The Replacement and Expansion Power programs require low-cost hydropower to be distributed to companies within a 30-mile radius of the Niagara Power Project in Lewiston. That covers an area stretching from Niagara County to southern Erie County and into Genesee County.

In 2008 NYPA had $309 million, with more than 75 percent directly attributable to the power project. Yet only 14 percent of the economic benefit remained in the region, Higgins said.

"Today, with this legislation, we continue to take back what is naturally and rightfully ours," he said. "Our success in staking this claim means millions of dollars once diverted to other parts of the state and country will again be flowing back into Western New York where it belongs."

Rudnick said the funds will be distributed by a review committee of members from the Buffalo Niagara Partnership, Buffalo Niagara Enterprise, Empire State Development Corp., Erie County Industrial Development Agency and Niagara County IDA.

"This (new money) becomes larger than life, especially in the absence of other (economic development) tools," Rudnick said.