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CNN Sunday Morning

Town in New York State Generates Its Own Power Supply

Aired August 26, 2001 - 07:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JEFF FLOCK, CNN ANCHOR: Some people are hot under the collar over high power prices. Some experts say get together and generate your own electricity. CNN's Brian Palmer now on how you do it.

(BEGIN VIDEOTAPE)

BRIAN PALMER, CNN CORRESPONDENT (voice-over): Soaring temperatures this summer made many Americans crank up their air conditioners, sucking up electricity and straining supplies in places like New York City. As the summer winds down, many will be reflecting on the cost of using so much power but not everyone. Restaurant owner Ray Montemurro was actually paying less for electricity these days after moving his business from one town in Long Island to nearby Rockville Center, which runs its own electricity supply.

RAY MONTEMURRO, DODICI RESTAURANT: It happened to help us a lot financially and you know, it -- at the end of the year, you know, when you're summing everything up, it's -- definitely pays to be in Rockville Center.

PALMER: Most cities and towns that run their own power supply buy electricity wholesale. Only about 13 percent can generate their own, like Rockville Center.

TONY CANCCELLIERI, VILLAGE ADMINISTRATOR: We generate about eight percent of the time and we import 92 percent of the time, roughly. And on a daily basis, our staff looks at the market to see what's out there.

PALMER: The U.S. has more than 2,000 non-profit electric utilities run by local governments. Cities like Cleveland, Austin, Los Angeles serving 40 million Americans.

DAVID PENN, PUBLIC POWER ASSOCIATION: Public Power is really about local citizens running and owning their own local electrical utility to the local government and they don't have to charge a profit. Their purpose is very clear; the mission of Public Power is to deliver low cost, reliable electric service, not to deliver profits to stockholders.

PALMER: Some experts say public utilities deliver lower rates because they get preferential tax treatment and have access to cheap hydroelectric power produced by the federal government. Plus, they have long-term, low-cost contracts with power generators locked in years ago.

Still, municipal power is just a fraction of the market. Private utilities provide nearly 75 percent of the nation's electricity. And starting a municipal power company from scratch is a much more complicated and costly process today than it was when Rockville Center built its plant more than 100 years ago.

A few smaller towns have succeeded. But efforts to go public in cities like Buffalo, New York have stalled because of the price tag, an estimated $900 million.

Brian Palmer, CNN, Rockville Center, New York.

(END VIDEOTAPE)

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