Richmondville saves by owning utility
RICHMONDVILLE Kyle Butler strapped himself into the bucket of a cherry picker Tuesday morning and revved up his pole-mounted chain saw.
“Some days we’re linemen,” he said. “Some days we’re loggers. It depends.”
He floated 30 feet up under hydraulic power and laid the saw against the limb of a chunky old willow threatening a section of power line along Route 7 in the village of Richmondville. A spray of sawdust flew though the frigid air and into Butler’s dense red beard.
Butler is one of only four employees in charge of keeping the residents of the village supplied with electricity. In most upstate villages, a National Grid employee would be up in the cherry picker, but Richmondville is special.
The small Schoharie County community is one of the few municipalities in the state to own and operate its own municipal power company. It’s called, fittingly enough, the Richmondville Power and Light Co.
Last month, unusually cold temperatures spurred the state past a 10-year peak electrical demand record, which in turn drove up prices. As the cold continues, National Grid will be temporarily fronting customers a total of $32 million to defray the massive spike in monthly bills over time.
Richmondville Power & Light has no such plan in place, but according to power superintendent Jeff Van Deusen, they don’t really need one.
“Rates are so low here,” he said, “we can take a little hit.”
For decades, Richmondville Power & Light has provided significantly cheaper electricity to its customers than in surrounding areas. As it turns out, the flow and cost of power is incredibly complicated, but Van Deusen, a former 31-year National Grid employee, did his best to explain the village’s savings.
“Think of electricity like water,” he said, “and the country’s electrical grid as a series of garden hoses hooked to a manifold of valves.”
National Grid, upstate’s largest utilities provider, demands so much power during cold snaps it must buy from the open market.
“That power could be in Alabama,” he said, “It could be in California, wherever the extra power is.”
To get that power to a home in New York via Van Deusen’s garden hose system, National Grid must pay a guy to open all the right valves over hundreds of miles, which costs money.
Richmondville serves only 1,100 customers, so its system is simple, and simple is cheap.
According to village Mayor Kevin Neary, Richmondville gets the majority of its juice from the New York Power Authority through the Blenheim Gilboa Hydroelectric Facility. Hydroelectric is cheaper than other power sources, he said, plus it’s close by, so there are fewer transport costs.
As an example, Neary pulled out his January electric bill. He paid $66. Van Deusen lives just outside the 16-square-mile reach of Richmondville Power & Light, in National Grid territory. He used just a little more electricity than Neary, but paid $359.
Richmondville isn’t totally immune to changes in power costs. They have a contracted block of power, and anytime customers exceed that usage, Richmondville must buy power on the open market, just like National Grid.
Neary’s $66 bill was actually almost twice what he usually pays. In January, Richmondville had to buy a lot of expensive nuclear power from elsewhere in the country. The cost was passed on to village residents, with Neary shouldering $26.
It’s a large proportional increase, but he said it’s a small deal in the grand scheme of things.
There are a few dozen municipal-owned power companies across the state, but only one besides Richmondville in the immediate Capital Region. The Green Island Power Authority runs a hydroelectric facility on the Hudson River originally engineered to power a Ford automotive plant back in the days of Henry Ford himself. Now the plant kicks out cheap energy for the residents and industrial employers of the village of Green Island.
“They’re all seeing this sort of savings,” Neary said. “That’s why they’re still going.”
In a time of rising energy costs, it seems reasonable to expect scores of municipalities will soon start up their own power companies — pumping out dirt cheap electricity. But there aren’t.
Richmondville’s system is a right place-right time sort of thing. Neary explained with a short history lesson.
It all started nearly a century ago, when the Otsego County-based Great Bear Light and Power Co. went under. The Richmondville village government voted to buy the company’s local equipment and the franchise rights to 16 square miles around the village.
“That was a wise move,” Neary said.
At the time, they paid $20,000 for the lot. Over the years, they’ve updated equipment, but now, the village transformer station required to pull 69,000 volts from power authority wires is worth $1 million.
Such an out-of-pocket cost is beyond the reach of many villages, and Van Deusen said it would cost millions more to sever ties to the larger grid. Even if a village like Cobleskill or Canajoharie could pony up the funds, he said National Grid would never sell its franchise rights to the area.
Richmondville residents then, are just lucky.
Butler lives inside the Richmondville Power & Light boundary. He feels lucky, but said a lot of people don’t.
“People are used to paying so little,” he said, “when they get their winter bills and see an extra $25, it’s the end of the world.”
The crew stood around in the freezing cold, saw dust from the great willow still in the air, laughing over the complaining nature of mankind.
“What they don’t realize,” Van Deusen said, “is I’d give both my eyeballs for their bill,”