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Tonawanda Abrasives Manufacturer Latest to Receive Low-Cost Niagara Hydropower in Return for Jobs and Capital Investment

Michael Saltzman

October 24, 2006


NORTH BLENHEIM—Low-cost hydropower from the New York Power Authority’s (NYPA) Niagara Power Project near Niagara Falls will support a more than $1 million dollar expansion by a Tonawanda manufacturer of abrasive products and its creation of eight new jobs.

The NYPA Trustees Tuesday approved an allocation of 300 kilowatts (kw) for the Exolon Company from a block of Niagara industrial power known as replacement power, reserved for Western New York businesses and industries within a 30-mile radius of the Niagara project.

 “The allocation of Niagara hydropower to Exolon highlights the Power Authority’s continuing partnership with state and local governments and the private sector to expand Western New York’s economy and grow jobs for the region,” said Timothy S. Carey, NYPA president and chief executive officer. “Governor Pataki has led the way in optimizing the value of this giant hydroelectric facility, which is directly linked to more than 43,500 jobs in Erie, Niagara and Chautauqua counties and capital expenditures of hundreds of millions of dollars.”

 “We greatly appreciate the support we received from the Power Authority for this low-cost hydropower, which will support our expansion plans and investment in new product lines,” said George Bilkey, manufacturing manager, Exolon. “Electricity costs are a significant portion of the cost of doing business for energy intensive operations like ours, so this allocation is a welcome development and will contribute to our expansion and ability to vie with low-cost competitors overseas.”

Exolon, which was founded in 1914, sells products principally used for abrasive, refractory and surface-finishing applications. The expansion at the Tonawanda facility, which currently has 62 workers, includes refurbishing a ball mill, a type of crusher used to grind materials like ores and ceramics into fine powder, and a kiln for heat-treating materials.

The Western New York Advisory Group, consisting of the Power Authority, Niagara Mohawk, Empire State Development Corp., the Buffalo Niagara Enterprise, and the Niagara County Department of Economic Development, recommends the industrial allocations from the Niagara project. The process provides for allocations of available Niagara power on a continuous basis in accordance with a 2003 Memorandum of Understanding (MOU), renewed earlier this year.

Replacement power and another block of Niagara industrial power—expansion power—together account for 695,000 kw, or more than one-quarter of the project’s net dependable capacity of 2,400,000 kw. The project’s output—the lowest-cost in New York State—is sold under state and federal laws to community-owned electric systems, upstate investor-owned utilities and neighboring states, in addition to Western New York businesses and industries.

About NYPA:

■    NYPA uses no tax money or state credit.  It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity.  ■    NYPA is a leader in promoting energy-efficiency, new energy technologies and electric transportation initiatives.  ■    It is the nation’s largest state-owned electric utility, with 18 generating facilities in various parts of the state and more than 1,400 circuit-miles of transmission lines.

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