N.Y. Power Authority Approves Low-Cost Hydropower Allocation For New Metals Recycling Facility In Hamburg: 22 New Jobs to Result from $12.5 Million Capital Project

Michael Saltzman
(914) 390-8181

June 28, 2011


LEWISTON— New York Power Authority (NYPA) President and Chief Executive Officer Richard M. Kessel today announced an allocation of low-cost hydropower from the Niagara Power Project for the conversion of a vacant steel mill in Erie County to a metals recycling facility.  It will create 22 new permanent jobs, in addition to the construction jobs involved with the refurbishing of the facility.      

The NYPA Board of Trustees approved an allocation of 1,200 kilowatts to Buffalo Shredding and Recovery LLC in Hamburg, N.Y., in support of the company’s plans to invest $12.5 million in developing the new facility.  The facility will turn out new products from raw materials such as scrap cars, appliances and sheet metals obtained from other affiliated operations in Buffalo, Rochester and Syracuse. 

“The Power Authority is pleased to play a part in bringing into operation the new metals recycling facility and contributing to an industrial process that conserves vital natural resources,” Kessel said. “The savings from the low-cost Niagara hydropower will help Buffalo Shredding manage its operating costs in a commodities business known for narrow profit margins and volatile raw-material prices. The hydropower provides important support for the company’s continuing to move forward with this initiative in Hamburg.”

Buffalo Shredding is a newly formed subsidiary of Metalico, a scrap-metal processor operating with multiple facilities around the state with more than 200 employees.

Buffalo Shredding is building the metals recycling facility at the former ArcelorMittal steel galvanizing mill at a 44-acre site at the corner of Route 5 and Lake Avenue, on the border of Hamburg and the Village of Blasdell.  The vacant facility, which was closed in May 2009, will be renovated to accommodate the purchase and installation of a 4,000-horsepower shredder- motor and metal-separation processing system.  The renovation will include installation of new lighting, pumps, motors and air-handling equipment, with the facility expected to go into operation by the end of the year.

Currently, Metalico sends much of its scrap metal feedstock to its Pittsburgh shredder operations. Building the new metals recycling facility in Hamburg will allow Metalico to reduce costs associated with transporting raw materials out-of-state.

As an additional facet of the Hamburg initiative, Metalico and its affiliates plan to acquire and maintain a private fleet of railcars to serve the new recycling facility’s operations and supplement the capability for moving materials and products through South Buffalo Railroad.  Approximately $1.5 million a year in new freight business is expected to result from the delivery of the scrap metal to the recycling plant, and from the transporting of the facility’s output to steelmakers and other industrial customers, mainly in New York and Ohio. The increased rail-freight activity would contribute to spinoff jobs.

“This new metals recycling facility is bringing new life and new jobs to an empty site that was once bustling,” said Senator Timothy M. Kennedy. “By taking a vacant industrial facility and putting it to good use, Buffalo Shredding is highlighting the opportunities for economic rejuvenation and job growth that can be achieved through creative re-use initiatives like this. The strategic use of low-cost hydropower will help our region capitalize on the potential of this industry. I want to thank the Power Authority for its support of this endeavor.” 

“The pending conversion of the vacant ArcelorMittal Steel Mill into a new robust metals recycling facility is great news and a sign of our area’s perseverance and nimbleness in the face of a difficult economy,” said Assemblyman Kevin Smardz.  “It’s great to see that this new business is poised for success and that the New York Power Authority is helping to advance it with an allocation of low-cost Niagara hydropower.  This is much appreciated.”     

“The Power Authority continues to apply its best efforts to maximize the benefits of available hydropower for spurring capital investments and jobs on the Niagara Frontier,” said D. Patrick Curley, a NYPA trustee from Orchard Park. “My fellow trustees and I were delighted to approve the allocation of power to Buffalo Shredding for the new metals recycling facility.  It is one more example of the enormous value of the Niagara project as an economic development engine for the region’s economy.” 

The allocation of hydropower to Buffalo Shredding will be drawn from NYPA’s Expansion Power Program.  Expansion Power is one of two blocks of industrial power from the Niagara project—the other amount is called Replacement Power—that account for more than one-third of the hydroelectric project’s firm generating capacity and are linked to tens of thousands of jobs in Western New York. The power from the two programs is provided at rates typically 50 percent lower than current wholesale market prices, in return for capital investments and job commitments, as provided for under New York State law. 

More than 100 of the Buffalo-Niagara region’s foremost companies benefit from Niagara hydropower.  The companies have an annual payroll of more than $2 billion.  Those firms account for more than 70 percent of the manufacturing jobs in the region.

About NYPA:

■ The New York Power Authority 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 public power organization, with 17 generating facilities in various parts of New York State and more than 1,400 circuit-miles of transmission lines. ■ Approximately 80 percent of the electricity it produces is clean renewable hydropower.  Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state. ■For more information, www.nypa.gov.


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