Jan 16, 2012 Jason Emerson Uncategorized
In an effort to cut costs, the Skaneateles Recreation Charitable Trust wants to contract with the village municipal power system to supply electricity to the Skaneateles YMCA and Community Center. The only problem – National Grid is challenging the SRCT’s right to opt out of its current contract.
This disagreement led the Skaneateles village board on Jan. 12 to approve a contract with an Albany-based law firm to assist the SRCT in its efforts to switch to municipal power.
“National Grid is resisting the efforts of the Skaneateles Recreation Charitable Trust, so they need help from attorneys to work this out,” said Skaneateles Village Attorney Michael Byrne. “This lawyer knows how to do it, and we’re optimistic it will get done.”
The potential yearly savings to the SRCT by the switch would be “substantial,” and would for the first time in more than 10 years make the YMCA financially viable, said SRCT President Charlie Wallace.
The Skaneateles Community Center has been working since its creation in 2001 under a long-term contract with National Grid for gas and electric services. At the time it opened, the community center was run by the town as part of its parks and recreation program, but the YMCA took over operations in 2010. The SRCT has always owned the facility.
During its entire existence, the community center has been running with large yearly losses, about $150,000 to $200,000 under the town and about $100,000 to $150,000 under the YMCA, Wallace said.
“The YMCA has made huge strides in reducing our yearly losses,” Wallace said. “They’ve done a lot to increase membership and reduce expenses, but there is still a big issue as to the financial viability of the operation, and the last big issue is the electrical cost. It is substantial.”
Village municipal electric rates for commercial customers are $.0344 per kilowatt hour in summer and $.0465 per kilowatt hour in winter. The National Grid electric rates for commercial customers are about four times that amount, according to one source.
The SRCT cannot divulge what it pays National grid per kilowatt hour under terms of its contact, Wallace said. National Grid would not comment on the rates it charges the YMCA.
The Skaneateles YMCA currently spends 15 percent of its operating expenses on electricity and gas, while by comparison the Auburn YMCA spends 3.5 percent, said Executive Director Dorothea Hughes.
These operating expenses include year-round cooling of the ice rink and year-round heating of the indoor pool, and Hughes conceded that the YMCA does need to be more energy efficient and is working towards that goal. “But,” Hughes added, “We don’t have very favorable electrical rates,” although she could not give the specific rate charges. “It would be huge for us to be able to operate this facility on a break-even basis.”
In fact, the cost savings to the YMCA by switching to municipal power from National Grid would about completely cover its yearly losses of $100,000 to $150,000, Wallace said.
The SRCT has been talking to the village for several months about switching to municipal power. The YMCA is entitled to use village service because it is located within village limits.
“It’s our understanding it is our right to do this,” Wallace said. “[National Grid’s] perspective is they have a very substantial customer with us and they have an agreement to provide electric service so they don’t want to lose that customer. They put in the infrastructure and invested in bringing the power. Whether they can stop us is to be determined.”
National Grid released a statement that it “has provided service to the Community Center for many years and we are aware of the matter. We strive to protect the interests of our customers and hope for a positive resolution,” said spokesperson Virginia Limmiatis.
There is a precedent for National Grid resisting such a changeover of one of its customers to municipal power, which is why the village agreed to consult with the Albany law firm of Read & Laniado, Byrne said. The firm specializes in regulatory matters concerning electrical facilities and municipalities.
Failure to switch electricity providers from National Grid to village municipal would not cause the Skaneateles YMCA to shut down, but the SRCT would have to undertake “major fundraising” every year to cover its annual losses, Wallace said.
Both the SRCT and the village are optimistic that the YMCA will be allowed to convert to municipal power; it is just a matter of when it will occur. The SRCT hopes to make the switch within the next six months.
But even an agreement to allow the YMCA to move to village electric opens up the new question of how to get the municipal power to the facility, Byrne said.
One possibility is to run a new line up Jordan, Austin and State streets, which would be a “very significant, six-figure cost” to do, and would be paid by the village — and therefore the village taxpayers — because the village is responsible for getting power lines to its customers.
A second possibility is to acquire the current National Grid line and make it an “independent delivery point,” in which the village puts a meter on the side of the YMCA building. National Grid would then bill the village, and the village in turn would bill the SRCT.
Village officials are scheduled to meet with Read & Laniado attorneys on Monday, Jan. 16, for further discussions.
The village board has agreed to share legal costs with the SRCT, with a limit of $5,000. If fees go above that, the trustees would need to revisit the approval, Byrne said.
Jason Emerson is editor of the Skaneateles Press. He can be reached at firstname.lastname@example.org.
Jason Emerson is editor of the Cazenovia Republican and Eagle Bulletin newspapers.