1.5 Megawatt Power Allocation Supports $87 Million in Capital Investments and Creates 30 Jobs
New York Power Authority Board of Trustees Also Awards Power Proceeds Funding to Erie County Recycling Firm Supporting 15 Jobs
Governor Andrew M. Cuomo today announced an allocation of low-cost hydropower to Sumitomo Rubber USA in Erie County, a subsidiary of one of the largest tire manufacturers in the world. The power allocation supports $87 million in capital investments and creates 30 jobs. The New York Power Authority Board of Trustees approved the low-cost power at its May 2 meeting.
"By providing clean, inexpensive Niagara hydropower to manufacturers in Western New York, we drive job growth and economic development throughout the region," Governor Cuomo said. "Sumitomo’s expansion in Tonawanda will create jobs and help support our efforts to build a sustainable, resilient and affordable energy system for all New Yorkers."
The 1.5 megawatt (MW) hydropower allocation allows Sumitomo to enhance its operations in the Town of Tonawanda. The two-phase expansion project includes the addition of more than 100,000 square feet of new production space, which will enable the firm to increase passenger tire production from 5,000 tires per day to 10,000 tires per day. The improvements at the plant also include use of a wide array of energy-saving technology, including the installation of energy efficient air compressors and LED lighting.
John R. Koelmel, NYPA chairman and Buffalo resident, said, “Western New York is competing for businesses in a global marketplace and our state’s clean hydropower generation provides us critical leverage with big energy users looking to expand in the Buffalo-Niagara region. By lowering energy costs for large manufacturers, companies can reinvest in their operations and continue to thrive here in New York.”
Sumitomo gained full ownership of the manufacturing plant from Goodyear Dunlop Tires North America in 2015. It is the company’s only tire production facility in the U.S. When Sumitomo gained full ownership of the location, it immediately invested $33 million in upgrades and modernization efforts at the plant. It is expected that this current expansion will be completed within the next two years.
Gil C. Quiniones, NYPA president and CEO said, “Sumitomo made its intentions clear when it gained full control of the Tonawanda operation a few years ago—and invested tens of millions into its facility—that it had every intention of remaining a corporate citizen in the Western New York region for years to come. It’s also a tremendous statement from the firm to see that it is using energy-saving technology in its expansion. This not only allows savings in energy costs, it enables the company to reduce greenhouse gas emissions.”
Sumitomo currently receives 12 MW of low-cost NYPA hydropower, which supports roughly 1,240 jobs and $5.1 million annual capital investment from the firm.
Tim Noe, Senior Vice President of Manufacturing for Sumitomo Rubber USA, said, “We are excited to undertake this expansion project and expect that this is the start of more great things to come in the future. I want to extend my thanks to Governor Cuomo and the New York Power Authority for their continued support of Sumitomo’s expansion in Western New York.”
The hydropower allocation is provided under a seven-year contract and drawn from blocks of power from the Power Authority’s Niagara Power Project. Low-cost Niagara hydropower is reserved for companies within a 30-mile radius of the Niagara power plant or for businesses in Chautauqua County. Hydropower allocations are already linked to thousands of jobs in those regions.
The Erie County Industrial Development Agency also approved incentives for Sumitomo for the first phase of its expansion project at its April 26 meeting. Those incentives include a $245,000 sales tax on construction materials and equipment and roughly $800,000 in property tax abatements over the next 10 years.
State Senator Chris Jacobs said, “Few assets are as valuable to economic development and manufacturing as the low-cost hydropower from the Niagara Power Project, and this allocation by the NYPA Board of Trustees to Sumitomo Rubber proves that. The 1.5 megawatt allocation leverages an $87 million investment and expansion that will double the plant’s daily output of passenger tires, increase energy efficiency and create 30 new jobs. That is a great return on the investment of hydropower.”
Erie County Executive Mark C. Poloncarz said, “Low-cost hydropower is a tremendous incentive to business and is part of the reason behind Erie County’s resurgent economy, along with our world-class workforce and desirable business atmosphere. Hydropower draws business to our area and helps it to put down roots and grow for the future. Sumitomo Rubber USA’s decision to expand their footprint in Erie County is great news for our economy and underscores the vitality of our region.”
Tonawanda Supervisor Joseph H. Emminger said, “The Town is very grateful to Governor Cuomo and the New York Power Authority for their allocation of low-cost hydropower to Sumitomo Rubber. The power allocation, along with other state, county and local incentives will enable Sumitomo to expand and bring jobs into the region and continue to be a worldwide leader in the production of tires.”
Tonawanda Recycling Company Power Proceeds Award
At the Power Authority’s Tuesday board meeting, NYPA trustees also approved a $150,000 Western New York power proceeds award to Triad Recycling and Energy Corp, also based in Tonawanda. The recycling and waste management firm is investing more than $1 million to expand its operations, which includes the installation of a wind turbine to produce on-site energy. The project will support 15 jobs, with three of those jobs being newly created.
This award is made possible from net earnings from the sale of unused hydropower from NYPA’s Niagara power plant and stems from legislation signed into law by Governor Cuomo in 2012. To be eligible for power proceeds awards, enterprises must be located within a 30-mile radius of NYPA’s Niagara power plant and the projects must support the growth of business and lead to the creation or protection of jobs. Contracts include provisions for periodic audits to ensure the funds are used for agreed-upon purposes.
Including this latest award to Triad, there have been 42 awards totaling more than $35 million in funding since 2013. Through the end of March, NYPA has provided more than $41 million to the proceeds fund.
NYPA, the largest state public power organization in the nation, operates 16 electricity generating facilities and more than 1,400 circuit-miles of transmission lines. NYPA is a major power supplier for New York State. More than 70 percent of the electricity NYPA produces is clean, renewable hydropower. NYPA uses no tax money or state credit; operations are financed through the sale of bonds and revenues earned in large part through sales of electricity. For more information about the Power Authority visit nypa.gov. Follow NYPA on Twitter @NYPAenergy, Facebook, Instagram, Tumblr and LinkedIn.