For local folks, the availability of electrical power here is never far from view.

With the thundering falls, the Niagara Power Project and countless miles of transmission lines criss-crossing the area, it would seem that electricity should be plentiful and cheap. The reality, however, is that while power is plentiful here, it’s not always cheap.

The price of power in the Niagara Region is reflected primarily in the monthly bills residents receive from the local electric and gas utility company, National Grid. The total cost of electricity comes from a laundry list of charges, surcharges, taxes, tariffs, fees and adjustments.

It can be dizzying trying to decipher what you’re paying and why.

Billing basics

It’s no easy task to break down any utility bill, but National Grid does try to simplify it by dividing its various charges into the categories of “delivery services” and “supply services.” Yet, there are still hidden costs.

Simply put, delivery services are the charges you pay for having electricity brought into your home. Supply services are the actual costs you pay for the power you use.

National Grid operates strictly as a service provider. It does not generate any of the electricity it delivers to local residents.

Raw electricity is purchased from so-called Energy Supply Companies or ESCOS. New York deregulated ESCOS, so consumers can chose who they want to buy their power from.

However, with choice comes the need to understand how the electrical commodity market works.

It’s not simple. Just ask California residents who saw explosive increases in the cost of power and rolling blackouts when energy traders at Enron began manipulating the rates.

“Customers can purchase energy form ESCOS and we’re the folks who get it there,” National Grid spokesman Steve Brady said. “Or they can choose to have us purchase the power for them and deliver it.”

For the moment, a majority of National Grid customers choose to let the utility company do their electricity shopping for them.

“If we do the purchasing, customers can choose either a market rate or standard rate plan,” Brady said. “The market rates will fluctuate with market pricing and could be high or low. The standard rate is a flat rate that is periodically adjusted to reflect what we have actually paid for the energy.”

Brady said “the huge majority” of National Grid customers use the standard rate plan.

One other thing to note when it comes to your supply services charge, the state Pubic Service Commission requires delivery companies to show the pure cost of the energy on your bills, so the price you see is the price National Grid paid to the ESCOS.

“National Grid makes no profit on the energy side of your bill,” Brady said. “Whatever we pay for it, is what you pay for it.”

Delivery services

Where National Grid makes its money is on what the utility calls delivery services.

“It is the physical network (that brings electricity to your home),” Brady said. “What you pay for delivery services is the cost of the construction and maintenance of that network.”

That means everything from every electrical power pole you see to the fleets of trucks and small army of repair and maintenance workers that keep power flowing. Delivery services also include the costs of call centers, telephone representatives, consumer advocates and a host of other administrative functions.

On an average National Grid bill, supply services represents roughly 40 percent of the total cost. That leaves 60 percent of every dollar you pay going to delivery services.

“People ask why is the delivery side higher than the supply side of the bill,” Brady said. “Well, there’s an explanation for that.”

The 20 percent difference between what you pay for power and what you pay to have it delivered to you is the result of more than a dozen taxes, surcharges, fees, adjustments and assessments. While National Grid takes a little less than 40 cents of every dollar you pay on your bill to keep its network up and running, 21 cents is divided up between virtually every level of government from federal to local.

“It has been an issue for some time that utility bills are used to collect fees and taxes,” Brady said.

Taxes and more taxes

A quick check of your electric bill will leave you wondering where all those taxes are listed.

Here’s the secret, most of them don’t appear as separate lines on the bill, they are added into the delivery services charges. The effect is to make it appear that as much as an extra 20 percent of your bill is actually going to National Grid.

“It’s a difficult thing for us to help consumers understand,” Brady said.

While some of the taxes, fees and other items are targeted to renewable energy research and environmental issues, most provide funding for federal state and local governments.

The greediest of the governments is New York State, which takes no less than four bites of the electrical bill apple totaling between 4 and 8 percent of your bill, depending on whether you are a residential or commercial customer.

Following the state are local governments and school districts. Here, Niagara County slaps a 4 percent sales tax on your bill, the Falls Board of Education gets a 3 percent cut, while the city gets a 1 percent “municipality adjustment.”

The federal government collects just a corporate income tax.

The NYPA question

One burning question for folks in the Falls, when comes to electricity costs, always centers on the power generated by the New York State Power Authority at its Niagara Power Project in Lewiston.

People wonder, with the amount of electricity generated by the power project, why are service rates here not dirt cheap? The answer is, mandates from the federal and state governments control the distribution of 86 percent of the project’s power.

Much of it doesn’t end up here.

Federal law requires that 50 percent of the project’s power be allocated to municipal governments and co-ops. Of that 50 percent, 10 percent must be distributed outside New York.

State law sets aside another 36 percent of the available power generation for so-called replacement power and expansion power, designed to benefit businesses within a 30-mile radius of the falls.

That leaves a mere 14 percent of the power that can be distributed to companies like National Grid and New York State Electric and Gas for use by residential and small farm customers. Within that 14 percent, 3 percent is specifically designated to what are described as the “host communities” of the power project, which include Lewiston, the Falls and the city school district among others.

Currently, NYPA’s discretionary power from its Niagara and St. Lawrence power projects provides 15 percent of National Grid’s residential electricity and 20 percent of the residential power shipped by New York State Electric and Gas.

NYPA Vice President of Corporate Planning and Finance, Don Russak, said the authority is very limited in how it can distribute the power it creates.

“It goes to the issue of ‘why are my (the consumer’s) rates high?’ ” Russak said. “Because the (federal and state) law says so.”

Contact reporter Rick Pfeiffer

at 282-2311, ext. 2252.