The Associated Press

ALBANY - The New York Power Authority on Tuesday dropped its proposals to increase utility rates and pay out $3 million in employee bonuses following pressure by a Republican senator and Democratic Gov. David Paterson.

Republican Sen. George Maziarz of Niagara County created an uproar in western New York media after he testified against the proposals at a public hearing Thursday. On Monday, Paterson called on the independent public authority to reconsider them.

“I think we started a statewide firestorm last Thursday,” Maziarz said. He said he and upstate Sen. Joseph Griffo, an Oneida County Republican, were the only voices of opposition at Thursday's NYPA hearing.

“Here we are, five days later, and the governor is on board, and the Senate majority held a press conference. I'm hoping now this may lead to the Legislature rescinding the sweep.”

Paterson called it a responsible decision by NYPA in extraordinarily difficult times for New Yorkers.

“We have a responsibility in government to hold ourselves accountable to taxpayers,” Paterson said in a statement.

Maziarz says the “sweep” of $544 million in unused cash from NYPA a month ago to fill a deficit in the state's general fund is to blame for the proposed rate increase. NYPA says the two are unrelated and the unused cash voluntarily contributed to the state budget couldn't have been used to avoid an increase.

The transfer was approved by Paterson, Democratic Assembly Speaker Sheldon Silver of lower Manhattan and Democratic Senate Majority Leader Malcolm Smith of Queens.

There was no immediate comment from NYPA about its decision, first reported by The Buffalo News.

On Monday, Paterson told the NYPA CEO he recommended for the job, Richard Kessel, that during a serious recession and with rising unemployment, both the rate hike and the planned employee bonuses were inappropriate. The NYPA calls the bonuses “variable pay.”

Kessel promised serious consideration of the request by the board, which has two Paterson appointees, one by former Democratic Gov. Eliot Spitzer, and two appointed by former Republican Gov. George Pataki.

Maziarz has said the rate increase will cost a typical household $3 to $4 a month. NYPA spokeswoman Christine Pritchard has said the typical residential or small farm consumer served by National Grid, New York State Electric & Gas Corp. or Rochester Gas & Electric Corp. would see a rate increase of about 16 cents per month if the proposal is approved. Municipal and rural cooperatives would see an increase of about 72 cents per month.