NEWS

N.Y. Power Authority Trustees Award First Power Proceeds Grants for Entrepreneurial and Manufacturing Efforts in WNY

Contact:
Paul DeMichele
(914) 390-8186
paul.demichele@nypa.gov


May 21, 2013

FOR IMMEDIATE RELEASE

WHITE PLAINS—The New York Power Authority (NYPA) Board of Trustees Tuesday approved more than $6 million of funding awards to three Western New York enterprises—the first grants under legislation signed into law last year by Governor Andrew M. Cuomo for applying the net earnings from unutilized power from the Niagara Hydroelectric Power Plant to spur capital investments and job creation in the region.

The action by the NYPA trustees follows the recommendations by the Western New York Power Proceeds Allocation Board (WNYPPAB) on May 13 for awards to Launch NY, a Buffalo nonprofit venture development organization that is dedicated to accelerating the growth of high-potential startup companies in the region; Coolture, a manufacturer of medical cooling apparel, also in Buffalo; and to Diversified Manufacturing Inc., a fabrication, machining and assembly shop in Lockport. (The Governor’s office announced the proceeds board’s recommendations last week.)

“These Western New York power proceeds grant awards, and others that we’re anticipating in the future, are another means beyond our low-cost power allocations to further job creation and capital investments in the Buffalo-Niagara region,” John R. Koelmel, NYPA chairman, said. “The grants are an extension of the Western New York Regional Economic Development Council’s plans to inject new vigor into the region’s economy as part of Governor Cuomo’s vision for a Western New York economic resurgence and optimizing job opportunities for its residents.”

“Economic development continues to be a focal point of Governor Cuomo’s efforts in Western New York, for which the Power Authority is fully engaged in, working closely with Empire State Development and the Western New York Regional Economic Development Council,” Gil C. Quiniones, NYPA president and chief executive officer said. “The first funding awards from the net earnings of unutilized hydropower are another step in the broad efforts under the Governor to revitalize the area economy.”

Last year’s Western New York Power Proceeds Act authorized NYPA to deposit the net earnings from the market sale of unutilized electricity from two hydropower programs—Expansion Power (EP) and Replacement Power (RP)—into an established Western New York Economic Development Fund. The fund has already accrued more than $23 million.

Launch NY, which is associated with the University of Buffalo, will receive more than $5.4 million to be used as seed capital to assist innovative Western New York startups gain market traction in their commercializing of transformational technologies and ideas.

Launch NY is modeled after a highly successful business incubator program established by JumpStart, Inc., a nationally recognized Cleveland nonprofit that has accelerated the success of high-growth companies in Northeast Ohio by directly investing in those firms to increase their economic impact. Those efforts have led to the creation or retention of thousands of jobs.

“Launch NY provides innovative startup companies with managerial and financial resources during the critical transitional period after they’ve developed or advanced a technology and are formulating plans to commercialize it,” said John Seman, chief executive officer, Launch NY.  “The Western New York Power Proceeds funding grant approved by the New York Power Authority trustees will greatly advance our efforts, which are all about growing and diversifying the region’s economy and creating new jobs.”

Previous funding in support of Launch NY’s incubator efforts for startups has been obtained through the federal government and the Western New York Regional Economic Development Council. The venture capital organization intends to hold a competition for the disbursement of the proceeds grant in Western New York for the best business plans by startups and small businesses looking to expand.  It will receive portions of the grant as it identifies startup companies for financing.

“It is important that NYPA’s award of Western New York Power Allocation funds is consistent with the Western New York Regional Economic Development Council strategies and priorities, and today’s approval demonstrates that,' said Howard Zemsky, co-chair of the Western New York Regional Economic Development Council.  “Western New York’s varied economic strengths, including top research universities and institutions, an educated and skilled workforce, low-cost hydropower, supportive local and state governments, and unparalleled access to two Great Lakes, make it fertile ground for technology startups.  The grant award to Launch NY, an organization dedicated to boosting early-stage companies engaged in innovative technologies, and our partner in what will be the largest business plan competition in the U.S, are just the solutions our region needs to nurture new job-producing industries.”

“The strength of the new, emerging Western New York economy will be its diversity. The power proceeds grant awards announced today not only help sustain two existing companies, including Diversified Manufacturing who will retain 145 jobs in the 62nd Senate District, but  the award to Launch NY will also help position our region as a major attraction for young startup companies, said Senator George Maziarz, chairman of the Senate Energy and Telecommunications Committee. “I applaud the Western New York Power Proceeds Board, Governor Cuomo and the New York Power Authority Trustees for their actions.”

“The initial proceeds grant awards approved by the NYPA trustees will strengthen the efforts led by Governor Cuomo to diversify and expand Western New York’s economy,” said Assemblyman Dennis Gabryszak. “When fully realized, these awards will sustain our economic growth, while producing well-paying jobs for Western New Yorkers.”

As an additional measure to maximize the benefits to the Buffalo-Niagara region of the funding award to Launch NY, the NYPA trustees directed the Power Authority staff to include a contractual provision for the firm to invest a fair portion of any return on investment in economic development endeavors in Western New York.  The intent is to create evergreen funding from the investment returns, to continue to seed new companies in the 30-mile radius of the Niagara power plant.

The other two enterprises designated for the first Western New York proceeds awards—Coolture and Diversified Manufacturing—will receive a total of up to $800,000 to support approximately 150 jobs and capital expansion plans for their manufacturing operations.

Coolture cooling apparel helps manage the side effects of heat and promotes comfort, which is particularly helpful to those who may be susceptible to the debilitating effects of the hot weather. The Buffalo company, which is experiencing increased product demand, is planning to invest $3.1 million to ramp up production capability and growth, leading to the creation of 32 new jobs.

Diversified Manufacturing, which provides a full range of engineering services for the power generation, aerospace, medical and pharmaceutical sectors, among other industries, is planning a 45,000-square-foot addition to its Lockport plant that will facilitate its retention of 145 jobs.

The WNYPPAB recommended the awards on the basis of its review of 18 applications for power proceeds funding. The applications were vetted in accordance with requirements established by last year’s legislation, which stipulates that eligible applicants be within a 30-mile radius of the Niagara power plant and that the proposed initiatives support the growth of businesses and lead to the creation or protection of jobs. The proceeds board also considered the extent to which the awards would be consistent with the strategies and priorities of the regional economic development councils.

NYPA contracts with awardees will include provisions for periodic audits to ensure that the funds are used for the stated economic development purposes.

Of the 695 megawatts (MW) of power from the Niagara Hydroelectric Power Plant that is provided for under state law for the EP and RP programs, 587 MW are now being utilized by more than 100 major Western New York businesses in support of tens of thousands of jobs in the region. The remaining 108 MW are currently not utilized by the region’s businesses, providing the source of the market-sale net earnings being deposited by NYPA into the Western New York Economic Development Fund.

About NYPA:

The New York Power Authority has been designated as the lead entity via Executive Order 88 by Gov. Andrew M. Cuomo to form a central management and implementation plan to carry out his  Build Smart NY plan to reduce energy use by state facilities by 20 percent by 2020. ■ NYPA 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 the nation's largest state public power organization, through the operation of its 16 generating facilities in various parts of New York State, participation in a unique public/private partnership to contract for power from a clean generating plant in Queens, and its operation of more than 1,400 circuit-miles of transmission lines. ■ More than 70 percent of the electricity NYPA 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 visit www.nypa.gov or follow @NYPAenergy on Twitter.

 




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