1.
Approval of the Minutes
The minutes of the Regular Meeting of January 31,
2006 were unanimously adopted.
2.
Financial Reports for the Year Ended December 31, 2005 and
the Month of January 31, 2006
Mr. Bellis presented an overview of the reports
to the Trustees. In response to a question from Chairman Seymour, Mr.
Bellis said that the disparity between the budgeted and actual figure for
ISO energy revenues in January was primarily due to the facts that loads had
been down due to the warmer-than-expected weather and natural gas prices had
been substantially lower than expected.
3.
Motion to Advance for Consideration Agenda Item #13 – Allocation of
10,000 kW of Hydro Power – Made, Seconded and Unanimously Approved
“Mr. Chairman I move that Agenda Item #13,
Allocation of 10,000 kW of Hydro Power, be advanced for consideration to
permit State Senator George D. Maziarz and Michael W. Tucker, Mayor of
Lockport, to address the Trustees on the matter.” Upon completion of
comments, a motion was made and seconded to resume the meeting in scheduled
order.
4.
Allocation of 10,000 kW of Hydro Power
The President and Chief Executive Officer
submitted the following report:
SUMMARY
“The Trustees are requested to approve an
allocation of available Expansion Power (‘EP’) totaling 10,000 kW to Delphi
Automotive Systems, LLC (‘Delphi’) under criteria for the evaluation of
applications for power allocated for the revitalization of industry.
BACKGROUND
“Under Section 1005 (13) of the Power Authority
Act, as amended by Chapter 313, the Authority may contract to allocate or
reallocate directly, or by sale for resale, 250 MW of firm hydroelectric
power as EP to businesses in the State located within 30 miles of the
Niagara Power Project, provided that the amount of EP allocated to
businesses in Chautauqua County on January 1, 1987 shall continue to be
allocated in such county.
“Each application for an EP allocation must be
evaluated under criteria that include, but need not be limited to, those set
forth in Public Authorities Law Section 1005 (13) (a), which sets forth the
eligibility, and (b), which sets forth the criteria for revitalization.
“Among the factors to be considered when
evaluating a request for revitalization purposes are whether or not the
business is likely to partially close or relocate, resulting in loss of
jobs, whether or not the business is an important employer in the community
and whether or not the business has pursued other available sources of
assistance to reduce energy costs.
“Delphi is the largest private employer in
Niagara County, supporting approximately 4,000 jobs. Since 1937, the
company has been at its current site, where it manufactures components for
automotive heating and cooling systems. The current business situation is
grave. The Lockport site was faced with an operating loss last year and its
overall profitability has been in a downward trend since 1995. Delphi
Lockport’s revenue stream is very closely linked to General Motors (‘GM’),
with more than 96% of the site’s sales volume tied to GM. The Lockport
plant has applied to the Authority for an allocation of EP for
revitalization purposes.
DISCUSSION
“Delphi currently receives 14.3 MW of Authority
EP in exchange for a commitment to retain 5,480 jobs. The contract for this
allocation terminates in 2013. Delphi filed for Chapter 11 Business
Reorganization in October 2005. There are several factors that drove Delphi
North America to seek Chapter 11 relief. Issues specific to its Lockport
site are:
·
Lockport’s high wages relative to its North American
competitors;
·
A $13 million increase in its portion of retiree health care
costs over the past three years;
·
A job bank in 2005 with a total of 400 employees receiving
full benefits and pay while being idle; and
·
Oppressive legacy costs that make the company non-competitive
“In 2005, Delphi Lockport initiated a two-year
revitalization plan that included a request for an additional 10 MW of
Authority hydro power.
“A major concern for the Authority regarding the
requested allocation involves a 1995 Settlement Agreement among the
Authority, New York State Electric and Gas Corporation (‘NYSEG’) and Delphi
(‘1995 Settlement Agreement’). Delphi has informed the Authority of its
desire to terminate the 1995 Settlement Agreement. A document effecting
such termination is currently being drafted by Delphi and NYSEG’s legal
counsel and is subject to the Authority’s approval.
“In assessing Delphi’s revitalization plan, the
Authority has determined that the Lockport facility meets the criteria for a
revitalization allocation. Consequently, a recommendation for an allocation
of 10 MW of hydro power is appropriate. It is recommended that the approval
of the 10 MW under the revitalization criteria be contingent on the
Authority’s approval of the final agreement regarding the 1995 Settlement
Agreement. The Authority will not incur any new obligations as a result of
terminating the 1995 Settlement Agreement.
“On October 22, 2003, the Authority, National
Grid (formerly Niagara Mohawk), Empire State Development Corporation and the
Buffalo Niagara Enterprise signed a Memorandum of Understanding (‘MOU’) that
outlines the process to coordinate marketing and allocating Authority hydro
power. The entities noted above have formed the Western New York Advisory
Group (‘Advisory Group’) with the intent of better using the value of this
resource to improve the economy of Western New York and the State of New
York. Nothing in the MOU changes the legal requirements applicable to the
allocation of hydro power.
“Based on the Group’s discussions, staff
recommends that the available power be allocated to Delphi. The project
will help maintain Western New York’s industrial base. Although the base
job numbers will be reduced from 4,000, this leaner approach to operations
will help ensure Delphi’s ability to compete in the future.
RECOMMENDATION
“The Director – Business Power Allocations,
Regulation and Billing recommends that the Trustees approve the allocation
of 10,000 kW of Expansion Power to Delphi Automotive Systems, LLC, for a
five year term, contingent on the Authority’s approval of the final
agreement to terminate the 1995 Settlement Agreement.
“The Executive Vice President and General
Counsel , the Senior Vice President – Marketing, Economic Development and
Supply Planning, the Vice President – Major Accounts Marketing and Economic
Development and I concur in the recommendation.”
Mr. Pasquale presented the highlights of staff’s
recommendations to the Trustees and then introduced New York State Senator
George D. Maziarz and Mayor of Lockport, Michael W. Tucker. Responding to a
question from Chairman Seymour, Mr. Carline said that the 1995 settlement
agreement came out of an antitrust suit brought by General Motors against
New York State Electric and Gas Corporation (“NYSEG”) and the Authority. In
response to a concern expressed by Trustee Townsend that the conditional
terms of the resolution approving the allocation might delay the allocation,
Mr. Carline explained that the resolution before the Trustees for
consideration is structured to accommodate the terms of the new agreement
being negotiated to replace the 1995 settlement agreement. Mr. Carline said
that staff has seen the final new agreement, expects that it will be
finalized by April 1, 2006, and that essentially there are no major issues
left to be resolved. Responding to a question from Trustee Cusack, Mr.
Carline said that if it appeared that the April 1st deadline
would not be met, the Trustees would be notified, but that he was optimistic
that the new agreement would be signed by April 1st. A
discussion ensued about the complexity of the issues involved in this
process, including the fact that Delphi has filed for Chapter 11 Business
Reorganization.
Trustee Townsend said that he had received a
letter from Congressman Reynolds in support of this allocation.
Senator Maziarz said that this additional 10 MW
hydro power allocation, if approved by the Trustees, would save a
significant number of high-paying manufacturing jobs in Lockport, where
Delphi employs 4,000, and Rochester, where Delphi employs another 2,000. He
thanked the Authority’s staff for their professionalism in handling this
matter.
The following resolution, as submitted by
the President and Chief Executive Officer, was unanimously adopted.
RESOLVED, That the allocation of 10,000 kW of Expansion Power be, and hereby
is, approved conditioned on execution of appropriate agreements among the
Authority, Delphi and New York State Electric and Gas Corporation revising
the 1995 Settlement Agreement as set forth in the foregoing report of the
President and Chief Executive Officer, the terms of which shall be approved
by the Authority’s Executive Vice President and General Counsel; and be it
further
RESOLVED, That the Chairman, the President and Chief Executive Officer and
all other officers of the Authority are, and each of them hereby is,
authorized on behalf of the Authority to do any and all things and take any
and all actions and execute and deliver any and all agreements, certificates
and other documents to effectuate the foregoing resolution, subject to the
approval of the form thereof by the Executive Vice President and General
Counsel.
5.
Report from the President and Chief Executive Officer
President Carey introduced Mr. Kelly, the
Authority’s new Executive Vice President and General Counsel, saying that
Mr. Kelly’s long background in law and government service would serve the
Authority well.
President Carey said that Chairman Seymour and he
had met with State Senators Bruno and Wright, as well as Assembly Speaker
Silver and Assemblyman Tonko, in an effort to establish a working dialogue
with the State Legislature.
Because of the recent Power for Jobs (“PFJ”)
program rate increases, the Authority agreed to announce and implement a
procedure by which PFJ customers that wish to terminate their PFJ agreements
without the standard one-year’s notice may do so.
According to President Carey, the Syracuse
Post-Standard newspaper has been working for several months on what is
likely to be at least a two-part series of articles on the Authority.
Authority management and staff have cooperated with all requests made by the
reporter working on the articles and have provided all documentation
requested.
President Carey said that Chairman Seymour and he
had recently visited the Vernon Boulevard Small Clean Power Plant site.
Silvercup Studios in Queens is exercising an option to purchase property
nearby the plant and it is anticipated that Mayor Bloomberg will request
that the Authority move it. Chairman Seymour added that it is not
anticipated that the Mayor will be requesting the plant be removed until
early October 2006.
6.
Amendment to the Authority’s By-Laws
The President and Chief Executive Officer
submitted the following report:
SUMMARY
“The Trustees are requested to amend the
Authority’s By-laws to implement certain requirements of the Public
Authorities Accountability Act of 2005 and senior management changes.
“For the reasons set forth below, the Trustees
are requested to approve the following amendments to the Authority’s
By-laws:
(1) Amend Article II,
Section 2 to expressly set forth the Trustees’ existing powers to oversee
the ethical, financial and operational management of the Authority and add a
requirement that the Trustees annually review and establish compensation and
benefits for senior management, as well as time and attendance policies;
(2) Amend Article III,
Section 5 to increase the quorum requirement from three to four trustees;
(3) Amend Article IV,
Section 1 to provide for the appointment of a Chief Operating Officer, as
well as a separate Executive Vice President and General Counsel and a
Secretary;
(4) Amend Article IV,
Section 2 to provide for the appointment of the Chief Operating Officer by
the board of trustees as well as for the appointment of all non-elected
officers of the Authority by the President and Chief Executive Officer,
except for certain appointments by the Executive Vice President and General
Counsel, the Secretary and the Audit Committee;
(5) Amend Article IV,
Section 3 to provide for the term of office of the Chief Operating Officer;
(6) Amend Article IV,
Section 5 to provide for the removal by the President and Chief Executive
Officer, the Executive Vice President and General Counsel, the Secretary or
the Audit Committee of certain appointed employees with or without cause;
(7) Amend Article IV,
Section 6(A) to establish the role of the Chairman in implementing the
Trustees’ management oversight function;
(8) Amend Article IV,
Section 6(D) to provide for the establishment of the Office of Internal
Audit and Corporate Compliance and the reporting responsibilities of its
Director;
(9) Amend Article IV,
Section 6(E) to provide for the reporting relationship and the duties of the
Executive Vice President and General Counsel;
(10) Amend Article IV,
Section 6(F) to provide for the reporting relationship and duties of the
Secretary;
(11) Amend Article V,
Section 1 to add the Chief Operating Officer to the Executive Management
Committee and to provide for the appointment of non-listed members of such
Committee by the President and Chief Executive Officer;
(12) Add a new Section 3
to Article V to establish a new Governance Committee of the Board and to
provide for its duties and responsibilities;
(13) Amend Article VII,
Section 2 to provide for the development of an annual strategic plan by the
Executive Management Committee; and
(14) Amend Article X,
Section 1 to provide for the appointment of all regional managers and site
executive officers by the President and Chief Executive Officer.
“The amended By-laws are set forth in Exhibit
‘6-A1’ attached hereto. A redlined version with strikethroughs denoting
deletions and underlining reflecting new language is attached as Exhibit
‘6-A2.’
“The Trustees are also requested to adopt a
Charter for the new Governance Committee of the Board (Exhibit ‘6-B,’
attached hereto), which Charter will authorize the Committee to oversee the
activities, policies and procedures of the ethics, procurement and real
estate staff of the Authority. Under the Public Authorities Accountability
Act of 2005 (the ‘Act’), signed into law by Governor Pataki on January 15,
2006, all public authorities are required to establish such governance
committees. The Trustees are also requested to amend the Audit Committee
Charter (Exhibit ‘6-C,’ attached hereto) to make its oversight role
consistent with the requirements of the Act and to provide for certain
periodic reports by the Inspector General/Director of Security.
BACKGROUND
“The Act amended Public Authorities Law Section
1004 to delete the provision that allowed the Chairman of the Authority to
serve as an employee of the Authority. Pursuant to Section 1004, the
Chairman was elected in the past as Chief Executive Officer. This will no
longer be possible under the Act and the By-laws need to be amended to
reflect this fact. Thus, many of the proposed amendments delete powers
given to the Chairman to act as President and Chief Executive Officer. In
addition, many of the proposed By-laws amendments reflect the fact that the
duties of the Executive Vice President and General Counsel and the Secretary
will be handled by separate individuals.
“The Act also includes a number of new
requirements for all public authorities that need to be addressed. These
include, among other things, requirements that public authority boards
provide: (1) direct oversight of the effective and ethical management of the
authorities, (2) policies governing the annual review of the salary and
compensation of senior managers and time and attendance, (3) for codes of
conduct to be adopted, (4) for written policies protecting whistle blowers,
governing investments, providing for the acquisition and disposal of real
property, procurement procedures and the defense and indemnification of
officers and (5) for state-authorized training on legal, fiduciary,
financial and ethical issues. The Act also requires public authority boards
to establish audit and governance committees, and provides for a public
authority Budget Office and an independent Office of Inspector General for
public authorities.
“The Board currently performs a strong oversight
role at the Authority. It has also adopted a Code of Conduct, as well as
policies governing investments, defense and indemnification of officers, and
guiding real estate and procurement activities at the Authority. Further,
staff is in the process of reviewing all of these policies to make sure they
are consistent with the Act. However, to provide for additional oversight
over the activities of senior management in the code of conduct, procurement
and real estate areas, it is proposed that the Board establish a new
Governance Committee for that purpose and elect two trustees to serve on
that Committee.
“Further, the Act requires that boards of public
authorities provide effective oversight of management activities of internal
audit and the inspector general. The Audit Committee currently performs
this function. However, to strengthen the role of this Committee, it is
proposed that the Committee be authorized to appoint the Director of
Internal Audit and Corporate Compliance and to select and recommend to the
full board the firm to be hired as the Authority’s outside auditor.
DISCUSSION
“The Authority has long been in the forefront of
implementing sound corporate governance and ethical principles in its
day-to-day operations. For example, in 1984 the Authority adopted a Code of
Conduct for employees that expanded on the ethical rules and standards found
in Sections 73 and 74 of the State’s Public Officers Law. Further, in 1989,
the Trustees adopted an Internal Audit Program Corporate Policy to guide the
efforts of then newly created Office of Internal Audit. And, in 1997, the
Trustees provided for the establishment of the Office of Inspector General
at the Authority, as well as for the establishment of the Office of Ethics
and Regulatory Compliance. All three of these offices work to ensure that
the Authority’s internal controls and ethical standards of conduct are fully
compliant with good government principles and that all employees follow
these controls and standards. Further, the managers of all three offices
have regularly reported to the Audit Committee of the Board. Finally, in
2003, the Board adopted a corporate policy requiring the disclosure of the
names of persons who attempt to influence the Authority’s procurement
process.
“To build on this solid record of accomplishment
and to implement the principles developed by the Act, it is proposed that a
new Governance Committee of the Board of Trustees be established to (1)
oversee Authority management and policies relating to ethical conduct, (2)
update and revise the Authority’s Code of Conduct, (3) review and update the
Authority’s policies on procurement of goods and services and on the
acquisition and disposal of real and personal property and (4) adopt a
corporate policy on the protection of whistleblowers from retaliation. It
is contemplated that this Committee will meet at least three times per year
and, among other things, receive regular reports from the Vice President –
Ethics and Regulatory Compliance and the Vice President – Procurement and
Real Estate.
“Likewise, it is proposed that the Audit
Committee be authorized to oversee the activities of Internal Audit, the
Authority’s outside auditors and the Office of Inspector General and receive
reports at least three times per year from the Director of Internal Audit
and Corporate Compliance and the Inspector General/Director of Security.
RECOMMENDATION
“The Executive Vice President and General
Counsel, the Executive Vice President and Special Counsel to the Chairman,
the Executive Vice President – Corporate Services and Administration, the
Secretary, the Chief Financial Officer, the Inspector General/Director of
Security, the Treasurer, the Vice Presidents of Ethics and Regulatory
Compliance and Procurement and Real Estate, the Director of Internal Audit
and Corporate Compliance and I recommend that the Trustees approve the
proposed By-laws amendments as well as the amendment to the Audit Committee
Charter and the adoption of the proposed Charter for the new Governance
Committee.”
Mr. Clemente presented the highlights of staff’s
recommendations to the Trustees.
In response to a question from Chairman Seymour,
Mr. Clemente said that one of the changes to the By-laws would separate the
office of the Secretary from that of the General Counsel, with the Secretary
reporting to the Chairman and the Trustees and the Executive Vice President
and General Counsel reporting to the President and Chief Executive Officer
and the Chairman.
Vice Chairman McCullough said that he would
recommend that the membership of the Audit Committee be increased from two
to three Trustees, once additional Trustees have been appointed and
confirmed.
President Carey requested that the recommended
changes to the Audit Committee charter be postponed until the annual meeting
in April, when there will be additional changes to the Audit Committee
charter. He also asked that nominations to the Governance Committee be made
at the March meeting, when two more Authority Trustees are likely to have
been confirmed.
The following resolution, as submitted by
the President and Chief Executive Officer, was unanimously adopted.
RESOLVED, That the revisions to the By-Laws, which By-laws were adopted
February 29, 1989, and last amended in April 30, 2002, and which revisions
are discussed in the foregoing report of the President and Chief Executive
Officer and are attached hereto as Exhibit “6-A1,” be hereby adopted; and be
it further
RESOLVED, That the Trustees approve the proposed Charter for the Governance
Committee as substantially set forth in Exhibit “6-B” hereto; and be it
further
RESOLVED, That the Trustees approve the revisions to the Audit Committee
Charter as substantially set forth in Exhibit “6-C” hereto; and be it
further
RESOLVED, That the President and Chief Executive Officer, the Executive Vice
President and General Counsel, the Secretary, the Chief Financial Officer,
the Inspector General/Director of Security, the Treasurer, the Vice
Presidents of Ethics and Regulatory Compliance and Procurement and Real
Estate, the Director of Internal Audit and Corporate Compliance and their
designees, are hereby authorized to take all actions and to do all things
necessary to implement such amended By-laws and to assist the operations and
oversight functions of such Audit and Governance Committees.
7.
Productivity Improvement Request Reductions
The President and Chief Executive Officer
submitted the following report:
SUMMARY
“It is requested that the Trustees approve
reductions to the employment commitment for each of the seven companies
listed in Exhibit ‘7-A.’ These customers have clauses in their contracts
that allow them to request a reduction in their commitments if the reduction
is due to productivity improvements. Each of the seven companies that made
the productivity improvement requests met the appropriate criteria.
BACKGROUND
“Each year, Authority staff initiates a review
of all business power allocations and the customers’ performance against
agreed-upon job commitments. In 2004, the Authority had 303 contracts with
195 business customers, excluding Power for Jobs (‘PFJ’) agreements. In
2004, seven customers (with 17 contracts) requested a reduction to their
base employment commitments due to productivity improvements made during the
reporting period.
“The contracts contain a customer commitment to
retain or add a specific number of jobs. A company may request a
productivity review to have its job commitment reduced if the reduction in
employment is due to increased efficiency or improved technology.
Relocation of specific activities away from the facility will not be
considered an increased efficiency, improved technology or productivity
improvement. Employment reductions made due to reduced production or sales
volume will not be considered an increased efficiency, improved technology
or productivity improvement.
DISCUSSION
“Staff recommends that the Trustees approve
action regarding the seven customers meeting the productivity improvement
requirement for a reduction to their employment commitments in 17 contracts.
Brief descriptions of those companies that meet the productivity
improvement employment reduction requirements are listed in Section I.
“A summary of all contracts discussed in this
item is provided as Exhibit ‘7-A.’
Section I.
Allocations to Continue with Job Commitment Changes for Productivity
Improvements
American Axle and Manufacturing Inc.,
Tonawanda, Erie County
Allocation: 3,250 kW of Expansion Power
(‘EP’), as well as 2600 kW and 1300 kW of Replacement Power (‘RP’)
Jobs Commitment: 680 jobs
Background: American Axle and Manufacturing
Inc. (‘American Axle’) manufactures automobile driveline and chassis systems
and components, including axles and drive-shafts for light trucks and SUVs.
The Tonawanda facility forges ring gears and axle-shafts. The facility
requested a productivity improvement reduction to its employment commitments
of 12 employees. The Tonawanda facility installed four new robotic net
shape gear presses, replacing the need for 12 workers. For the past year,
American Axle averaged 737.00 jobs, i.e., 108.38% of its commitment.
Recommendation: Staff recommends that the
Trustees reduce American Axle’s EP and RP allocations employment commitments
by 12 jobs to 668 positions.
Delphi Automotive Systems, Lockport,
Niagara County
Allocation: 14,300 kW
of EP
Jobs Commitment: 5,480 jobs
Background: Delphi Automotive Systems
(‘Delphi’), formerly a division of General Motors, manufactures radiators,
condensers and heaters for General Motors automobiles. Delphi went into
bankruptcy this year. The company requested a productivity improvement
reduction of its job commitment by 234 jobs. The reductions were
accomplished through rebalancing job duties, new methods of manufacturing
parts and restructuring of a workstation. For the past year, Delphi
averaged 4,346.46 jobs, i.e., 79.31% of its contractual commitment.
Recommendation: Staff recommends that the
Trustees reduce Delphi’s EP allocation employment commitment by 234 jobs to
5,246 positions.
Ford Motor Company, Buffalo, Erie County
Allocation: 4,300 kW
of EP and 2,900 of EP
Jobs Commitment: 1,966 jobs
Background: Ford Motor Company (‘Ford’) opened
its Buffalo Stamping Plant in 1950. Currently, Ford stamps doors, floor
pans, quarter panels and some inner body components for the Windstar, Taurus
and Crown Victoria models. The components then go to other Ford assembly
plants and distribution centers throughout the U.S. and Canada. For the
past year, Ford averaged 1,741.00 jobs, i.e., 88.56% of its contractual
commitment. The company requested a productivity improvement reduction of
its job commitment by 97 jobs. Ford’s reduction comes from automation of
the inspection of parts and various handling processes, as well as new
manufacturing processes.
Recommendation:
Staff recommends that the Trustees reduce
Ford’s EP allocation employment commitment by 97 jobs to 1,869 positions.
General Motors Corporation – Powertrain,
Buffalo, Erie County
Allocation: 13,800 kW, 1,100 kW and 800 kW of
EP and 2,000 kW and 725 kW of RP
Jobs
Commitment: 3,706 jobs (13,800 kW), 3,470 (1,100 kW, 800 kW
and 725 kW) and 3,470 base jobs and 44 created jobs (2,000 kW)
Background: General Motors Corporation –
Powertrain (‘GM Powertrain’) manufactures engines for several of GM’s
automobile models, including the Chevy Colorado and Canyon pick-up. The
company requested a productivity improvement reduction of its jobs
commitment by 66 jobs. The bulk of GM’s reduction comes from replacing an
old engine line with the world’s most advanced engine manufacturing facility
and process for the new engine, as well as from rebalancing job duties along
the assembly lines, automation and new manufacturing processes. For the
past year, GM Powertrain averaged 3,041.75 jobs, i.e., 87.66% of its
contractual commitment.
Recommendation: Staff recommends that the
Trustees reduce GM Powertrain’s EP and RP allocation employment commitments
by 66 jobs to a base of 3,404 positions. The RP allocation that still has
time to create jobs will have its employment commitment reduced to 3,404
base jobs with 44 created jobs (3,448).
Goodyear Dunlop Tire
Company N.A. Ltd., Tonawanda, Erie
County
Allocation:
850 kW and 250 kW of RP and 6,000 kW of EP
Jobs
Commitment: 1,449 jobs,
1,449 jobs and 1,439 jobs, respectively
Background:
Goodyear Dunlop Tire Company N.A. Ltd. (‘Goodyear Dunlop’) manufactures
tires for automobiles and all-terrain vehicles at its Tonawanda facility.
The company requested a productivity improvement reduction of its jobs
commitment by 27 jobs. Goodyear Dunlop accomplished the productivity
improvements through rebalancing job duties (1 position), and new
manufacturing processes and equipment (26 positions). For the past year,
Goodyear Dunlop averaged 1,465.75 jobs, i.e., 101.16%, 101.16% and 101.86%
of its commitments, respectively.
Recommendation: Staff recommends that the
Trustees reduce Goodyear Dunlop’s RP and EP allocation employment
commitments by 27 jobs, with the RP employment commitment reduced to 1,422
positions and the EP employment commitment reduced to 1,412 positions.
Occidental Chemical Corporation,
Niagara Falls, Niagara County
Allocation: 56,000 kW
of RP and 38,700 kW of EP
Jobs Commitment: 250 jobs and 258
jobs, respectively
Background: Occidental Chemical Corporation
(‘Oxy’) is the country’s largest merchant marketer of chlorine and caustic
soda, which is used for the plastics, pulp and paper, water purification,
bleach and sanitation industries. The company requested a productivity
improvement employment commitment reduction. Both allocations are
‘vintage’ contracts, meaning that they have an
80% job ratio and two-year job average. For the past two years, Oxy
averaged 271.84 jobs and 248.75 jobs, i.e., 108.74% and 96.41% of its
contractual commitments, respectively. In 2004, Oxy streamlined its method
of production (11 jobs reduced) and installed new equipment (2 jobs
reduced).
Recommendation: Staff recommends that the
Trustees reduce Oxy’s RP and EP allocation employment commitments by 13 jobs
to 237 and 245 positions, respectively.
Outokumpu American Brass, Inc., Buffalo,
Erie County
Allocation: 8060 kW
of RP
Jobs Commitment: 505 jobs
Background: Outokumpu American Brass, Inc. (‘Outokumpu’),
in business since 1906, manufactures copper and brass sheets and rolls. The
allocation is a ‘vintage’ contract, meaning that
it has an 80% job ratio and two-year job average. The company
requested a productivity improvement reduction of its job commitment by four
jobs. Outokumpu’s reduction comes from rebalancing of job duties (two
positions), elimination of a process (one position) and new equipment (one
position). For the past two years, Outokumpu averaged 649.38 jobs, i.e.,
128.59% of its contractual commitment.
Recommendation: Staff recommends that the
Trustees reduce Outokumpu’s RP allocation employment commitment by 4 jobs to
a base of 501 positions.
RECOMMENDATION
“The Director – Business Power Allocations,
Regulation and Billing recommends
that the Trustees adjust the job commitments for seven customers with 17
contracts due to productivity improvements as described above and set forth
in Exhibit ‘7-A.’
“The Executive Vice President and General
Counsel, the Senior Vice President – Marketing, Economic Development and
Supply Planning, the Vice President – Major Account – Marketing and Economic
Development and I concur in the recommendation.”
Mr. Pasquale presented the highlights of staff’s
recommendations to the Trustees. In response to a question from Trustee
Cusack, Mr. Pasquale said that all of the companies requesting productivity
improvement reductions are located in Western New York because they are all
hydro power customers.
The following resolution, as submitted by
the President and Chief Executive Officer, was unanimously adopted.
RESOLVED, That the Authority hereby approves adjustment of the future job
commitment levels for seven customers with 17 contracts that made
productivity improvements as described in the foregoing report of the
President and Chief Executive Officer and as set forth in Exhibit “7-A”; and
be it further
RESOLVED, That the Director – Business Power Allocations, Regulation and
Billing is hereby authorized to provide written notice to these companies
whose allocations and job commitments are being reduced; and be it further
RESOLVED, That the Chairman, the President and Chief Executive Officer and
all other officers of the Authority are, and each of them hereby is,
authorized on behalf of the Authority to do any and all things and take any
and all actions and execute and deliver any and all agreements, certificates
and other documents to effectuate the foregoing resolutions, subject to the
approval of the form thereof by the Executive Vice President and General
Counsel.
