Minutes of the Annual Meeting of the Power Authority of the State of New
York held via video conference at the following participating locations at
11:04 a.m.:
1)
New York Power Authority, 123 Main Street, White Plains, NY
2)
New York Power Authority, Niagara Power Project, 5777 Lewiston Road,
Lewiston, NY
The
following Members of the Board were present at the following locations:
Frank S. McCullough, Jr., Chairman (White
Plains, NY)
Michael J. Townsend, Vice Chairman (White
Plains, NY
Elise M. Cusack, Trustee (Lewiston, NY)
Robert E. Moses, Trustee (White Plains, NY)
Thomas W. Scozzafava, Trustee (White Plains,
NY)
Joseph J. Seymour, Trustee (White Plains,
NY)
Leonard N. Spano, Trustee (White Plains, NY)
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Timothy S.
Carey President and Chief Executive Officer
Thomas J.
Kelly Executive Vice President and
General Counsel
Joseph Del
Sindaco Executive Vice President and Chief
Financial Officer
Vincent C. Vesce Executive Vice President –
Corporate Services and Administration
Angelo S. Esposito Senior Vice President –
Energy Services and Technology
Louise M. Morman Senior Vice President –
Marketing and Economic Development
William J. Nadeau Senior Vice President –
Energy Resource Management and Strategic Planning
Brian Vattimo Senior Vice President –
Public and Governmental Affairs
Edward A. Welz Senior Vice President and
Chief Engineer – Power Generation
Richard J. Ardolino Vice
President - Engineering
Arnold M. Bellis Vice President –
Controller
John M. Hoff Vice President –
Procurement and Real Estate
Donald A. Russak Vice President – Finance
Thomas H. Warmath Vice President and Chief Risk
Officer
Daniel
Wiese Vice President – Corporate Security and
Inspector General
Anne B. Cahill
Corporate Secretary
Angela D. Graves Deputy Corporate Secretary
Dennis T.
Eccleston Chief Information Officer
Brian C.
McElroy Treasurer
Lisa
Cole Deputy Treasurer
Joseph J.
Carline Assistant General Counsel – Power and
Transmission
Paul F.
Finnegan Executive Director – Public and
Governmental Affairs
Helen L. Eisenfeld
Director – Cost Control and Electric Transportation
James F. Pasquale
Director – Business Power Allocations, Compliance and Municipal and
Cooperative Marketing
Michael
A. Saltzman Director – Media Relations
Marilyn
J. Brown Manager – Market and Pricing
Analysis
John M.
Kahabka Manager – Environmental Operations
Arnold J. Schuff
Manager – Transmission Planning
Denise D’Ambrosio Principal
Attorney I
Gary D. Levenson Sr.
Attorney II
Jacquline E. Carmody Attorney
I
Kevin J. Falvey
Lead Financial Analyst – Corporate Finance
Diane
Gil Sr. Procurement
Specialist
Oksana Karaczewsky Sr.
Procurement Compliance Coordinator
Mary
Jean Frank Associate Corporate Secretary
Lorna
M. Johnson Assistant Corporate Secretary
Jack
Murphy Temporary PR Counsel
Randy Nelson
Auditor, Ernst & Young
Steve Wilson
Attorney, Read & Laniado
Chairman McCullough
presided over the meeting. Secretary Cahill kept the Minutes.
1.
Approval of the Minutes
The Minutes of the
Regular Meeting of March 27, 2007 were unanimously adopted.
2.
Financial Reports for the Three Months Ended March 31,
2007
Mr.
Bellis presented an overview of the financial reports.
3.
Report from the President and Chief Executive Officer
President Carey said that, along with Mr. Del Sindaco
and Mr. Bellis, he had just completed the first quarter budget reviews for
each business unit and department and that the Authority is operating within
its budget for the 2007 fiscal year.
President Carey then briefly outlined Governor Spitzer’s “15
by 15” energy plan, which calls for a decrease in energy use by 15% and an
increase in the use of renewable energy resources by 15% by the year 2015.
He said that staff is currently reviewing Mayor Bloomberg’s recently
released energy plan, especially since the City of New York and its Housing
Agency are among the Authority’s largest SENY customers.
According to President Carey, the Province of Ontario,
Canada, has banned the sale of incandescent light bulbs, as has Australia.
President Carey also mentioned that the Public Service
Commission is exploring the feasibility of “decoupling” for utilities as
California has done. Under decoupling, utilities’ revenues are not tied
completely to how much energy they sell, since they can make money by
lowering energy usage. Decoupling also has the potential to decrease the
need for new power plant construction and to shave peak load.
4.
Allocation of 550 kW of Hydro Power
The President and Chief
Executive Officer submitted the following report:
SUMMARY
“The Trustees are requested
to approve one allocation of available Expansion Power (‘EP’) totaling 300
kW to ISOCHEM, Inc. (‘ISOCHEM’) and one allocation of available EP totaling
250 kW to Moldtech, Inc. (‘Moldtech’). These two allocations total 550 kW.
BACKGROUND
“Under the Replacement Power
(‘RP’) Settlement Agreement, National Grid (‘Grid’) (formerly Niagara Mohawk
Power Corporation), with the approval of the Authority, identifies and
selects certain qualified industrial companies to receive delivery of RP.
Qualified companies are current or future industrial customers of Grid that
have or propose to have manufacturing facilities for the receipt of RP
within 30 miles of the Authority’s Niagara Switchyard. RP is up to 445,000
kW of firm hydro power generated by the Authority at its Niagara Power
Project that has been made available to Grid, pursuant to the Niagara
Redevelopment Act (through December 2005) and Chapter 313 of the 2005 Laws
of the State of New York.
“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 and up to 445 MW of RP to businesses in
the State located within 30 miles of the Niagara Power Project, provided
that the amount of power allocated to businesses in Chautauqua County on
January 1, 1987 shall continue to be allocated in such county.
DISCUSSION
“At their meeting of February
27, 2007 the Trustees approved a 400 kW RP allocation to Moldtech. This
allocation was to support Moldtech’s plan to move and expand from its
existing site in Lancaster to a new facility in Amherst. Since that time,
the owner of Moldtech informed the Authority that the move to Amherst is not
cost effective and has canceled the project. As a result, Moldtech is now
considering expanding its existing facility in Lancaster and has applied for
hydro power for this expansion.
“On October 22, 2003, the
Authority, Grid, 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 Advisory
Group’s discussions, staff recommends that the available power be allocated
to two companies as set forth in Exhibit ‘4-A.’ The Exhibit shows, among
other things, the amount of power requested, the recommended allocations and
additional employment and capital investment information. These projects
will help maintain and diversify the industrial base of Western New York and
provide new employment opportunities. They are projected to result in the
creation of 33 jobs.
RECOMMENDATION
“The Director – Business
Power Allocations, Compliance and Municipal and Cooperative Marketing
recommends that the Trustees approve the allocation of 550 kW of hydro power
to the companies listed in Exhibit ‘4-A.’
The Executive Vice President
and General Counsel, the Senior Vice President – Marketing and Economic
Development, the Vice President – Major Accounts Marketing and Economic
Development and I concur in the recommendation.”
The following resolution, as
submitted by the President and Chief Executive Officer, was unanimously
adopted.
RESOLVED, That the allocation of 550 kW of Expansion Power, as detailed
in Exhibit “4-A,” be, and hereby is, approved on the terms set forth in the
foregoing report of the President and Chief Executive Officer; and be it
further
RESOLVED, That the allocation of 400 kW of Replacement Power that the
Trustees approved for Moldtech, at their February 27, 2007 meeting be
withdrawn since the project that the allocation was approved for was
canceled; 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, 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.
Power for Jobs Program –
Extended Benefits
The President and Chief Executive Officer
submitted the following report:
SUMMARY
“The Trustees are requested
to approve extended benefits for 51 Power for Jobs (‘PFJ’) customers as
listed in Exhibit ‘5-A.’ These customers have been recommended to receive
such extended benefits by the Economic Development Power Allocation Board
(‘EDPAB’).
BACKGROUND
“In July 1997, the New York
State Legislature approved a program to provide low-cost power to businesses
and not-for-profit corporations that agree to retain or create jobs in New
York State. In return for commitments to create or retain jobs, successful
applicants receive three-year contracts for PFJ electricity.
“The PFJ program originally
made 400 megawatts (‘MW’) of power available. The program was to be phased
in over three years, with approximately 133 MW made available each year. In
July 1998, as a result of the initial success of the program, the
Legislature amended the PFJ statute to accelerate the distribution of the
power, making a total of 267 MW available in Year One. The 1998 amendments
also increased the size of the program to 450 MW, with 50 MW to become
available in Year Three.
“In May 2000, legislation was
enacted that authorized another 300 MW of power to be allocated under the
PFJ program. The additional MW were described in the statute as ‘phase
four’ of the program. Customers that received allocations in Year One were
authorized to apply for reallocations; more than 95% reapplied. The balance
of the power was awarded to new applicants.
“In July 2002, legislation
was signed into law that authorized another 183 MW of power to be allocated
under the program. The additional MW were described in the statute as
‘phase five’ of the program. Customers that received allocations in Year
Two or Year Three were given priority to reapply for the program. Any
remaining power was made available to new applicants.
“Chapter 59 of the Laws of
2004 extended the benefits for PFJ customers whose contracts expired before
the end of the program in 2005. Such customers had to choose to receive an
‘electricity savings reimbursement’ rebate and/or a power contract
extension. The Authority was also authorized to voluntarily fund the
rebates, if deemed feasible and advisable by the Trustees.
“PFJ customers whose
contracts expired on or prior to November 30, 2004 were eligible for a
rebate to the extent funded by the Authority from the date their contract
expired through December 31, 2005. As an alternative, such customers could
choose to receive a rebate to the extent funded by the Authority from the
date their contract expired as a bridge to a new contract extension, with
the contract extension commencing December 1, 2004. The new contract would
be in effect from a period no earlier than December 1, 2004 through the end
of the PFJ program on December 31, 2005.
“PFJ customers whose
contracts expired after November 30, 2004 were eligible for rebate or
contract extension, assuming funding by the Authority, from the date their
contracts expired through December 31, 2005.
“Approved contract extensions
entitled customers to receive the power from the Authority pursuant to a
sale-for-resale agreement with the customer’s local utility. Separate
allocation contracts between customers and the Authority contained job
commitments enforceable by the Authority.
“In 2005, provisions of the
approved State budget extended the period PFJ customers could receive
benefits until December 31, 2006. In 2006, a new law (Chapter 645 of the
Laws of 2006) included provisions extending program benefits until June 30,
2007.
“Section 189 of the New York
State Economic Development Law, which was amended by Chapter 59 of the Laws
of 2004, provided the statutory authorization for the extended benefits that
could be provided to PFJ customers. The statute stated that an applicant
could receive extended benefits ‘only if it is in compliance with and
agrees to continue to meet the job retention and creation commitments set
forth in its prior power for jobs contract.’
“Chapter 313 of the Laws of
2005 amended the above language to allow EDPAB to consider continuation of
benefits on such terms as it deems reasonable. The statutory language now
reads as follows:
An applicant shall be eligible for such reimbursements and/or extensions
only if it is in compliance with and agrees to continue to meet the
job retention and creation commitments set forth in its prior power for jobs
contract, or such other commitments as the board deems reasonable.
(emphasis supplied)
“At its meeting of October
18, 2005, EDPAB approved criteria under which applicants whose extended
benefits EDPAB had reduced for non-compliance with their job commitments
could apply to have their PFJ benefits reinstated in whole or in part.
EDPAB authorized staff to create a short-form application, notify customers
of the process, send customers the application and evaluate reconsideration
requests based on the approved criteria. To date, staff has mailed 200
applications, received 109 and completed review of 108.
DISCUSSION
“At its meeting on April 24,
2007, EDPAB recommended that the Authority’s Trustees approve electricity
savings reimbursement rebates to the 51 businesses listed in Exhibit ‘5-A.’
Collectively, these organizations have agreed to retain more than 26,000
jobs in New York State in exchange for rebates. The rebate program will be
in effect until June 30, 2007, the program’s sunset.
“The Trustees are requested
to approve the payment and funding of rebates for the companies listed in
Exhibit ‘5-A’ in a total amount currently not expected to exceed $3.4
million. Staff recommends that the Trustees authorize a withdrawal of
monies from the Operating Fund for the payment of such amount, provided that
such amount is not needed at the time of withdrawal for any of the purposes
specified in Section 503(1)(a)-(c) of the General Resolution Authorizing
Revenue Obligations, as amended and supplemented. Staff expects to present
the Trustees with requests for additional funding for rebates to the
companies listed in the Exhibit in the future.
FISCAL INFORMATION
“Funding of rebates for the
companies listed in Exhibit ‘5-A’ is not expected to exceed $3.4 million.
Payments will be made from the Operating Fund. To date, the Trustees have
approved $73.2 million in rebates.
RECOMMENDATION
“The Executive Vice President
and Chief Financial Officer and the Director – Business Power Allocations,
Compliance and Municipal and Cooperative Marketing recommend that the
Trustees approve the payment of electricity savings reimbursements to the
Power for Jobs customers listed in Exhibits ‘5-A.’
“The Executive Vice President
and General Counsel, the Senior Vice President – Marketing and Economic
Development, the Senior Vice President – Public and Governmental Affairs,
the Vice President – Major Account Marketing and Economic Development and I
concur in the recommendation.”
The following resolution, as
submitted by the President and Chief Executive Officer, was unanimously
adopted.
WHEREAS, the Economic Development Power Allocation Board has recommended
that the Authority approve electricity savings reimbursements to the Power
for Jobs customers listed in Exhibit “5-A”;
NOW THEREFORE BE IT RESOLVED, That to implement such Economic Development
Power Allocation Board recommendations, the Authority hereby approves the
payment of electricity savings reimbursements to the companies listed in
Exhibit “5-A,” and that the Authority finds that such payments for
electricity savings reimbursements are in all respects reasonable,
consistent with the requirements of the Power for Jobs program and in the
public interest; and be it further
RESOLVED, That based on staff’s recommendation, it is hereby authorized
that payments be made for electricity savings reimbursements as described in
the foregoing report of the President and Chief Executive Officer in the
aggregate amount of up to $3.4 million, and it is hereby found that amounts
may properly be withdrawn from the Operating Fund to fund such payments; and
be it further
RESOLVED, That such monies may be withdrawn pursuant to the foregoing
resolution upon the certification on the date of such withdrawal by the Vice
President – Finance or the Treasurer that the amount to be withdrawn is not
then needed for any of the purposes specified in Section 503 (1)(a)-(c) of
the General Resolution Authorizing Revenue Obligations, as amended and
supplemented; and be it further
RESOLVED, That the Senior Vice President – Marketing and Economic
Development or her designee be, and hereby is, authorized to negotiate and
execute any and all documents necessary or desirable to effectuate the
foregoing, subject to the approval of the form thereof by the 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, take any and
all actions and execute and deliver any and all certificates, agreements and
other documents to effectuate the foregoing resolutions, subject to the
approval of the form thereof by the Executive Vice President and General
Counsel.
6.
Municipal and Rural Cooperative Economic Development Program –
Allocation to the Town of Massena
The President and Chief
Executive Officer submitted the following report:
SUMMARY
“The Trustees are requested
to approve an allocation of power under the Municipal and Rural Cooperative
Economic Development Program (‘Program’) to the Town of Massena (‘Town).’
BACKGROUND
“The 1991 amendment to the
power sales agreement between the Authority and the Municipal and Rural
Cooperative Systems reserved 108,000 kW of power for economic development in
the systems’ service territories. As of January 30, 2007, 38,640 kW have
been allocated.
“Power from this block can be
allocated to individual systems to meet the increased electric load
resulting from eligible new or expanding businesses in their service area.
The recommended allocations under the Program comprise half hydropower and
half incremental power. Under the guidelines established for the Program,
an allocation to a system should meet a target number of new jobs per MW.
The guidelines provide that for businesses new to a system, the jobs-per-MW
ratios are considered on a case-by-case basis. For projects involving
existing businesses, the number of jobs per MW is the number of new jobs as
compared to the level of employment prior to the expansion. Specifically,
for companies employing 100 or less, the target ratio is 25 jobs per MW; for
companies employing between 101 and 250, the ratio is 50; for companies
employing between 251 and 500, the ratio is 75 and for companies employing
more than 500, the ratio is 100 jobs per MW.
“The Town has submitted an
application for power under the Program for consideration by the Trustees.
DISCUSSION
“An application has been
submitted by the Town on behalf of Curran Renewable Energy, LLC (‘Curran
Renewable’). Curran Renewable is a privately held company incorporated in
the State of New York. The company will be in the business of manufacturing
wood pellets for wood stoves and other heating sources. The company will be
the principal supplier of this new and growing market in the North Country.
“Curran Renewable considered
opening this new manufacturing facility in Canada, but the potential
advantages of reduced power cost and the strategic location of two buildings
in Massena will allow the company to compete more efficiently and at the
same time bring much-needed additional jobs to the community.
“Curran Renewable is planning
to purchase two buildings from the St. Lawrence County IDA currently vacant
and suitable for their needs without alterations, for approximately $1.7
million, invest $5.4 million on machinery and equipment and $2.9 on site
work, start up-cost and fees. The estimated cost of the project is expected
to total $10.0 million. The new facility is expected to produce 100,000
tons of wood pellets annually and provide for approximately 23 full-time
jobs over the next three years, adding revenue to the local economy and
resulting in 25 jobs per MW of hydropower. The estimated electrical monthly
peak load for the facility is 1,840 kW. It is recommended that the Trustees
approve an allocation of 1,840 kW, of which half is hydropower, for the Town
on behalf of Curran Renewable Energy, LLC.
“The Municipal Electric
Utilities Association Executive Committee supports the recommended
allocations to the Town.
“The recommended allocations
under the Program comprise half hydropower and half incremental power. In
accordance with the Authority’s marketing arrangement with the municipal and
cooperative customers, the hydropower will be added to the recipient
system’s contract demand at the time a project becomes operational. The
hydropower earmarked for this Program is presently sold to the municipal and
cooperative customers on a withdrawable basis. As partial-requirement
customer, the Town of Massena may purchase the incremental power from the
Power Authority or an alternate supplier.
RECOMMENDATION
“The Director – Business
Power Allocations, Compliance and Municipal and Cooperative Marketing
recommends that the Trustees approve the allocation of power under the
Municipal and Rural Cooperative Economic Development Program to the Town of
Massena in accordance with the above.
“The Executive Vice President
and General Counsel, the Senior Vice President – Marketing and Economic
Development and I concur in the recommendation.”
The following resolution, as
submitted by the President and Chief Executive Officer, was unanimously
adopted.
RESOLVED, That the allocation of power to the Town of
Massena under the Municipal and Rural Cooperative Economic Development
Program is hereby approved as set forth in the attached memorandum of the
President and Chief Executive Officer; and be it further
RESOLVED, That the Senior Vice President – Marketing and
Economic Development or her designee be, and hereby is, authorized to
execute any and all documents necessary or desirable to effectuate these
allocation; 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, 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.
7.
Annual Review of Job
Commitments
The President and Chief
Executive Officer submitted the following report:
SUMMARY
“It is recommended that the
Trustees grant termination authority for two customers with two contracts;
reduce the power allocations and/or job commitments for four customers with
six contracts; take no action on 32 customers with 35 contracts and defer
action with respect to six customers in the automotive industry with 15
contracts, as set forth in Exhibit ‘7-A’ attached hereto.
BACKGROUND
“Each year, Authority staff initiates a
review of all business power allocations and the customers’ performance
against agreed-upon job commitments. In 2006, the Authority had 290
contracts with 185 business customers, excluding Power for Jobs (‘PFJ’)
agreements. This year’s review covers a total of 174 customers with 269
contracts that required the customers to report job levels for 2006. The
contracts reviewed by staff represent overall power allocations of 1,435.068
MW and total employment commitments of 120,502 jobs. In the aggregate,
these customers reported actual employment of 138,868.18 jobs. This
represents 115.24% of the total job commitment for business customers
reporting in 2006. Nevertheless, 43 customers with 58 contracts have actual
job levels below the minimum threshold.
“The contracts contain a
customer commitment to retain or add a specific number of jobs. If the
customer’s actual job level falls below 90% of that commitment (80% for
‘vintage’ customers, i.e., those having contract allocations prior to 1988),
the Authority may reduce that customer’s power allocation proportionately.
Provided contract language allows for it, 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.
DISCUSSION
“This annual review of business power allocation job commitments covers the
period from January through December 2006. Of the companies reviewed
in this item, staff recommends that the Trustees grant termination authority
for two customers with two contracts, as discussed in Section I of Exhibit
‘7-A;’ reduce the allocations and/or jobs commitments for four customers
with six contracts, as discussed in Section II of Exhibit ‘7-A’ and take no
action on 32 companies with 35 contracts that are not meeting their
commitments, as discussed in Section III of Exhibit ‘7-A.’
“In addition, in Section IV
of Exhibit ‘7-A,’ staff recommends that the Trustees defer action for six
customers in the automotive industry with 15 contracts. The Authority has
had a long history of supporting the automotive industry with allocations of
nearly 60 MW of hydro power and 8 MW of Economic Development Power.
Customers include General Motors, Ford, American Axle, Delphi and North
American Höganäs. Each of these customers
have facilities facing a daily struggle to survive as their corporations
decide which plants to close and which to keep open. Hydro power has been a
key factor in the survival of the Authority’s automotive customers,
especially for the last five years. The U. S. auto industry is dramatically
restructuring in response to global pressures. Staff is asking the Trustees
to defer action regarding the Authority’s automotive customers for one
year. During this time, staff will revisit these customers’ original
contractual job commitments and assist the customers in documenting
traditional productivity improvements, as well as productivity improvements
related to changes in human resources practices, new work rules,
redefinition of job descriptions, etc. The 2007 annual review of jobs
Trustee item will include a recommendation and justification for refreshing
the job commitments of the Authority’s automotive customers while allowing
their allocations to remain intact, provided that each individual business
case warrants such action, with the result that the companies can recover
and remain open and competitive.
Section I
Allocations Requesting Special Trustee
Authorization
Saint-Gobain
Corporation – Microelectronics,
Sanborn, Niagara County
Allocation:
900 kW of Replacement Power (“RP”)
Jobs Commitment:
35 jobs
Background:
Saint-Gobain Corporation – Microelectronics (“SGC”) develops ceramics to
dissipate the heat generated by electrical circuits in order to make
smaller, faster and more powerful computer chips and other heat-sensitive
devices. The bottom has fallen out of the market for the computer chip
industry and the company has not been able to recover this business. The
plant closed this past year.
Recommendation:
Staff recommends that the Trustees terminate
SGC’s 900 kW RP allocation, as the facility has ceased operation.
Sherwood, A Division
of Harsco Corp.,
Lockport, Niagara County
Allocation:
240 kW of Expansion Power (“EP”)
Jobs Commitment:
361 jobs
Background:
Sherwood, A Division of Harsco Corp. (“Sherwood”), founded in 1923,
manufactures gas-control valves and regulators for compressed gas,
refrigerants and scuba diving gear. For the past year, Sherwood – Lockport
averaged 86.25 jobs, i.e., 23.89% of its employment commitment. Employees
from Lockport have been moved to the more modern Wheatfield plant, since the
Lockport facility, which was old and no longer capable of accommodating the
changes required for the business, closed in 2006.
Recommendation:
Staff recommends that the Trustees terminate
Sherwood’s 240 kW EP allocation, as the company has closed the facility.
Section II
Allocations and Job Commitments To Be Reduced
Brenner Paper Products
Company, Inc.,
Glendale, Queens County
Allocation:
600 kW of Municipal Distribution Agency (“MDA”) Power
Jobs Commitment:
140 jobs
Background:
Brenner Paper Products Company, Inc. (“Brenner”) manufactures dry office
supply paper products. For the past year, Brenner averaged 99.17 jobs,
i.e., 70.83% of its contractual commitment. Brenner’s business and
employment were down last year as there has been a slowdown in the envelope
industry. The company had to switch from three shifts to two shifts. This
year, employment is down even further, but Brenner is doing all it can to
stem the loss and grow back to at least its 2005 level and, hopefully, more.
Recommendation:
Staff recommends that the Trustees reduce
Brenner’s 600 kW MDA Power allocation by 175 kW to 425 kW and reduce its
employment commitment by 41 jobs to 99 jobs.
Buffalo Newspress Inc.,
Buffalo, Erie County
Allocation:
250 kW of EP
Jobs Commitment:
200 jobs
Background:
Buffalo Newspress Inc. (“Buffalo Newspress”), founded in 1979, prints
advertising inserts, brochures and weekly newspapers. For the past year,
Buffalo Newspress averaged 149.17 jobs, i.e., 74.58% of its contractual
commitment. Buffalo Newspress lost its biggest account in 2005,
representing 35% of its business. The company has been trying hard to
replace the lost business but it has been difficult to do. Buffalo
Newspress has maintained its workforce throughout this challenging period.
Recommendation:
Staff recommends that the Trustees reduce
Buffalo Newspress’ 250 kW EP allocation by 50 kW to 200 kW and reduce its
employment commitment by 51 jobs to 149 jobs.
Ferro Electronic
Materials,
Niagara Falls, Niagara County
Allocation:
3,115 kW and 1,000 kW of RP and 3,000 kW of EP
Jobs Commitment:
276 jobs, 257 jobs and 220 jobs, respectively
Background:
Ferro Electronic Materials (“Ferro”) is a supplier of dielectric powder to
the passive electronic component industry and zirconia-based ceramic powders
to industry. For the past year, Ferro averaged 152.25 jobs, i.e., 55.16%
and 59.24% of its RP allocations’ commitments. The EP allocation is a
“vintage” contract, meaning that it has an 80% job ratio and two-year job
average. The two-year average is 159.50 jobs, i.e., 72.50% of the company’s
commitment. Ferro’s employment level will remain stable for the foreseeable
future, as no new production is scheduled. The company is currently in the
process of looking for a purchaser of the site.
Recommendation:
Staff recommends that the Trustees: (1)
reduce Ferro’s 3,115 kW RP allocation by 1,415 kW to 1,700 kW and the
related employment commitment by 124 jobs to 152 jobs, (2) reduce the
company’s 1,000 kW RP allocation by 400 kW to 600 kW and the related
employment commitment by 105 jobs to 152 jobs and (3) reduce its 3,000 kW EP
allocation by 900 kW to 2,100 kW and the related employment commitment by 68
jobs to 152 jobs.
Habasit Globe, Inc.,
Buffalo, Erie County
Allocation:
250 kW of RP
Jobs Commitment:
123 jobs
Background:
Habasit Globe, Inc. (“Habasit”), in business since 1916, manufactures
conveyor belts primarily for the food industry. The company uses a
non-rubber, non-woven specially treated fabric that is lighter, stronger and
easier to clean than rubber. For the past year,
Habasit averaged 80.17 jobs, i.e., 65.18% of its contractual commitment.
The company has had a very steady employment level for the past several
years but is growing slightly in 2007, with four new hires. The company
remains committed to being a steady employer in Buffalo.
Recommendation:
Staff recommends that the Trustees reduce
Habasit’s 250 kW RP allocation by 50 kW to 200 kW and reduce its employment
commitment by 43 jobs to 80 jobs.
Section III
Allocations to Continue with No Change
Buffalo Tungsten
Incorporated,
Depew, Erie County
Allocation:
800 kW of RP
Jobs Commitment:
62 jobs
Background:
Buffalo Tungsten Incorporated (“Buffalo Tungsten”), founded in 1987,
produces tungsten powder that is primarily used by the electronics and
sporting goods industries and the military. For the past year, Buffalo
Tungsten averaged 54.83 jobs, i.e., 88.44% of its contractual commitment.
Buffalo Tungsten grew this year, meeting its commitment over the last six
months with more than 57 employees.
Ceres Corporation,
Niagara Falls, Niagara County
Allocation:
1,700 kW, 1,600 kW and 1,300 kW of RP
Jobs Commitment:
60 jobs for all allocations
Background:
Ceres Corporation (“Ceres”), founded in 1976, was the first U. S. producer
of cubic zirconia, as well as the first cubic zirconia manufacturer to
develop and sell colored cubic zirconia. The product is used in the
gem-cutting industry and is also used in jewelry. Ceres developed and sells
the industry’s leading diamond-testing instruments. For the past year,
Ceres averaged 46.42 jobs, i.e., 77.36% of its contractual commitments.
While the company is in the midst of developing a new product line and is
growing, it implemented productivity improvement measures this past year,
resulting in a reduced employment level of 47 jobs. Though the productivity
improvement reduction request has not been verified by an on-site visit, if
approved, it would allow Ceres to meet its commitment.
Columbia University
Audubon Business & Technology Center,
New York, New York Co.
Allocation:
1,000 kW of MDA Power
Jobs Commitment:
166 jobs
Background:
Columbia University Audubon Business & Technology Center (“Columbia
Audubon”), operating since 1995, houses biotechnology research and
development companies. The center was developed by Columbia University in
conjunction with New York City and New York State in order to expand the
biotechnology sector of the local and regional economies. The job ratio for
this allocation is 75% of its commitment. For the past year, Columbia
Audubon averaged 104.25 jobs, i.e., 62.80% of its employment commitment.
Columbia Audubon has not reported the jobs for all of the biotechnology
companies that exist in the center, which resulted in underreporting its
actual employment level. Obtaining the updated information is not feasible
due to the nature of the business center. In 2007, Columbia Audubon is
meeting its employment commitment.
Contract Pharmaceuticals Limited Niagara,
Buffalo, Erie County
Allocation:
250 kW of RP
Jobs Commitment:
329 jobs
Background:
Contract Pharmaceuticals Limited Niagara (“CPL”), a Canadian company,
purchased Bristol-Myers Squibb’s facility in 2005. The company
manufactures dry skin, anti-inflammatory and
antifungal dermatological products, in addition to various cold medicines
under contract for other companies. For
the past year, CPL averaged 242.38 jobs, i.e., 73.67% of its contractual
commitment. While CPL claims it is in the process of ramping up its
business and expects to grow, the company has not grown in several years.
Recommendation:
Staff recommends that the Trustees reduce
CPL’s 250 kW RP allocation by 50 kW to 200 kW and reduce its employment
commitment by 87 jobs to 242 jobs.
Dunkirk Specialty
Steel, LLC,
Dunkirk, Chautauqua County
Allocation:
6,800 kW of EP
Jobs Commitment:
250 jobs
Background:
Dunkirk Specialty Steel, LLC (“Dunkirk”), initially Dunkirk Acquisitions,
purchased the assets of Empire Steel in 2002 and manufactures stainless
steel and alloys, primarily for the tool industry. For the past year,
Dunkirk averaged 157.33 jobs, i.e., 62.93% of its contractual commitment.
The company is growing and foresees continued growth in the future. Not
only has the company been getting customers back, but it is adding new ones
as well. Currently, Dunkirk is at 180 jobs, with more expected this year.
Focused on making a profit, the company has made careful investments to
continue growth in a sustainable way but does not foresee meeting its
commitment this year. Staff will follow up with Dunkirk’s employment level
in the second half of the year.
Ellanef Manufacturing
Corp.,
Corona, Queens County
Allocation:
1,100 kW of Economic Development Power (“EDP”)
Jobs Commitment:
251 jobs
Background:
Ellanef Manufacturing Corp. (“Ellanef”), founded in 1940, is the largest
privately held manufacturer of aerospace machined parts and assemblies in
the nation. Ellanef manufactures parts for both the commercial and the
defense industries, with Boeing, NASA and Space Administration and IBM as
major customers. For the past year, Ellanef averaged 221.08 jobs, i.e.,
88.08% of its contractual commitment. The company made it through many
tough years and is now growing again with a resurgence in business. Ellanef
has spent a significant amount of money trying to fill job vacancies. The
company is just a few jobs short of its commitment and would be above its
commitment if the vacancies are filled.
Endicott Interconnect
Technologies, Inc.,
Endicott, Broome County
Allocation:
20,000 kW of EDP
Jobs Commitment:
5,500 jobs
Background:
In 2002, Endicott Interconnect Technologies, Inc. (“Endicott”) purchased
this microelectronics manufacturing facility, which had been in operation
since 1906, from IBM. Endicott manufactures electronics panels and boards
and develops data-processing equipment such as PC panels and banking
systems. For the past year, Endicott averaged 4,117.17 jobs, i.e., 74.86%
of its contractual commitment. Last year was a growth year for Endicott, as
more than 300 new jobs were added and more are being added in 2007. Just
recently, Endicott received a $160 million defense contract. The company’s
EDP allocation expires in 2007, however, staff will follow up with
Endicott’s employment level in the second half of the year.
Excelsior Transparent
Bag Manufacturing, Inc.,
Yonkers, Westchester County
Allocation:
700 kW of MDA Power
Jobs Commitment:
180 jobs
Background:
Excelsior Transparent Bag Manufacturing, Inc. (“Excelsior”), a privately
held company founded in 1946, prints and converts plastic film mainly for
the food industry. For the past year, Excelsior averaged 135.00 jobs, i.e.,
75.00% of its contractual commitment. Excelsior suffered in 2006 due to
Hurricane Katrina, which damaged or destroyed so many petrochemical plants
that there was a shortage in polymer resins, the main component of the film
the company produces. Though the company lost substantial business, it is
very optimistic that the volume of sales and employment will return in 2007.
Granny’s Kitchens, Ltd.,
Frankfort, Herkimer County
Allocation:
750 kW of EDP
Jobs Commitment:
315 jobs
Background:
Granny’s Kitchens, Ltd. (“Granny’s”), in business since 1981, is a
wholesale bakery manufacturer specializing in cakes and donuts.
For the past year, Granny’s averaged 275.50 jobs, i.e., 87.46% of its
contractual commitment. While 2006 was not a good year for Granny’s, 2007
is shaping up to be one of growth, and hopefully the company will meet its
commitment.
Honeywell
International,
Buffalo, Erie County
Allocation:
300 kW of RP
Jobs Commitment:
168 jobs
Background:
Honeywell International (“Honeywell”), formerly Allied-Signal Inc., has been
a research and development lab since the early 1900s. Honeywell develops
and produces atmospherically safe fluorocarbons. For the past year,
Honeywell averaged 136.77 jobs, i.e., 81.41% of its contractual commitment.
Since the site is a research facility, it depends on continued funding from
Honeywell businesses. The facility is at its highest employment level in
five years and is growing; it expects to either come close to or meet its
employment commitment in 2007.
ICM Controls
Corporation, Cicero, Onondaga
County
Allocation:
500 kW of EDP
Jobs Commitment:
300 jobs
Background:
ICM Controls Corporation (“ICM”), established in 1984, designs and
manufactures electronic controls for the HVAC market worldwide. For the
past year, ICM averaged 232.92 jobs, i.e., 77.64% of its commitment. Though
the company grew in 2006, it was still below its commitment. However, ICM’s
employment level meets its 2007 jobs commitment of 225 jobs.
Ingram Micro
Corporation, Williamsville, Erie
Co
