MINUTES OF THE REGULAR MEETING OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

February 27, 2007

 

Table of Contents

 

 

            Subject

 

1.              Opening Remarks

2.              Minutes of the Regular Meeting held on January 30, 2007

3.              Financial Reports for the Year Ended December 31, 2006 and the Month of January 2007, Exhibit “3-A”

4.              Report from the President and Chief Executive Officer

5.              Allocation of 400 kW of Hydro Power - Resolution Exhibits “5-A” & “5-A1”

6.              Power for Jobs Program – Extended Benefits - Resolution Exhibit “6-A”

7.              Transfers of Industrial Power - Resolution

8.              Energy Efficiency Improvements – NYPA Facilities Program - Resolution

9.              Proposed Host Communities Hydropower Contracts – Notice of Public Hearing - Resolution Exhibit “9-A”

10.           INFORMATIONAL ITEM – Permits for Temporary use of Office Space in the Clarence D. Rappleyea Building to New York State Retirement Systems and New York State Police

11.           Motion to Conduct an Executive Session

12.           Motion to Resume Meeting in Open Session

13.           Next Meeting

            Closing                                                                                                                             

 


 

Minutes of the Regular Meeting of the Power Authority of the State of New York held via video conference at the following participating locations at 11:30 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, NYPA

Thomas J. Kelly                                    Executive Vice President and General Counsel, NYPA

Joseph Del Sindaco                             Executive Vice President and Chief Financial Officer, NYPA

Vincent C. Vesce                                  Executive Vice President – Corporate Services and Administration, NYPA

Steven J. DeCarlo                                 Senior Vice President – Transmission, NYPA

Angelo S. Esposito                              Senior Vice President – Energy Services and Technology, NYPA

Louise M. Morman                              Senior Vice President – Marketing and Economic Development, NYPA

William J. Nadeau                                Senior Vice President – Energy Resource Management and Strategic Planning, NYPA

Brian Vattimo                                        Senior Vice President – Public and Governmental Affairs, NYPA

Edward A. Welz                                   Senior Vice President and Chief Engineer – Power Generation, NYPA

Thomas P. Antenucci                          Vice President – Project Management, NYPA

Arnold M. Bellis                                   Vice President – Controller, NYPA

Arthur M. Brennan                              Vice President – Internal Audit and Compliance, NYPA

John M. Hoff                                        Vice President – Procurement and Real Estate, NYPA

Donald A. Russak                                Vice President – Finance, NYPA

Thomas H. Warmath                           Vice President and Chief Risk Officer, NYPA

Daniel Wiese                                        Vice President and Inspector General – Corporate Security, NYPA

James H. Yates                                     Vice President – Major Accounts Marketing and Economic Development, NYPA

Anne B. Cahill                                      Corporate Secretary, NYPA

Angela D. Graves                                 Deputy Corporate Secretary, NYPA

Dennis T. Eccleston                            Chief Information Officer, NYPA

Brian C. McElroy                                  Treasurer, NYPA

Lisa Cole                                                Deputy Treasurer, NYPA

Joseph J. Carline                                  Assistant General Counsel – Power and Transmission, NYPA

Paul F. Finnegan                                  Executive Director – Public and Governmental Affairs, NYPA

James F. Pasquale                                Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing, NYPA

Michael A. Saltzman                            Director – Medial Relations, NYPA

Marilyn J. Brown                                  Manager – Market and Pricing Analysis, NYPA

John M. Kahabka                                 Manager – Environmental Operations, NYPA

Joanne Wilmott                                    Manager – Community Relations, Niagara, NYPA

Mary Jean Frank                                  Associate Secretary, NYPA

Jack Murphy                                         Temporary PR Counsel, NYPA

Thomas Congdon                                Special Assistant for Energy and Telecommunications, Governor Eliot Spitzer’s Office

 


 

Chairman McCullough presided over the meeting.  Secretary Cahill kept the Minutes.

 


 

1.             Opening Remarks

 

Chairman McCullough welcomed Thomas Congdon, who serves as a Special Assistant for Energy in Governor Spitzer’s Office, to the meeting. 


 

2.             Approval of the Minutes

 

The Minutes of the Regular Meeting of January 30, 2007 were unanimously adopted.


 

3.             Financial Reports for the Year Ended December 31, 2006 and the Month of January 2007 

 

Mr. Bellis presented an overview of the financial reports.  He said that the Authority’s independent auditor, Ernst & Young, had signed off on the Authority’s financial statements for 2006 with an unqualified opinion.  In response to a question from Trustee Seymour, Mr. Bellis said that Power for Jobs was one of several components of the Market Supply Power figured on page 3 of the financial reports.  He said that, as a rule of thumb, the bottom-line loss shown in the financial reports can usually be attributed to the Power for Jobs reimbursements. 


 

4.             Report from the President and Chief Executive Officer

               

President Carey said that 2006 had been a good year for the Authority and thanked all of the members of the Executive Management Committee and their staff for the good work they had done to accomplish this.  He said that 2006 had also been a year of change in the Authority’s senior management staff.  

               

 

5.            Allocation of 400 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 Replacement Power (‘RP’) totaling 400 kW to Moldtech, Inc.

 

BACKGROUND

 

“Under the 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

 

“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 Moldtech, Inc. as set forth in Exhibit ‘5-A.’  The Exhibit show, among other things, the amount of power requested by the company, the recommended allocation and additional employment and capital investment information.  This project will help maintain and diversify the industrial base of Western New York and provide new employment opportunities.  It is projected to result in the creation of 25 jobs.

 

RECOMMENDATION

 

“The Director – Business Power Allocations, Compliance & Municipal & Cooperative Marketing recommends that the Trustees approve the allocation of 400 kW of hydro power to Moldtech, Inc.

 

“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 400 kW of Replacement Power, as detailed in Exhibit “5-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 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.

 

 

 

  

APPLICATION SUMMARY

Replacement Power

 

Company: Moldtech, Inc.

 

Location:                                               Amherst

 

County:                                                  Erie County

 

IOU:                                                       National Grid

 

Business Activity:                               Injection-molded rubber products

 

Project Description:                           The project includes purchasing a facility in Amherst to increase production capacity and meet growing sales demand.  Moldtech will move all existing equipment, including 15 presses, to the Amherst facility.  In addition, the company will install 7 new injection presses.

 

Prior Application:                               None

 

Existing Allocation:                            None

 

Power Request:                                    500 kW

                                               

Power Recommended:                        400 kW  

 

Job Commitment:

                   Existing:                            48 jobs

                   New                                     25 jobs

                                                                  

New Jobs/Power Ratio:                      63 jobs/MW

 

New Jobs -

Avg. Wage and Benefits:                   $38,000

 

Capital Investment:                             $3.6 million 

Capital Investment                              $9.0 million/MW

Per MW

 

Summary:                                             Moldtech has seen large growth over the last two years and expects 30-50% growth for 2007, requiring additional manufacturing space and equipment, since the company will have outgrown its current space in Lancaster, NY.  The company is considering relocating to Indiana, including scoping an existing facility and negotiating electricity costs.  A hydro allocation will help the company stay in Western New York by greatly enhancing the option to purchase a larger facility in Amherst and relocate manufacturing operations there.  Moldtech is actively pursuing other economic development opportunities, including a capital grant from Empire State Development Corporation, as well as other incentives from local agencies.

 


 

6.             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 31 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘6-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 February 26, 2007, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 31 businesses listed in Exhibit ‘6-A.’ Collectively, these organizations have agreed to retain more than 32,000 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 ‘6-A’ in a total amount currently not expected to exceed $2.9 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 Exhibits in the future.

 

FISCAL INFORMATION

 

“Funding of rebates for the companies listed on Exhibit ‘6-A’ is not expected to exceed $2.9 million.  Payments will be made from the Operating Fund.  To date, the Trustees have approved $66.8 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 Exhibit ‘6-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.”

 

                Mr. Pasquale presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Chairman McCullough, Mr. Pasquale said that the eight companies that had received a reduction in their Power for Jobs (“PFJ”) allocation due to non-compliance with their agreed-to job levels had also received notification of the Authority’s process for reconsidering such PFJ reductions.

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 “6-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 “6-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 $2.9 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.

 

7.             Transfers of Industrial Power

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve the transfer of power allocations for six existing customers that have either changed their names for various business reasons and/or moved the location of their business.

 

BACKGROUND

 

                “Four companies have requested that the Authority grant approval of their requests for the continued delivery of Authority power allocations to facilities that have all gained prior approval for an allocation with pre-existing company names and/or ownership.  The present owners of these same facilities are now requesting that the Authority authorize the continuation of the power allocations granted to the previous company names and ownership associated with these facilities.

 

                “Two companies have requested that the Authority grant approval of their requests to transfer their allocation to another facility for the reasons indicated below.

 

“The Trustees have approved transfers of this nature at past meetings.

DISCUSSION

 

                “The proposed transferees are as follows:

 

“Caplugs, LLC (‘Caplugs’), located in Buffalo and in business since 1948, manufactures caps, plugs and temperature-control equipment through plastic injection molding, vinyl dip molding and extrusion.  The company has a 250 kW Expansion Power (‘EP’) allocation for 310 jobs awarded by the Trustees at their meeting on March 31, 1998, originally to Protective Closures Co., Inc. and transferred by the Trustees to Caplugs, LLC at their March 30, 2004 meeting.  In September 2005, Protective Industries, Inc. purchased all the assets of Caplugs, kept the Caplugs name and agreed to honor all terms and commitments with the Authority.

 

“CoolBrands Dairy, Inc., (‘CoolBrands’), located in North Lawrence and in business since the early 1900s under various owners, produces cultured dairy products, cottage cheese and flavored yogurts.  The Trustees approved a 1,000 kW Power for Jobs (‘PFJ’) allocation to Kraft Foods for 140 jobs at their meeting of September 28, 1998.  At their meeting of June 28, 2005, the Trustees approved a transfer of the allocation to CoolBrands based on the purchase of assets and liabilities associated with the North Lawrence site in March 2005 and an agreement to honor all contract terms and conditions of the allocation agreement and continue manufacturing similar products.  Recently, CoolBrands completed the sale of its assets and liabilities to North Lawrence Dairy, Inc., a subsidiary of Breyers Yogurt Company.  The company will remain named North Lawrence Dairy, Inc.  The company agrees to comply with all obligations associated with its allocation and will continue to manufacture the same or similar products in the same facility.

 

“Hydro-Air Components, Inc. (‘Hydro-Air’), located in Hamburg and in business since 1982, manufactures hydronic heating and cooling components and systems for the industrial and commercial construction industry.  The Trustees approved a 250 kW EP allocation for 55 jobs at their meeting on June 25, 1996.  Zehnder Group AG purchased all of Hydro-Air’s stock on July 1, 2006 and is keeping the Hydro-Air name.  The company agrees to comply with all obligations to the Authority associated with its allocations.  At their meeting of June 27, 2006, the Trustees approved a 250 kW Replacement Power (‘RP’) allocation for 55 base jobs and 150 new jobs; this allocation has not started yet.  The company also wishes to transfer both allocations to its new manufacturing facility at a former brown-field site in Buffalo.

 

“International Business Machines Corporation (‘IBM’), located in White Plains, which provides advanced information services, products and technologies, uses the 1133 Westchester Avenue location as a sales and distribution support center for North America.  IBM was awarded a 4.4 MW PFJ allocation for 1,884 jobs by the Trustees at their meeting on January 27, 1998.  The company applied for an electricity savings reimbursement for this allocation, which the Trustees approved at their July 26, 2005 meeting and have continued to approve since then.  IBM wishes to reallocate the 4.4 MW, as it has transferred almost all of the jobs from the current location to three other locations:  North Castle (2.4 MW), Corporate Headquarters (1.9 MW) and the IBM Learning Facility (100 kW).  IBM agrees to comply with its obligations to the Authority associated with this electricity savings reimbursement.

 

“Photocircuits Corp. (‘Photocircuits’), located in Glen Cove and in business since 1986, is the largest manufacturer on Long Island and one of the largest independent printed circuit board manufacturers with primary production still in the U. S.  The Trustees approved a 4,000 kW PFJ allocation in return for 2,028 jobs at their March 31, 1998 meeting and further extended the contract in 2001.  Photocircuits had all of its assets acquired through bankruptcy by the American Pacific Financial Corporation (‘AMPAC’) on March 28, 2006.  The new company will continue to use the Photocircuits name and remain at the same location.  The company chose the electricity savings reimbursement option for receiving PFJ extended benefits.   Photocircuits was below its job commitment in the application for PFJ extended benefits and had its allocation eligible for rebate reduced, as per the 2005 PFJ legislation, to 2,800 kW, but the company petitioned for full reinstatement to 4,000 kW with 983 jobs, which was approved by the Trustees at their meeting on March 28, 2006.  The company will honor all commitments to the Authority associated with its PFJ allocation.

               

“Universal Linen Service Co., Inc. (‘Universal’), located in Rome and in business since 1972, provides commercial laundry services to the healthcare, hotel and restaurant industries.  The Trustees approved a 175 kW PFJ allocation for 71 jobs at their meeting on March 30, 1999.  Universal was ineligible for an extension or reimbursement after its contract expired in March 2004 due to it being more than 10% below its employment commitment, as provided for in the 2005 legislation.  However, Universal became eligible for a reduced allocation for 2006 and was approved for 150 kW for 63 jobs by the Trustees at their September 20, 2005 meeting.  Universal was approved for 2007 extended benefits by the Trustees at their meeting on November 28, 2006, for 150 kW for 30 jobs.  R & S Textile Services, Inc. purchased all of Universal’s land, buildings and equipment on July 1, 2006.  The company agrees to honor all terms of the agreement with the Authority and will be named R & S Textile Services, Inc.

 

RECOMMENDATION

 

                “The Director – Business Power Allocations Compliance and Municipal and Cooperative Marketing recommends that the Trustees approve the transfer of power allocations for four existing customers that have changed their names or transferred their allocations for various business reasons and approve the transfer of two customers’ existing allocations to their new facilities.

 

“The Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development, 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.

RESOLVED, That the Authority hereby authorizes the transfers of six industrial power allocations in accordance with the terms described in the foregoing report of the President and Chief Executive Officer; 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.


 

8.             Energy Efficiency Improvements – NYPA Facilities Program

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize capital expenditures in the amount of $2.5 million for the implementation of energy efficiency improvements at various Authority facilities under the NYPA Facilities Program (‘Program’).  This amount will be in addition to $8.5 million in funding previously approved by the Trustees for this Program.

 

BACKGROUND

 

“The Authority has been implementing energy services programs since the 1990s as part of its overall mission to provide clean, economical and reliable energy for the benefit of its customers and the people of New York State.  The Trustees have approved more than $1.8 billion in energy services programs and in 2006 achieved a milestone by investing more than $117 million in projects throughout the State.  To date, the Authority’s programs have reduced the demand for electricity by approximately 200 MW, resulting in savings of nearly $96 million annually.

 

“Energy efficiency is a major corporate objective of the Authority, with $6.5 million in energy efficiency projects completed under the program to date at the Authority’s own facilities and headquarters sites.

 

DISCUSSION

                “Projects already implemented under the Program include energy efficiency upgrades at the Charles Poletti Power Project (‘Poletti’) ($394,000), the Blenheim-Gilboa Pumped Storage Facility ($226,000) and the St. Lawrence (‘St. Lawrence’) and Niagara (‘Niagara’) Hydro Power Projects ($2.29 million).  In addition, several projects were completed at the Authority’s headquarters offices in Albany and White Plains ($3.55 million).  Most recently, the Authority’s White Plains building was awarded a Gold Leadership in Energy and Environmental Design (‘LEED’) Certification from the United States Green Building Council.  This was based on the work implemented under the Program in 2003, as well as additional work completed in 2006.  To achieve the LEED Gold level, environmental improvements were made and energy efficiency work was done that resulted in a 50% reduction in the building’s energy consumption.

                “In the future, funding under the Program will be used to complete an upgrade to the heating, ventilation and air-conditioning (‘HVAC’) system at Niagara.  The scope of the Niagara HVAC project includes replacing aging motors that serve fans and pumps throughout the Power Project.  Variable-speed drives will be installed to optimize the operation of both fan and pump motors.  Carbon dioxide sensors will be installed on key air-handling units so that air flow to spaces can be modulated based on the space occupancy levels.  Air-handling system controls will be installed in some spaces to optimize fan and damper operation.  The total installed cost for the measures is $2.025 million.  The measures are expected to save about $211,800 per year in electrical costs.

 

“Additional work beyond the Niagara HVAC project may result from a new Authority initiative to develop sustainable principles and guidelines that will examine the ‘greening’ of the design, construction, maintenance and operations of the Authority’s generation and transmission infrastructure, as well as other equipment assets and facilities.  The overall objective of these efforts will be to enhance energy system reliability while reducing overall environmental impacts.  Preliminary audits are planned for the Poletti Administration Building and the St. Lawrence Visitors’ Center in 2007, and the Energy Control Center in 2008. 

              

FISCAL INFORMATION

 

“Funding for this program will be paid from the Capital Fund.

RECOMMENDATION

 

               “The Senior Vice President – Energy Services and Technology recommends that the Trustees authorize additional funding of $2.5 million for the NYPA Facilities Program to complete energy efficiency upgrades and improvements at the Authority’s power plant sites and headquarters offices.

 

               “The Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Executive Vice President – Corporate Services and Administration, the Senior Vice President – Marketing and Economic Development, the Senior Vice President and Chief Engineer – Power Generation, the Senior Vice President – Public and Governmental Affairs and I concur in the recommendation.”

 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

RESOLVED, That pursuant to the Authority’s Expenditure Authorization Procedures, approval is hereby granted for the expenditure of up to $2.5 million to finance the cost of energy efficiency measures at the Authority’s Power Plant sites and Headquarters Offices as recommended in the foregoing report of the President and Chief Executive Officer in the amount and for the purposes listed  below:

 

Capital Funds                                                    Expenditure

Purchase and installation of                          $2.5 million

energy efficiency and

clean technology equipment

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 resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

9.             Proposed Hydropower Contract with Niagara County and the Town of Lewiston – Notice of Public Hearing 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize a public hearing, pursuant to Section 1009 of the Public Authorities Law, on  proposed contracts with Niagara County (‘County’) and the Town of Lewiston (‘Lewiston’) for the sale of a total of 12.5 MW of Niagara Project Power.  The 12.5 MW of power and energy under these two contracts is comprised of 9 MW for sale to the County and 3.5 MW for sale to Lewiston.  The County and Lewiston, along with five other local entities[1] (collectively, ‘Host Communities’), signed the Host Community Relicensing Settlement Agreement Addressing Non-License Terms and Conditions dated June 27, 2005 (‘HCRSA’) with the Authority.  Among other things, in exchange for the support of the Host Communities for the Authority’s Niagara Power Project (‘Project’) relicensing efforts, the Authority is required to provide 9 MW of Niagara Project hydropower to the County and 3.5 MW to Lewiston, for a total of 12.5 MW.   The form of the proposed contracts with the County and Lewiston is attached as Exhibit ‘9-A.’

 

BACKGROUND

 

                “The existing 50-year license issued to the Authority under the Federal Power Act for the Project expires on August 31, 2007.  At their meeting of June 28, 2005, the Trustees authorized the President and Chief Executive Officer (and his designees) to file an Application for a New License (‘Application’) with the Federal Energy Regulatory Commission (‘FERC’) for the Project; to file related applications with the New York State Department of State and the New York State Department of Environmental Conservation and an Offer of Settlement with FERC (‘Offer of Settlement’); to enter into and execute settlement agreements and to execute such other documents and take such other actions as may be necessary or convenient in connection with such actions.  The Application was filed with FERC on August 18, 2005 and the Offer of Settlement was filed with FERC the following day.

 

“Since its filing, the Offer of Settlement has been supplemented twice with two additional agreements.  These Agreements were filed with FERC on May 26, 2006 and June 30, 2006, respectively, after being approved by the Trustees at their meetings of May 23, 2006 and June 27, 2006, respectively.

“During the course of the Alternative Licensing Process, the Host Communities raised a number of issues relating to the loss of taxable land as a result of the Project, and settlement negotiations between the Host Communities and the Authority commenced in 2004.  These negotiations resulted in the HCRSA, which includes an allocation of 25[2] MW of Project power to the Host Communities.  The HCRSA represents complete settlement of all issues raised by the Host Communities during the relicensing proceeding.

 

 

 

DISCUSSION

 

“The proposed contracts are two of several that will implement the power allocations to the Host Communities.  It would make available 9 MW of Project power and energy to the County and 3.5 MW to Lewiston.  The power will come largely from the block of Niagara Project power now sold to the three Upstate investor owned utilities (National Grid, NYSEG and RG&E) for the benefit of their domestic and rural consumers under contracts that expire on August 31, 2007.  The remainder of the power will come from the non-preference part of the power produced by the Niagara Project Upgrade.  The proposed contracts for the County and Lewiston contemplate delivery of power and energy at the Project switchyard.  It will be the responsibility of the County and Lewiston to arrange for delivery of the power or the benefits of the power to ultimate users. 

 

“The Authority’s obligation to sell power and energy to the County and Lewiston, pursuant to the HCRSA, shall become effective on the latest of: (1) the first day after the date of the ‘Acceptance of the New License,[3] (2) the date on which the Authority and the Host Communities execute a contract for the sale of power and energy, or
(3) September 1, 2007.  The proposed contract runs through September 1, 2025, the same as the current Niagara contracts with the municipal and rural electric cooperative customers and the Neighboring States.  A successor contract will be required to meet the terms of the HCRSA.  If the license is not granted to the Authority, the contracts would be of no force and effect. 

 

“Proposed contracts concerning the allocations of the remaining 12.5 MW of power for the other five Host Communities will be brought before the Trustees at a future meeting.

 

FISCAL INFORMATION

 

“The 12.5 MW of Project power and energy allocated to the County and Lewiston under the proposed contracts will be sold at the then-effective preference power rate that fully recovers the Authority’s costs. 

 

RECOMMENDATION

 

“The Executive Director – Hydropower Relicensing recommends that the Trustees authorize a public hearing on the proposed contracts with Niagara County and the Town of Lewiston to be held at a time and date authorized by the Chairman.  It is further recommended that, pursuant to Section 1009 of the Public Authorities Law, the Corporate Secretary be authorized to transmit copies of the proposed contracts to the Governor and legislative leaders.

 

“The Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development, the Senior Vice President – Public and Governmental Affairs and I concur in the recommendation.” 

 

                Mr. Vattimo presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Chairman McCullough, Mr. Vattimo said that Authority staff anticipates holding the public hearing in May at the Niagara plant.  Responding to a question from Trustee Seymour, Mr. Vattimo said that negotiations on some of the contracts were still ongoing.  President Carey said that the plan is to hold just one hearing on all of the contracts.  

 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

RESOLVED, That the Authority hereby authorizes a public hearing on the terms of the proposed contracts for the sale of hydroelectric power and energy generated by the Authority to Niagara County and the Town of Lewiston to be held at a subsequent time and date authorized by the Chairman; and be it further

 

RESOLVED, That the Corporate Secretary be, and hereby is, authorized to transmit copies of the proposed contract to the Governor, the Speaker of the Assembly, the Minority Leader of the Assembly, the Chairman of the Assembly Committee on Ways and Means, the Temporary President of the Senate, the Minority Leader of the Senate and the Chairman of the Senate Finance Committee pursuant to Section 1009 of the Public Authorities Law; and be it further

 

RESOLVED, That the President and Chief Executive Officer or his designee be, and hereby is, authorized, subject to approval of the form thereof by the Executive Vice President and General Counsel, to enter into such other agreements, and to do such other things as may be necessary or desirable to implement sales to Niagara County and the Town of Lewiston as required by the Host Communities Relicensing Settlement Agreement filed with the Federal Energy Regulatory Commission in support of the anticipated new Niagara Project license and as set forth in the foregoing report of the President and Chief Executive Officer; 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.

 


 

10.          INFORMATIONAL ITEM: Permits for Temporary Use of Office Space in the Clarence D. Rappleyea Building to New York State

                 Retirement Systems and New York State Police 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize two separate permit transactions.  The first is to amend a permit with the New York State Retirement Systems (‘Retirement Systems’) for the use of approximately 1,250 rentable square feet (‘rsf’) of office space on the lobby floor of the Clarence D. Rappleyea Building (‘Building’) in White Plains.  This amendment would extend the term of the current permit, which expires on March 11, 2007, for an additional year and nine months to December 31, 2008.  The consideration for the permit is $6,900 annually, inclusive of electricity.

 

“The second transaction is to amend a permit with the New York State Police (‘State Police’) for the use of approximately 3,150 rsf of office space on the 6th floor of the Building.  This amendment would extend the current permit, which expires April 30, 2007, for an additional year and eight months to December 31, 2008, along with increasing the annual consideration to $47,250, inclusive of electricity.

 

BACKGROUND

 

“By deed dated July 10, 1991, the Authority acquired the Building, a commercial office building containing approximately 420,195 rsf.  Currently, the Authority is leasing approximately 167,300 rsf of the Building.  Retirement Systems has had a temporary use permit since March 2001, subject to revocation at any time and for any reason at the sole discretion of the Authority upon 30 days’ written notice.  Additionally, since August 2002, the State Police have had a temporary use permit that provides for 60 days’ written notice of revocation from the Authority.

 

DISCUSSION

 

“At the request of the Retirement Systems and the State Police, the Authority entered into Temporary Use Permits to assist both agencies in obtaining office space at reasonable rates in the White Plains central business district.  This additional space reduces the State’s costs and provides for additional staffing requirements in the White Plains area to further the public health, safety or welfare for the citizens of the State of New York.

 

                “The Authority has not determined this property to be surplus to the Authority’s needs and the permits are revocable on either 30 or 60 days’ prior written notice as set forth herein.  Therefore, these two transactions do not fall within the Authority’s guidelines and procedures for disposal of real property and are not subject to the Public Authority Accountability Act of 2005.”

 


 

11.          Motion to Conduct an Executive Session

               

“Mr. Chairman, I move that the Authority conduct an Executive Session for the purpose of discussing matters regarding the GE litigation.”  Upon motion moved and seconded, an Executive Session was held.


 

12.          Motion to Resume Meeting in Open Session

“Mr. Chairman, I move to resume the meeting in Open Session.”  Upon motion moved and seconded, the meeting resumed in Open Session.


 

13.          Next Meeting

The next meeting of the Trustees will be held on Tuesday, March 27, 2007, at 11:00 a.m., at the Albany Office, Albany, New York, unless otherwise designated by the Chairman with the concurrence of the Trustees.

Text Box: FEBMINS.07

 

 

 


 

Closing

On motion duly made and seconded, the meeting was adjourned by the Chairman at approximately
12:15 p.m.

 

 

 

 

Anne B. Cahill

Corporate Secretary

 

 


 

[1]  The City of Niagara Falls School District, the City of Niagara Falls, the Lewiston-Porter School District, the Niagara Wheatfield School District and the Town of Niagara.

[2]   The Authority has already identified a block of 24 MW for sale in 2007 if needed in order to meet its obligation to the Host Communities Fund.  Current market forecasts, however, suggest that the Authority may be able to sell less than 24 MW in 2007 to fund the $5 million initial payment to the Host Communities.  If this assumption is correct, the Authority may have excess power available.  For example, if the Authority only has to sell 22 MW of power in 2007 in order to realize $5 million to support the Authority’s Host Community Fund, 2 MW might become available to the Authority.

The Authority has agreed that any excess power, up to 3MW, that becomes available (i.e., that portion of the 24 MW that is not required to be sold into the market in order to meet its $5 million obligation under the HCRSA) will be provided to Lewiston by the Authority in the form of a power allocation.

 

3    “Acceptance of the New License” is defined in the HCRSA as the date upon which the Authority files its acceptance of the New License with FERC, or the date of the expiration of the existing original license, August 31, 2007, whichever occurs later.