MINUTES OF THE REGULAR MEETING O

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 11:00 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)

James A. Besha, Sr., Trustee (White Plains, NY)

Elise M. Cusack, Trustee (Lewiston, NY)

Robert E. Moses, Trustee (White Plains, NY)

Thomas W. Scozzafava, Trustee (White Plains, NY)

Leonard N. Spano, Trustee (White Plains, NY)

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Roger B. Kelley President and Chief Executive Officer

Thomas J. Kelly Executive Vice President, General Counsel and Chief of Staff

Joseph Del Sindaco Executive Vice President and Chief Financial Officer

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

Steven J. DeCarlo Senior Vice President – Transmission

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

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

James H.Yates Senior Vice President – Marketing and Economic Development

Thomas P. Antenucci Vice President – Project Management

Arnold M. Bellis Vice President, Controller

John M. Hoff Vice President – Procurement and Real Estate

Donald A. Russak Vice President – Finance

Thomas Warmath Vice President and Chief Risk Officer

Daniel Wiese Inspector General and Vice President – Corporate Security

Brian C. McElroy Treasurer – Corporate Finance

Lisa A. Cole Deputy Treasurer

Anne B. Cahill Corporate Secretary

Angela D. Graves Deputy Corporate Secretary

Dennis T. Eccleston Chief Information Officer

Arthur T. Cambouris Assistant General Counsel and Managing Attorney – Litigation

Joseph J. Carline Assistant General Counsel – Power and Transmission

Paul F. Finnegan Executive Director – Public and Governmental Affairs

John J. Suloway Executive Director – Licensing, Implementation and Compliance

Thomas A. Davis Director – Financial Planning

Joseph Leary Director – SENY – Public and Governmental Affairs

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

Cooperative Marketing

Michael A. Saltzman Director – Media Relations – Public and Governmental Affairs

Marilyn J. Brown Manager – Market Pricing Analysis

Caroline G. Garcia Manager – Power Contracts

Lesly Y. Pardo Manager – Internal Audit

Mary Jean Frank Associate Corporate Secretary

Lorna M. Johnson Assistant Corporate Secretary

Jack Murphy Temporary Public Relations Counsel

Timothy Sheehan Principal Attorney II – Financial Affairs

Felix E. DeJesus Consultant – Marketing Economic Development

Oksana U. Karaczewsky Senior Procurement Compliance Coordinator

Jeremy Colgan Bond Counsel, Hawkins Delafield and Wood, LLP

John Connorton Bond Counsel, Hawkins Delafield and Wood, LLP

Michael Mace Advisor, Public Financial Management, Inc.

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

3. Report from the President and Chief Executive Officer

President Roger Kelley said that on Friday, September 21, 2007, the Federal Energy Regulatory Commission (“FERC”) had issued an order denying the rehearing that had been filed by various parties following the issuance of the new Niagara license in March 2007. This means that the Authority can continue to move forward with implementing its new license and the commitments of the settlement agreements for the benefit of the Niagara region.

President Kelley said that he’s had a very productive couple of months and listed some of the activities in which he’s been involved since the last Trustees’ meeting in July, including:

Numerous meetings with the Authority’s western New York customers, including the Buffalo-Niagara Partnership and others, regarding their concerns about the allocation of power after 2012.
Giving a speech about relicensing and conservation at the annual meeting of the Municipal Electric Utilities Association.
Meeting with the Authority’s Southeastern New York (“SENY”) customers, including representatives from Mayor Bloomberg’s office, about their power options following the planned 2010 closure of the Poletti plant.
Participating in several meetings with the Governor’s office and the Division of the Budget regarding economic development issues.
Meeting with Dan Gunderson, the Upstate Chair of the Empire State Development Corporation, about North Country economic development issues.
Meeting with staff from the Governor’s and the Lieutenant Governor’s offices about the renewable portfolio standards and coordination of energy efficiency initiatives regarding attainment of the Governor’s “15 by 15” initiative.

President Kelley then mentioned that he was scheduled to give the keynote address at the Annual Fall Meeting of the Independent Power Producers of New York and would discuss, among other things, energy conservation and the Authority’s ability to bid on KeySpan’s 2,450 MW Ravenswood project in New York City.

He stated that on behalf of the Authority he recently attended the annual Lewiston Jazz Festival, of which the Authority is a sponsor, and participated in a recent press conference in Buffalo where he made the second $2 million installment payment to Erie Canal Harbor Development Corporation for redeveloping the Buffalo waterfront under one of the Niagara relicensing settlement agreements.

President Kelley advised the Trustees that the Hinckley Reservoir, site of the Authority’s Jarvis hydroelectric plant, was abnormally low and that the Authority had recently sent a letter to FERC requesting an exemption from the minimum flow level requirement, since that was at odds with the Authority’s need to draw down the reservoir to run the Jarvis plant.

Finally, President Kelley briefed the Trustees about a developing situation with four of the recently refurbished stators at the Niagara project and said that he would keep the Trustees advised as the situation develops.

Chairman Frank McCullough said that it’s obvious that President Kelley has been extremely busy and that he appreciated the personal attention, energy and enthusiasm he was bringing to everything he did in his 24/7 job.

4. 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 64 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘4-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 and increase the size of the program to 450 MW.

“In May 2000, legislation was enacted that authorized another 300 MW of power to be allocated under the PFJ program. Legislation further amended the program in July 2002.

“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. Chapter 645 of the Laws of 2006 included provisions extending program benefits until June 30, 2007.

“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.

DISCUSSION

“At its meeting on September 24, 2007, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 64 businesses listed in Exhibit ‘4-A.’ Collectively, these organizations have agreed to retain more than 57,000 jobs in New York State in exchange for the rebates.

“The Trustees are requested to approve the payment and funding of rebates for the companies listed in Exhibit ‘4-A’ in a total amount currently not expected to exceed $7.6 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 ‘4-A’ is not expected to exceed $7.6 million. Payments will be made from the Operating Fund. To date, the Trustees have approved $90 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 ‘4-A.’

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

WHEREAS, the Economic Development Power Allocation Board (“EDPAB”) has recommended that the Authority approve electricity savings reimbursements to the Power for Jobs (“PFJ”) customers listed in Exhibit “4-A”;

NOW THEREFORE BE IT RESOLVED, That to implement such EDPAB recommendations, the Authority hereby approves the payment of electricity savings reimbursements to the companies listed in Exhibit “4-A” and that the Authority finds that such payments for electricity savings reimbursements are in all respects reasonable, consistent with the requirements of the PFJ 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 $7.6 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 his designee, be, and hereby is, authorized to negotiate and execute any and all documents necessary or desirable to effectuate the foregoing, subject to approval of the form thereof by the Executive Vice President, General Counsel and Chief of Staff; 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 certificates, agreements and other documents to effectuate the foregoing resolutions, subject to the approval of the form thereof by the Executive Vice President, General Counsel and Chief of Staff.

5. Location of 3,900 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 3,900 kW to two industrial companies.

BACKGROUND

“Under Section 1005(13) of the Power Authority Act, as amended by Chapter 313 of the Laws of 2005, the Authority may contract to allocate or reallocate directly, or by sale for resale, 250 MW of firm hydroelectric power as Expansion Power 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. Allocations are made pursuant to criteria set forth in Section
1002(13).

“On October 22, 2003, the Authority, National 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.

DISCUSSION

“Staff recommends and the Advisory Group supports the available power being allocated to the two companies set forth in Exhibit ‘5-A.’ The Exhibit shows, among other things, the amount of power requested, the recommended allocation 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 58 jobs.

RECOMMENDATION

“The Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing recommends that the Trustees approve the allocation of 3,900 kW of hydropower to the companies listed in Exhibit ‘5-A.’

“The Executive Vice President, General Counsel and Chief of Staff, 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 3,900 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, General Counsel and Chief of Staff.

Exhibit “5-A1”

APPLICATION SUMMARY

Replacement Power

Company: Devil’s Hole Distilling

Location: Lewiston

County: Niagara

IOU: National Grid

Business Activity: Distillery; principal product is branded luxury vodka

Project Description: The project will include building a new 2,000-square-foot facility and then installing the equipment to manufacture the product, including distilling equipment, fermentation tanks, fruit-processing equipment, piping, an agitator and pumps.

Existing Allocation: None

Power Request: 600 kW

Power Recommended: 400 kW

Job Commitment:

Existing: 0 jobs

New: 8 jobs

New Jobs/Power Ratio: 20 jobs/MW

New Jobs -

Avg. Wage and Benefits: $48,000

Capital Investment: $600,000

Capital Investment per MW: $1.5 million/MW

Summary: The company is a start-up boutique distillery whose principal product is branded luxury artisanal vodka, handcrafted in small batches from New York State-grown apples. In addition to its flagship branded products, the company also will have the ability to produce other distilled sprits made from a minimum of 75% New York State-grown agricultural products. Given its proximity to both Niagara County’s numerous fruit growers and Lake Ontario, the company has a competitive advantage in terms of both availability and cost in obtaining the raw materials for the distillation process. These advantages, along with a low-cost power allocation, will allow the company to develop and maintain a competitive pricing strategy as well.

Exhibit “5-A2”

APPLICATION SUMMARY

Replacement Power

Company: Unifrax I LLC

Location: Tonawanda

County: Erie

IOU: National Grid

Business Activity: Manufacturer ceramic fiber insulation products

Project Description: The expansion project includes a facility addition along with new equipment to expand the production capacity of the Tonawanda plant. The expansion will provide capability to support growing demand in the catalytic converter market. The equipment to be installed will both expand papermaking capability and increase the range of products that can be produced on existing production lines. The new equipment would include tanks, pumps, a mixer, dryers, ovens, die cutters and other processing equipment.

Existing Allocation: 3,600 kW of Replacement Power

Power Request: 4,000 kW

Power Recommended: 3,500 kW

Job Commitment:

Existing: 188 jobs

New: 50 jobs

New Jobs/Power Ratio: 14 jobs/MW

Total Jobs/Power Ratio: 34 jobs/MW (all allocations)

New Jobs -

Avg. Wage and Benefits: $63,000

Capital Investment: $20 million (an additional $1.75 million will be invested by building owner)

Capital Investment per MW: $5.71million/MW

Summary: Product improvements are essential to achieve market growth targets and support existing customer sales. Without this expansion, capacity would most likely be pursued within European operations. Unifrax is currently evaluating several locations for addition of this new capacity, including Indiana, China, France, Germany, Czech Republic and the United Kingdom. All of these locations are preparing competitive proposals for this expansion and are actively soliciting local government incentives. A low-cost power allocation would help Unifrax build its case to locate this expansion in western New York.

6. Incremental Power Supply Arrangements with Full-Requirements Municipal and Rural Electric Cooperative Systems

The President and Chief Executive Officer submitted the following report:

“The Trustees are requested to authorize the Acting Senior Vice President – Marketing and Economic Development to negotiate and execute agreements for incremental power service with any or all of the full-requirements municipal and rural electric cooperative systems. The current 10 full-requirements municipal systems (‘munis’) and four rural electric cooperative systems (‘Coops’) are shown on the Exhibit ‘6-A.’

BACKGROUND

“The Authority presently serves 14 munis and coops (‘Customer Group’) as full-requirements systems. Full-requirements systems are supplied all their power needs, including hydro power from the Niagara project and incremental (consisting of market purchases) by the Authority. The Customer Group is in the last year of a 12-year contract for their incremental power. These customers have the right to transfer to partial-requirements status, purchasing only Authority hydro power, by providing the Authority written notice. By mid-2007, two of the munis had provided the required notice to transfer to partial-requirements status effective January 1, 2008.

“In 2006, annual revenues from the Customer Group were approximately $35.7 million, of which $20.8 million was for hydropower purchases and $14.9 million was for incremental power purchases. Of this total, $8.2 million was for power transmission and wheeling.

DISCUSSION

“At the request of the Customer Group, Authority staff has held discussions with the customers seeking to arrive at an arrangement under which these systems could remain full-requirements customers of the Authority. An agreement has been reached by which the Authority will procure all of the Customer Group’s incremental power needs by purchasing the supply in the day-ahead market of the New York Independent System Operator (‘NYISO’). Balancing any undersupply from that scheduled in the day-ahead market will take place in the real-time market. The customers will pay the Authority all costs it incurs to supply incremental power and energy to them. Such costs, which will be passed through to the customers on their monthly bills, will consist of the following:

· All UCAP purchases, if any, necessary to supply the customers;

· All NYISO costs, including Ancillary Services 1 through 6, marginal losses, NTAC and congestion costs associated with deliveries to the customers; and

· All Authority administrative overhead costs associated with the supply of incremental power and energy.

“In addition, the customers will be responsible for any other costs, fees, taxes or assessments imposed on the Authority by the NYISO or any other third party that are associated with the Authority’s role as load-serving entity to the customers. The initial term of the agreement will be for the two-year period beginning January 1, 2008 and ending December 31, 2009. Thereafter, the agreement can be renewed by mutual agreement on a year-to-year basis. The agreement can be cancelled by the customer submitting a request in writing 90 days in advance of the proposed cancellation date.

RECOMMENDATION

“The Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing recommends that the Trustees authorize the Senior Vice President – Marketing and Economic Development to negotiate and execute incremental power supply agreements with the eight full-requirements municipal electric systems and the four full-requirements rural electric cooperative systems.

“The Executive Vice President, General Counsel and Chief of Staff, 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 adopted by a vote of 6 to 1 with Trustee Besha recusing himself.

RESOLVED, That the Senior Vice President – Marketing and Economic Development, or his designee, be, and hereby is, authorized to negotiate and execute long-term power supply arrangements with any or all of the full-requirements municipal and electric rural cooperative systems as set forth in the foregoing report of the President and Chief Executive Officer; and be it further

RESOLVED, That the Senior Vice President – Marketing and Economic Development, or his designee, be, and hereby is, authorized to execute any and all documents necessary or desirable to effectuate the foregoing, subject to approval of the form thereof by the Executive Vice President, General Counsel and Chief of Staff; 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, General Counsel and Chief of Staff.

Exhibit “6-A”

Listing of Full Requirements Customers

Municipal Customers Will Accept New Agreement

1. Village of Fairport No

2. Village of Greenport Yes

3. Village of Lake Placid Yes

4. Village of Marathon Yes

5. Village of Mayville Yes

6. City if Sherrill Yes

7. Village of Solvay Yes

8. Village of Tupper Lake Yes

9. Village of Watkins Glen Yes

10. Village of Westfield No

Cooperative Customers

1. Delaware Electric Cooperative Yes

2. Oneida Madison Electric Cooperative Yes

3. Otsego Electric Cooperative Yes

4. Steuben Electric Cooperative Yes

7. Village of Marathon – Increase in Retail Rates – Notice of Adoption

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Board of the Village of Marathon (‘Village Board’) has requested the Trustees to approve revisions to the Village of Marathon’s (‘Village’) retail rates for each customer service classification. These revisions will result in additional total annual revenues of about $125,000, or 11%.

BACKGROUND

“The Village Board has requested the proposed rate increase primarily to provide additional revenues to allow for sufficient working funds and meet forecasted increases in operation and maintenance expenses and additional debt payment requirements. The current rates have been in effect since April 1991.

“The Village Board has planned upgrades to the electric system amounting to $500,000 in order to maintain reliable service to its customers. The upgrades will be directed primarily at substation distribution equipment, new customer meters and a load management system. The Village is planning to debt-finance $475,000 of its capital program by issuing a new bond.

“Under the new rates, an average residential customer who currently pays about 5.5 cents per kWh will pay about 6.1 cents after the increase. A small commercial customer that currently pays 6.0 cents per kWh will pay 6.6 cents and large commercial customers that presently pay 4.6 cents per kWh will pay 5.1 cents after the increase.

DISCUSSION

“The proposed rate revisions are based on a cost-of-service study requested by the Village and prepared by Authority staff. A public hearing was held by the Village of Marathon on May 30, 2007. No ratepayer comments were received at the public hearing. The Village Board has requested that the proposed rates be approved.

“Pursuant to the approved procedures, the Senior Vice President – Marketing and Economic Development requested that the Corporate Secretary file a notice for publication in the New York State Register of the Village’s proposed revision in retail rates. Such notice was published on July 3, 2007. No comments concerning the proposed action have been received by the Authority’s Corporate Secretary.

“An expense and revenue summary, comparisons of present and proposed total annual revenues and their corresponding rates by service classification are attached as Exhibits ‘7-A,’ ‘7-B’ and ‘7-C,’ respectively.

RECOMMENDATION

“The Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing recommends that the attached schedule of rates for the Village of Marathon be approved as requested by the Board of the Village of Marathon, to take effect beginning with the first full billing period following the date this resolution is adopted.

“It is also recommended that the Trustees authorize the Corporate Secretary to file a notice of adoption with the Secretary of State for publication in the New York State Register and to file such other notice as may be required by statute or regulation.

“The Executive Vice President, General Counsel and Chief of Staff, 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 proposed rates for electric service for the Village of Marathon, as requested by the Village Board, be approved, to take effect with the first full billing period following this date, as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, authorized to file a notice of adoption with the Secretary of State for publication in the New York State Register and to file any other notice required by statute or regulation; 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, General Counsel and Chief of Staff.

Exhibit "7-A"

Village of Marathon

Expense and Revenue Summary

Five-Year

Average 2006 Proposed¹

Purchase Power Expense

(Authority hydro and incremental) $475,296 $ 638,833 $ 688,655

Distribution Expense (Village-owned facilities) 187,740 201,697 191,443

Depreciation Expense

(On all capital facilities and equipment) 72,413 73,574 154,584

General and Administrative Expenses

(Salaries, insurance, management services and 102,330 128,646 109,461

Administrative expenses)

Total Operating Expenses 837,509 1,042,570 1,144,143

Net Rate of Return – (average 3.5%, proposed 6.9%)

(includes debt service on current and planned debt,

cash reserves and contingencies) 52,231 -0- 110,344

Total Cost of Service $890,010 $1,042,570 $1,254,487

Revenue at Present Rates 1,129,916

Deficiency at Current Rates &n

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