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
11:15 a.m.:
1)
New York Power Authority, 123 Main Street, White Plains, NY
2)
Niagara Power Project, 5777 Lewiston Road, Lewiston, New York
The
following Members of the Board were present at the following locations:
Present: 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)
James, A. Besha, Sr., Trustee (White Plains,
NY)
D. Patrick Curley, 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
Gil C. Quiniones Executive Vice President
– Energy Marketing and Corporate Affairs
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
Edward A. Welz Senior Vice President and
Chief Engineer – Power Generation
James H. Yates Senior Vice President –
Marketing and Economic Development
Arnold M. Bellis Vice President and
Controller
Paul F. Finnegan Vice
President – Intergovernmental and Community Affairs
Lesly Y. Pardo Vice President –
Internal Audit
Donald A. Russak Vice President – Finance
William
V. Slade Vice President – Environment,
Health and Safety
Thomas
Warmath Vice President and Chief Risk Officer
Stephen
P. Shoenholz Deputy Vice President - Public Affairs
Daniel Wiese Inspector General and
Vice President – Corporate Security
Brian C. McElroy Treasurer – Corporate
Finance
Anne B. Cahill
Corporate Secretary
Angela D. Graves Deputy Corporate Secretary
Dennis T. Eccleston Chief
Information Officer
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
Victoria Simon Director – Business
Integration and Special Projects
Michael
Nash Engineering Manager – Energy
Services and Technology
Lou
Paonessa Community Relations Manager -
Niagara Power Project
Mary Jean Frank
Associate Corporate Secretary
Lorna M. Johnson Assistant Corporate Secretary
Jack Murphy Temporary Public
Relations Counsel
Chairman McCullough
presided over the meeting. Secretary Cahill kept the Minutes.
1.
Consent Agenda:
a.
Minutes
of the Regular Meeting held on January 29, 2008
The Minutes of the
Regular Meeting held on January 29, 2008 were unanimously adopted.
b. 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 23 Power for Jobs (‘PFJ’) customers as
listed in Exhibit ‘1b-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.
“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. In 2007, a new
law (Chapter 89 of the Laws of 2007) included provisions extending program
benefits until June 30, 2008.
“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 February
25, 2008, EDPAB recommended that the Authority’s Trustees approve
electricity savings reimbursement rebates to the 23 businesses listed in
Exhibit ‘1b-A.’ Collectively, these organizations have agreed to retain
more than 21,400 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 ‘1b-A’ in a total amount currently not expected to exceed $2.6
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 Exhibit in the future.
FISCAL INFORMATION
“Funding of rebates for the
companies listed in Exhibit ‘1b-A’ is not expected to exceed $2.6 million.
Payments will be made from the Operating Fund. To date, the Trustees have
approved $110.8 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 ‘1b-A.’
“The Executive Vice President, General
Counsel and Chief of Staff, the Executive Vice President – Energy Marketing
and Corporate Affairs, 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.
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 “1b-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
“1b-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 $2.6 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 the 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 resolution, subject to the
approval of the form thereof by the Executive Vice President, General
Counsel and Chief of Staff.
Exhibit 1b-A
c. Allocation of 130
kW of Hydropower
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 130 kW to
Shipman Printing Industries, Inc.
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 (‘hydropower’) as Expansion Power
(‘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 continues to
be allocated in such county.
“Each application for an
allocation of EP or RP must be evaluated under criteria that include, but
need not be limited to, those set forth in Public Authorities Law Section
1005(13) (a), which sets forth general eligibility requirements.
“Among the factors to be
considered when evaluating a request for an allocation of hydropower are the
number of jobs created as a result of a power allocation; the business’
long- term commitment to the region as evidenced by the current and/or
planned capital investment in the business’ facilities in the region; the
ratio of the number of jobs to be created to the amount of power requested;
the types of jobs created, as measured by wage and benefit levels, security
and stability of employment and the type and cost of buildings, equipment
and facilities to be constructed, enlarged or installed.
“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
hydropower. 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 hydropower.
DISCUSSION
“Staff recommends and the Advisory
Group supports the available power being allocated to Shipman Printing
Industries, Inc., as set forth in Exhibit ‘1c-A.’ The Exhibit shows, among
other things, the amount of power requested, 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 five jobs.
RECOMMENDATION
“The Director – Business
Power Allocations, Compliance and Municipal and Cooperative Marketing
recommends that the Trustees approve the allocation of 130 kW of hydropower
to the company listed in Exhibit
‘1c-A.’
“The Executive Vice President, General
Counsel and Chief of Staff, the Executive Vice President – Energy Marketing
and Corporate Affairs, 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
130 kW of Replacement Power, as detailed in Exhibit “1c-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 1C-A
APPLICATION
SUMMARY
Replacement Power
Company: Shipman Printing Industries, Inc.
Location: Wheatfield
County: Niagara
IOU:
National Grid
Business Activity: Printing services
Project Description: The expansion project
will allow Shipman to expand its product line and upgrade the power supply
coming into its production facility. An additional power supply will enable
the company to upgrade its existing commercial press with an ultraviolet
drying system. The company will also be able to replace its existing web
press with a new, faster web press that will greatly enhance the quality of
the company’s products.
Existing Allocation: None
Power Request: 136 kW
Power Recommended: 130 kW
Job
Commitment:
Existing: 34
jobs
New: 5 jobs
New
Jobs/Power Ratio: 38 jobs/MW
New
Jobs -
Avg. Wage and Benefits: $38,000
Capital Investment: $900,000
Capital Investment
per MW: $6.9 million/MW
Summary: Shipman must make
business changes to keep pace with customer demand and competition.
Shipman’s ability to continue as a thriving business hinges on its having
the resources to invest in the company and its employees. Without the power
expansion, Shipman will be forced to remain at the status quo, since its
current equipment is maxing out its present power supply. Additional power
will allow the company to move forward and remain competitive.
d.
City of Sherrill – Increase in Retail
Rates - Notice of Adoption
The President and Chief
Executive Officer submitted the following report:
SUMMARY
“The Board of the City of Sherrill
(‘City Board’) has requested the Trustees to approve revisions to the City
of Sherrill’s (‘City’) retail rates for each customer service
classification. These revisions will result in an additional 2.5% in total
annual revenues, or about $72,500.
BACKGROUND
“The City 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 1982.
“The
Village Board has planned upgrades to the electric system amounting to
$470,000 in order to provide reliable service to its customers. The
upgrades will be directed primarily at substation distribution equipment,
acquisition of smart customer meters and a bucket truck. The Village is
planning to debt-finance 90% of its capital program by issuing a new bond.
“Under
the new rates, an average residential customer who currently pays about 4.5
cents per kWh will pay about 4.6 cents per kWh. A small commercial customer
that currently pays 4.3 cents per kWh will pay 4.4 cents per kWh, a large
commercial customer will continue to pay 3.9 cents per kWh and the average
industrial customer that currently pays 8.3 cents per kWh will pay 8.5 cents
per kWh.
DISCUSSION
“The proposed rate revisions are based
on a cost-of-service study requested by the City and prepared by Authority
staff. A public hearing was held by the City of Sherrill on November 26,
2007. No ratepayer comments were received at the public hearing. The City
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 City’s proposed revision in retail rates.
Such notice was published on December 26, 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
‘1d-A,’ ‘1d-B’ and ‘1d-C,’ respectively. The rates were designed to
encourage conservation by the largest users of power.
RECOMMENDATION
“The
Director – Business Power Allocations, Compliance and Municipal and
Cooperative Marketing recommends that the attached schedule of rates for the
City of Sherrill be approved as requested by the Board of the City of
Sherrill 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
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 Executive
Vice President – Energy Marketing and Corporate Affairs, 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 City of Sherrill, as requested by the Board of the
City of Sherrill, 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 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
“1d-A”
February 26, 2008
City of Sherrill
Expense
and Revenue Summary
Four-Year
Average 2006 Proposed1
Purchase Power Expense
(NYPA hydro and
incremental) $ 1,317,104 $ 1,736,859 $
2,142,739
Distribution Expense
(City-owned facilities) 229,933 252,473
260,410
Depreciation Expense
(on all capital
facilities and equipment) 127,671 129,682
185,219
General and
Administrative Expenses
(salaries, insurance,
management services
and administrative
expenses) 228,090 256,194
304,000
Total Operating
Expenses 1,902,798
2,375,208 2,892,368
Net Rate of Return –
(average four years -
1.3%, 2006 – 0%,
proposed - 7.2%)
(includes debt service
on current and planned
debt, cash reserves and
contingencies) 23,426 -0-
131,720
Total Cost of
Service $1,926,224 $
2,375,208 $ 3,024,088
Revenue at Present
Rates
2,951,617
Deficiency at Current
Rates
72,471
Revenue at Proposed
Rates
$ 3,024,088
Increase % at Proposed
Rates
2.5%
1Based
on four years of historical and projected data.
Exhibit “1d-B”
February 26,
2008
City of Sherrill
Comparison of Present and Proposed
Annual Total Revenues
SERVICE PRESENT
PROPOSED % CLASSIFICATION
REVENUE REVENUE
INCREASE
Residential – SC1 $ 1,034,549 $
1,059,950 2.5%
Small Commercial – SC2 132,551
135,806 2.5%
Large Commercial - SC3 173,837 178,106
2.5%
Security Lights – SC4 30,949
31,708 2.5%
Industrial – SC5 1,579,731 1,618,518
2.5%
Total
$ 2,951,617 $ 3,024,088
2.5%
Exhibit
“1d-C”
February 26, 2008
Page 1
City of
Sherrill
Comparison of Present and Proposed Net Monthly Rates
Present ¹
Proposed ¹
Rates
Rates
Residential SC 1
$ 3.20 Customer
Charge $ 5.05
Energy
Charge, per kWh
$
.0434 First 1,750
kWh $ .0408
$
.0434 Over 1,750
kWh $ .0501
Small Commercial SC 2
$ 5.12 Customer
Charge $ 6.50
$
.0418 Energy Charge, per
kWh $ .0425
Large Commercial SC 3
$ 2.15 Demand Charge, per
KW $ 3.75
$
.0332 Energy Charge, per
kWh $ .0301
_____________
¹
Average annual purchased power
adjustment (PPA) reflected in present and proposed rates.
Exhibit “1d-C”
February 26, 2008
Page 2
City of
Sherrill
Comparison of Present and Proposed Net Monthly Rates
Present
¹
Proposed ¹
Rates
Rates
Security Lights SC 4
Per month, per
unit of:
$
3.63 100 Watts – High-Pressure
Sodium $ 4.95
$
5.20 150 Watts – High-Pressure
Sodium $ 7.09
$
7.50 250 Watts – High-Pressure
Sodium $ 0.23
$
6.87 400 Watts – High-Pressure
Sodium $ 9.37
$
15.50 1000 Watts – High-Pressure
Sodium $ 1.15
$
3.63 100 Watts – Mercury
Vapor $ .95
$
2.80 175 Watts – Mercury
Vapor $ .82
$
11.87 200 Watts – Mercury
Vapor $16.19
$
9.90 1000 Watts – Mercury
Vapor $ 13.51
$
9.10 400 Watts –
Halogen $ 12.41
$
9.90 1000 Watts –
Halogen $ 13.51
Industrial SC 5
$
1.92 Demand Charge, per
KW $ 3.75
$
.0318 Energy Charge, per
kWh $ .0271
_______________
¹
Average annual purchased power
adjustment (PPA) reflected in present and proposed rates.
2.
Financial Reports for the Year Ended December 31, 200 and the Month of January
2008
Mr. Arnold Bellis presented the highlights of the
financial reports to the Trustees. Trustee Curley requested, and the other
Trustees concurred, that in the future Niagara and St. Lawrence revenues be
reported separately and not combined.
3.
Report from the President and Chief Executive Officer
President Roger Kelley said that work is continuing on RFP #5, which
seeks to bring additional generating capacity to the Authority’s
Southeastern New York customers, with the goal of making a recommendation to
the Trustees at their April meeting.
With regard to RFP #4, the Hudson Transmission Partners
cross-Hudson project, the technical design has been advanced and the Article
VII application has been filed by Hudson with the New York State Public
Service Commission.
According to President Kelley, the Blenheim-Gilboa Unit 2
345 kV oil-filled cable failed on February 6th. A vendor, USi,
was immediately mobilized to implement repairs under an existing contract
previously authorized by the Trustees. President Kelley signed an interim
authorization to increase the compensation ceiling for this contract to
replace the cables for both Unit 2 and Unit 1. Formal approval of this
interim authorization will be sought at the March Trustees’ Meeting, with a
Capital Expenditure Authorization Request to be submitted at the June or
July meeting for replacement of the other two cables.
President Kelley said he was proud to announce that the
Authority received a first-place Quality Vegetation Management (“QVM”)
Project Habitat award from BASF, a major international chemical company.
The award, which has 13 entry categories, is given to entities that create
and sustain a healthy habitat through professional, ethical and responsible
practices. The Authority entered the competition in the Utility-Municipal
category for its 2007 annual maintenance work on the Marcy South 345 kV
transmission line using Lewis Tree Service as its QVM Certified Applicator.
The award from BASF recognized the Authority’s well-maintained and
reestablished right-of-way that protects the environment and the power line
through the establishment of a low-growing plant community, as well as the
Authority’s solid bond with existing landowners for the 2007 and future
work. President Kelley offered his congratulations to Mr. Steven