MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

September 29, 2009

 

 

 

                Subject                                                                                                                               

 

1.             Consent Agenda:                                                                                                                          

a.       Minutes of the Regular Meeting held on July 28, 2009                                                                          

b.       Power for Jobs Program – Extended Benefits, Exhibit - “1b-A”

c.        Extension of Economic Development Plan – Use of  Net Revenues Produced by Sale of Expansion

         Power as Industrial Incentive Awards, Exhibit - “1c-A”

        Resolution

 

d.       Decrease in Westchester County Governmental Customer Rates – Notice of Proposed Rulemaking, Exhibit - “1d-A” &  “1d-B”

        Resolution   

 

e.        Long Island Power Authority – Service Tariff Amendment – Notice of Adoption, Exhibit - “1e-A”

        Resolution

   

 

f.        Hydropower Contracts with Upstate Investor-Owned Utilities for the Benefit of Rural and Domestic                                                                           

Consumers – Transmittal to the Governor, Exhibit - “1f-A”- “1f-F”

Resolution

 

g.       Business Customer Energy Efficiency Audit Program, Exhibit - “1g-A”
Resolution

h.       Marcy/Massena 765 kV Current Transformer Replacement – Capital Expenditure Authorization
and Contract Award 

 

i.         Budget and Financial Plan Information Pursuant to Regulations of the Office of the State Comptroller, Exhibit - “1i-A” & “1i-B”

        Resolution                         

 

j.         Budget Information Pursuant to Section 2801 of the  Public Authorities Law, Exhibit - “1j-A”

        Resolution

    

k.       Procurement (Services) Contracts – Business Units and Facilities – Awards and Extensions, Exhibit -  “1k-A” &  “1k-B” 

        Resolution                                                            

   

 

l.         Authorization to Award Bids and Execute Agreements to Provide Energy Supplies to Governmental Customers

in Southeastern New York

 

m.     Revisions to the Authority’s Code of Conduct, Exhibit -Exhibit - “1m-A” 

                Resolution

 

                                                                                                                       

Discussion Agenda:

2.             Q&A on Reports from:

a.       President and Chief Executive Officer                                                                 

b.       Chief Operating Officer                                                                                         

c.        Chief Financial Officer, Exhibit - “2c-A”

3.             Allocation of 22,725 kW of Hydropower, Exhibit - “3-A”; “3-A-1”        & “3-A-2”

 

4.               Municipal and Rural Electric System Cooperative   63 Customers – Expanded Energy Efficiency and  Weatherization Program  
             

5.             Niagara Power Project – Ice Boom Storage Project – Capital Expenditure Authorization and Site Development

    Contract Award 

6.             Motion to Conduct an Executive Session                                                                               

 

7.             Motion to Reopen Meeting in Open Session                                                                          

 

8.             Resolution – James Yates                                                                                                         

 

9.             Motion to Conduct an Executive Session                                                                              

 

10.          Motion to Resume Meeting in Open Session                                                                          

 

11.          Proposed Schedule of Trustees’ Meetings 2009 – 2010                                                       

 

12.          Next Meeting                                                                                                                                

 

            Closing                                                                          

           


 

Minutes of the Regular Meeting of the Power Authority of the State of New York held at the Hyatt Regency Rochester, 125 Main Street, Rochester, New York, at 11:07 a.m.

Members of the Board present were:

                                Michael J. Townsend, Chairman

                                Jonathan F. Foster, Vice Chairman

                                D. Patrick Curley, Trustee

                                Elise M. Cusack, Trustee

                                Eugene L. Nicandri, Trustee

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Richard M. Kessel                               President and Chief Executive Officer

Gil C. Quiniones                                   Chief Operating Officer

Terryl Brown Clemons                       Executive Vice President and General Counsel

Edward A. Welz                                   Executive Vice President and Chief Engineer – Power Supply

Joan Tursi                                             Acting Executive Vice President – Corporate Support and

                                                                 Administration

Thomas P.  Antenucci                        Senior Vice President – Power Supply Support Services

Bert J. Cunningham                            Senior Vice President – Corporate Communications

Steven J. DeCarlo                                Senior Vice President – Transmission

Paul F. Finnegan                                  Senior Vice President – Public and Governmental Affairs

Donald A. Russak                               Senior Vice President – Corporate Planning and Finance

James F. Pasquale                               Acting Senior Vice President – Marketing and Economic Development

Arnold M. Bellis                                   Vice President and Controller

Paul W. Belnick                                   Vice President – Project Development and Management

Thomas DeJesu                                   Vice President – Public and Governmental Affairs

Patricia Leto                                         Vice President – Procurement

Christine Pritchard                               Vice President – Media Relations and Corporate Communications

Francine Evans                                    Chief of Staff – President’s Office

Victoria Simon                                     Chief of Staff to Chief Operating Officer and Director of Energy Policy

Dennis T. Eccleston                             Chief Information Officer

Joseph W. Gryzlo                                 Chief Ethics and Compliance Officer

Arthur T. Cambouris                           Deputy General Counsel

Karen Delince                                      Corporate Secretary

Lisa A. Cole                                          Director – Financial Planning

Helle Maide                                          Director Key Accounts – EMB Marketing and Economic Development

John L. Canale                                     Project Manager – Power Supply Support Services

Thomas J.  Shust                                 General Manager – Clark Energy Center

Marilyn J. Brown                                 Manager – Market Analysis and Tariff Administration

Caroline G. Garcia                               Manager – Contract Administration – Power Contract and Supply Planning

Edward Hirshenson                             Senior Environmental Specialist – Environmental Programs

Maribel Cruz                                        Business Development and Engineering Facilitator

Angela D. Graves                                 Deputy Corporate Secretary

Mary Jean Frank                                 Associate Corporate Secretary
Lorna M. Johnson                               Assistant Corporate Secretary

Khalil Memon                                      Benefits Assistant – Employee Benefits

Tony Modafferi                                   Executive Director – Municipal Electric Utilities Association

Ken Moore                                           Village of Fairport Administrator and Fairport Electric

 


 

Chairman Townsend presided over the meeting.  Corporate Secretary Delince kept the Minutes.


 

1.                     Consent Agenda

                Chairman Michael Townsend said that the Economic Development Power Allocation Board had recommended that the Authority’s Trustees approve item 1b (Power for Jobs Program – Extended Benefits) at their meeting of September 24, 2009.

Vice Chairman Jonathan Foster said the Consent Agenda each month generally includes several items related to economic development that he feels are presented in a disjointed manner.  He said that at the October Trustees’ Meeting he would like to see something on the agenda that addresses the Authority’s economic development goals, how they relate to the Authority’s mission and the process that is used to make decisions about what economic development projects to pursue.  President Richard Kessel said that his report on his first year at the Authority, which will be presented at the October Trustees’ Meeting, will include a brief section on economic development.  Vice Chairman Foster next asked Mr. Gil Quiniones and Mr. Donald Russak why the two budget-related items had not been considered important enough to be on the Discussion Agenda rather than the Consent Agenda.  Mr. Quiniones said that between now and the December Trustees’ Meeting, staff would be reaching out to the Trustees to discuss the proposed 2010 budget with them.  President Kessel said that in response to concerns expressed by the Trustees last year, staff had started the budget process earlier this year in order to be able to start briefing the Trustees about it in October.  He said that during those briefing sessions the Trustees would be asked for their input.  Mr. Russak said that the two budget-related items on the Consent Agenda were being presented to the Trustees today because of deadlines mandated by the Public Authorities Accountability Act and regulations of the Office of the State Comptroller; he said that the Authority’s final four-year budget projection and detailed 2010 budget would be presented to the Trustees at their December meeting.  President Kessel added that the budget process now incorporates a strategic review and comprehensive approach, as suggested by Vice Chairman Foster.  In response to a question from Trustee Eugene Nicandri, Mr. Russak said that a variance analysis is incorporated in the process as a way of looking back at previous four-year projections.  Mr. Quiniones said that the goal is to create a 2010 business plan and a five-year strategic plan.  Trustee D. Patrick Curley said that he wanted to ensure that the Trustees are consulted far enough in advance of the December Trustees’ Meeting so that their input can be incorporated in the final budget. 

                Chairman Michael Townsend said that while he disagrees with some of the factual analysis in the recently released Citizens Budget Commission (“CBC”) report on the Authority’s economic development power programs, he agrees with many of the report’s conclusions and he encouraged the other Trustees to read the report if they had not done so already.  He referred to page 22 of the report, which states that the Authority’s economic development power programs are not transparent, and asked staff to look at CBC’s recommendations for making the programs’ processes more open and available to the public.  President Kessel said that the Authority will be testifying at one of the legislative hearings being held around the State on the economic development power programs in October or November.  He said that the programs do need to be reformed, especially the Power for Jobs (“PFJ”) program, but that much of that reform is ultimately up to the State Legislature.  President Kessel said that he is hoping that those PFJ reforms will be enacted during the 2010 legislative session.  He also said that while it is very easy to suggest that power be taken away from companies that already have it, such as Alcoa, he is not in favor of that because of the fact that doing so would eliminate 1,000 North Country jobs.  Vice Chairman Foster said that, while the Authority’s mission statement says nothing about economic development, he would not want to see the Empire State Development Corporation (“ESDC”) take over the Authority’s economic development power programs.  Trustee Nicandri said that while he has not yet read the CBC report, he had seen the media coverage of it.  He said that the southeastern part of the State has the capacity to suck all of the air out of the rest of the State, and suggested that some consideration should be given to having Long Island companies, for instance, relocate to other parts of New York State, rather than to other states.

                President Kessel said that he thinks that the hydropower sold to the upstate investor-owned utilities for resale to their rural and domestic customers needs to be allocated instead to economic development programs.  He said that the benefit to residential consumers is not that great, but that the total amount of power used for this program could turn the whole upstate economy around.  In the meantime, however, President Kessel said that the residential customers receiving the power should be made aware of the fact that the power comes from the Power Authority, and suggested that Authority staff work with the utilities on a bill insert that would be included in the customers’ January 2010 bills. 

                Trustee Nicandri said that he thinks it is important for people to realize that the Authority’s customers are the ratepayers of New York State, not the taxpayers, as some politicians claim.  Trustee Curley said, and President Kessel agreed, that the Authority’s power should not be given to ESDC to administer.

                Chairman Townsend thanked staff for the good job they do every month providing the Trustees with a list of the companies that are the subjects of that month’s agenda items in an effort to help the Trustees determine whether they need to recuse themselves from a vote because of a conflict or potential conflict of interest.

 

 

a.       Approval of the Minutes

 

                                The Minutes of the Regular Meeting held on July 28, 2009 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 electricity savings reimbursement rebates for 76 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘1b-A.’  This request is to approve rebate dollars only.  Similar decisions to allow customers to receive extended benefit payments have been made at past Trustees’ Meetings.  These rebates are calculated for historical periods only.  These customers have been recommended to receive such rebates 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 received three-year contracts for PFJ electricity.

 

“The PFJ program originally made 400 megawatts (‘MW’) of power available and was to be phased in over three years.  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 additional power to be allocated under the 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.  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.  Chapter 89 of the Laws of 2007 included provisions extending program benefits until June 30, 2008.  Chapter 59 of the Laws of 2008 included provisions extending the program benefits until June 30, 2009.  Chapter 217 of the Laws of 2009 included provisions extending the program benefits until May 15, 2010.

 

“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, 2009, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 76 businesses listed in ‘1b-A.’  Collectively, these organizations have agreed to retain more than 57,000 jobs in New York State in exchange for the rebates.  The rebate program will be in effect until May 15, 2010.

 

                “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 $6.8 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 Exhibit ‘1b-A’ in the future for other rebate months.

                                               

FISCAL INFORMATION

 

“Funding of rebates for the companies listed in Exhibit ‘1b-A’ is not expected to exceed $6.8 million.  Payments will be made from the Operating Fund.  To date, the Trustees have approved $190 million in rebates.

 

RECOMMENDATION

 

“The Executive Vice President and Chief Financial Officer and the Acting Vice President – Marketing and Economic Development recommend that the Trustees approve the payment of electricity savings reimbursements to the Power for Jobs customers listed in Exhibit ‘1b-A.’

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel 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 $6.8 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 Senior Vice President – Corporate Planning and 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 Acting 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 and General Counsel; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 and General Counsel.

 


 


 


 

c.                    Extension of Economic Development Plan – Use of Net Revenues Produced by Sale of Expansion Power as Industrial Incentive Awards

           

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve an extension of the new Industrial Incentive Award Economic Development Plan (‘Plan’) to provide electric bill discounts to manufacturing companies located in New York state that are at identifiable risk of closure or relocation to another state and to authorize the submission of such Plan to the Economic Development Power Allocation Board (‘EDPAB’).

 

BACKGROUND

 

“Chapter 32 of the Laws of 1987 added the eighth unnumbered paragraph of Section 1005 of the Public Authorities Law (‘PAL’) which directs the Authority to identify net revenues produced by the sale of EP and, further, to identify an amount of such net revenues to be used solely for Industrial Incentive Awards.  These awards are to be made in conformance with a Plan, covering all such net revenues, that is submitted by the Authority to EDPAB and is approved by EDPAB pursuant to Section 188 of the Economic Development Law (‘EDL’).

 

“Net revenues are defined by Section 1005 as any excess of revenues properly allocated to the sales of EP over the costs and expenses properly allocated to such sales.  The Authority is directed in Section 1005 to identify net revenues no less than annually.  Section 188 of the EDL provides that EDPAB is to review each Plan applying the same economic development criteria as those used to evaluate applications for power.  The statute does not specify a definition of Industrial Incentive Award. 

 

“At its May 19, 2009 meeting, the Trustees approved an Economic Development Plan that provides for the use of net revenues from the sale of EP for the calendar years of 2008, 2009 and 2010 to provide electric bill discounts to manufacturing companies located in New York state that are at identifiable risk of closure or relocation to another state.

 

DISCUSSION

 

“The condition of the current economy and the need to drive down operational costs in order to remain competitive, domestically and globally, are key considerations for Computer Associates (‘CA’), located in Islandia on Long Island.  The company, which participates in the Authority’s Economic Development Power and Energy Cost Savings Benefits Programs, is close to a decision whether to keep its global data center in Islandia.

 

“CA has been offered very attractive relocation packages from North Carolina and Texas.  The prevailing electric tariff rates in both these states are more competitive than New York.  While CA has enjoyed the benefits of the Authority’s EDP programs since 1992, in recent years the program has been extended on a year-to-year basis by the Legislature.  This lack of certainty concerning power costs severely inhibits CA’s long-term business operations planning. 

 

“Electricity is a significant cost driver for CA’s Islandia production center and centralized labs.  As the data center represents a substantial portion of the total power consumption, energy costs will be a primary consideration in the decision on whether to maintain and expand the data center in Islandia or relocate out of state. 

 

“It is recommended that the Authority’s Board authorize the use of an Industrial Incentive Award to CA to address the unique, time-sensitive economic challenges of the company.  The recommendation comes after consideration of detailed cost data provided by CA which underscores the potential risk of relocating out of state.  The form of the award will be a cents/kWh price discount applied to a level of electric consumption per year, mutually agreed to by CA and the Authority not exceed 6 MW.  In addition, due to CA’s significant presence and positive impact on the New York and Long Island economies, Authority staff proposes that the term of the company’s Industrial Incentive Award be from May 16, 2010 through December 31, 2016 as detailed in Exhibit ‘1c-A.’  Depending on the all in cost of electricity, the potential award may be up to $3.6 million per year. 

 

“The Industrial Incentive Award will remain in effect as long as the company continues to meet an agreed upon job commitment of 1,807 full time employees in New York.  CA also agrees that it will continue to participate in the existing EDP program and the associated Energy Cost Savings Benefit Program should it be extended beyond May 15, 2010 and apply for any new economic development power program in the future sponsored by the State.  In the event that CA qualifies and participates in a future, yet to be determined, statewide program that offers similar or greater value than the proposed Industrial Incentive Award, the Industrial Incentive Award to CA will be terminated.

 

“In support of this recommendation, EDPAB has also approved a recommendation to extend CA’s EDP allocation for a period co terminus with the Industrial Incentive Award.

 

“It is therefore proposed that the Authority’s Chairman be authorized to submit the Authority’s Plan to EDPAB for the extended period providing for use of 2011 –2016 EP net revenues.  The Authority will report to EDPAB annually on the actual disbursement of these funds.

 

RECOMMENDATION

 

“The Acting Senior Vice President – Marketing and Economic Development recommends that the Trustees authorize the Chairman to submit to the Economic Development Power Allocation Board for approval, an Economic Development Plan that provides for the use of net revenues from the sale of Expansion Power for the extended period calendar years 2011 – 2016 to provide electric bill discounts to manufacturing companies located in New York state that are at identifiable risk of closure or relocation to another state.

 

“It is also recommended that the Trustees approve an Industrial Incentive Award to Computer Associates for an amount up to $3.6 million per year for the period from May 16, 2010 through December 31, 2016 and extend its current Economic Development Plan for the same period.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer 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 approves an Economic Development Plan that provides for the use of net revenues from the sale of Expansion Power through calendar year 2016 to provide electric bill discounts to manufacturing companies located in New York state that are at identifiable risk of closure or relocation to another state; and be it further

 

              RESOLVED, That the Chairman or his designees be, and hereby is, authorized to submit an Economic Development Plan through calendar year 2016 to the Economic Power Allocation Board for review and approval; and be it further

 

                RESOLVED, That the Chairman or his designee be, or hereby is, authorized to execute any and all documents necessary or desirable to effectuate such Economic  Development Plan; and be it further

 

                RESOLVED, That the Authority hereby approves an Industrial Incentive Award to Computer Associates and an extension of Computer Associates’ Economic Development Power allocation 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 Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 all actions and execute and deliver 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.

 

 


 

 

Industrial Incentive Award – (May 16, 2010 – December 31, 2016) 

 

Computer Associates

 

 

·                     Islandia, New York  - 1,807 Jobs

 

·                     LIPA Service Area

 

·                     Up to 6 MW

 

·                     Target Rate – ECSB effective rate

 

·                     Potential   award of up to $3.6 million/year 

 

·                     Award term -  May 16, 2010 – December 31, 2016

 

·                     Computer Associates agrees to participate in any potential extension of ECSB and apply for any new Power Authority economic development power program initiatives in the future.

 

·                     In the event that CA qualifies and participates in a future, yet to be determined, statewide program that offers similar or greater value than the proposed Industrial Incentive Award, the Industrial Incentive Award to CA will be terminated.

 


 

d.                   Decrease in Westchester County Governmental Customer Rates – Notice of Proposed Rulemaking

 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve a Notice of Proposed Rulemaking (‘NOPR’) to decrease the production rates to be charged to the Westchester County Governmental Customers (‘Customers’) in 2010.  Under staff’s proposal, the production rates will decrease by 14.17% compared to 2009 rates.  The Trustees are also requested to direct the Corporate Secretary to file the NOPR with the New York State Department of State for publication in the New York State Register in accordance with the requirements of the State Administrative Procedure Act (‘SAPA’).

 

BACKGROUND

 

“The Authority provides electricity to 104 governmental customers in Westchester County, which includes the County of Westchester, school districts, housing authorities, cities, towns and villages.  The County of Westchester is the largest single customer, accounting for about a third of sales.

 

“The current 2009 rates were adopted by the Trustees at their December 16, 2008 meeting.  The Trustees then approved a 14.43% increase over 2008 rates. 

 

“The basis of providing service is contained in the Supplemental Electricity Agreements (‘Agreements’) with the Customers.  The Agreements were approved by the Trustees at their December 19, 2006 meeting.  Among other things, the Agreements permitted the Authority to modify the Customers’ rates at any time based on a fully supported pro forma cost-of-service (‘COS’) subject to the SAPA process; required the Customers to be full-requirements customers of the Authority through December 31, 2008; permitted the Customers to terminate service on one year’s written notice, but not earlier than January 1, 2009 and reactivated the Energy Charge Adjustment (‘ECA’) mechanism.  All 104 Customers have signed the Agreements.

 

DISCUSSION

 

                “Consistent with the Authority’s past rate-making practices and with the rate-setting process set forth in the Agreements, the proposed decrease is based on a pro forma Cost of Service (‘COS’).  Under the Agreements, the Authority must provide at least 30 days’ notice to the Customers of any proposed decrease and the decrease is subject to their review and comment.  Notification of the rate action was transmitted to the Customers on August 28, 2009.  Subsequent to the approval of this proposed action by the Trustees, the Customers will be mailed the 2010 Preliminary Staff Report containing the pro forma 2010 COS.

 

                “The pro forma Preliminary 2010 COS for the Westchester Customers is summarized in Exhibit ‘1d-A.’  The total COS is $46.8 million and the projected current rate revenues are $54.5 million, resulting in an over-collection of $7.7 million.  The primary cost element, energy purchases, is $39.3 million and accounts for 84% of the total production costs.  Because the Customers have no dedicated generation facility, energy requirements are purchased on the market.  The energy requirements are purchased in New York Independent System Operator Zones ‘G’ (Hudson Valley) and ‘A’ (Western New York).  The projected 2010 prices for these two zones are expected to be lower than the projected 2009 prices.  Partially offsetting this decrease is a rise in projected capacity costs.

 

                “Based on these cost and revenue projections, staff is recommending that base production rates be decreased by 14.17 % over 2009 rates.  Staff proposes to apply the production decrease equally to both the base demand and energy rates.  The current and proposed 2010 rates are contained in Exhibit ‘1d-B.’ 

 

               
 

“After the 45-day statutory comment period, Authority staff will address any concerns that have been raised by the Westchester Customers and interested parties or filed with the Authority, make any necessary changes to the proposed rate decrease and return to the Trustees at their December 15, 2009 meeting to request approval of a rate modification for 2010.

 

FISCAL INFORMATION

 

                “The proposed rate decrease is expected to reduce revenues by $7.7 million from the Westchester Customers for 2010, excluding any charges and credits through the ECA mechanism.

 

RECOMMENDATION

 

                “The Manager – Market Analysis and Tariff Administration recommends that the Trustees authorize the Corporate Secretary to file a Notice of Proposed Rulemaking in the New York State Register for the adoption of a production rate decrease applicable to the Westchester County Governmental Customers.

 

                “It is also recommended that the Acting Senior Vice President – Marketing and Economic Development, or his designee, be authorized to issue written notice of the proposed action to the affected customers under the provisions of the Authority’s tariffs.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance, the Acting Senior Vice President – Marketing and Economic Development, the Vice President – Controller 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 proposes a decrease in the production rates applicable to the Westchester County Governmental Customers as set forth in the foregoing report from the President and Chief Executive Officer; and be it further

 

  RESOLVED, That the Acting Senior Vice President – Marketing and Economic Development, or his designee, be, and hereby is, authorized to issue written notice of this proposed action to the affected customers; and be it further

 

  RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to file such notice as may be required with the New York State Department of State for publication in the New York State Register and to submit such other notice as may be required by statute or regulation concerning the proposed rate decrease and proposed tariff modification; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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.

 

 


 

 

 

 


 


 

e.                Long Island Power Authority – Service Tariff Amendment – Notice of Adoption

 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to approve amendments to the Authority’s current production service tariff applicable to the Long Island Power Authority (‘LIPA’).  Staff recommends that changes to the Authority’s tariff for firm pumped-storage power service from the Authority’s Blenheim-Gilboa Pumped Storage Power Project (‘B-G’) and served under Service Tariff No. 40 (‘ST-40’), attached as Exhibit ‘1e-A,’ become effective on October 1, 2009.

BACKGROUND

“At their meeting of May 19, 2009, the Trustees authorized the Corporate Secretary to file a Notice of Proposed Rulemaking (‘NOPR’) with the New York State Department of State for publication in the New York State Register that the Authority proposed to amend ST-40.  Due to Authority contracts that have long since expired, LIPA is the sole utility customer taking the Authority’s power service under ST-40.

“As staff conveyed to the Trustees at the May meeting, the amendments were needed to reformat the tariff for easier reading and improved organization, clarify the nature of the production service by deleting certain obsolete provisions, include certain standard provisions now applicable to all Authority service tariffs and provide updated terminology.

“The NOPR was published in the New York State Register on June 10, 2009.  In addition, LIPA was notified of the proposed tariff amendments and invited to review the materials and submit comments.  In accordance with the State Administrative Procedure Act (‘SAPA’), this proposed rulemaking was subject to a 45-day comment period.  The public comment period closed on July 27, 2009.

DISCUSSION

“No written comments were received during the statutory comment period.  Staff recommends that the amended service tariff become effective at the start of the first billing period subsequent to the Trustees’ approval, which is October 1, 2009.

 

FISCAL INFORMATION

“Adoption of the proposed revisions to ST-40 will have no financial impact.  The changes proposed are administrative in nature and have no effect on current production rates.

RECOMMENDATION

“The Manager – Market Analysis and Tariff Administration recommends that the attached amended Service Tariff 40 be approved and that the Trustees authorize the Corporate Secretary to file a Notice of Adoption with the New York State Department of State for publication in the New York State Register in accordance with the State Administrative Procedure Act.  The requested effective date of this tariff is October 1, 2009.

“It is also recommended that the Acting Senior Vice President – Marketing and Economic Development, or his designee, be authorized to issue a notice of final action to the affected customers.

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Acting 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 Trustees adopt the amendments to the service tariff applicable to the Long Island Power Authority, as set forth 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, directed to file a Notice of Adoption for publication in the New York State Register in accordance with the State Administrative Procedure Act; and be it further

 

RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to submit such other notice(s) as may be required by statute or regulation concerning the adoption of the service tariff amendment; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 and General Counsel.

 

 

 

f.                    Hydropower Contracts with Upstate Investor- Owned Utilities for the Benefit of Rural and Domestic Consumers – Transmittal to the Governor

                
 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve the attached contract extensions for sale to National Grid (formerly Niagara Mohawk Power Corporation), New York State Electric and Gas Corporation (‘NYSEG’) and Rochester Gas and Electric Corporation (‘RGE’) (hereinafter referred to collectively as the ‘Utilities’) of a total of 455 MW of firm and 360 MW of firm peaking hydropower and authorize their transmittal to the Governor for his approval.  The proposed contract extensions with the Utilities are attached as Exhibit ‘1f-A’ (National Grid), Exhibit ‘1f-B’ (NYSEG) and Exhibit ‘1f-C’ (RGE), respectively.

 

BACKGROUND

 

                “The Utilities had been receiving firm power from the St. Lawrence/FDR and Niagara Power Projects and firm peaking hydropower from the Niagara Project for resale to rural and domestic consumers under contracts signed in 1990 that expired on August 31, 2007 (the ‘1990 Hydro Contracts’).  The power is purchased at the cost-based hydropower rate and the benefits are passed on to the Utilities’ residential and small farm customers (the rural and domestic, or ‘R&D,’ customers) without markup, under Public Service Commission tariffs.

 

“At their meeting of July 31, 2007, the Trustees approved an extension of the Hydro Contracts (the ‘2007 Contract Extensions’).  The 2007 Contract Extensions expired on June 30, 2008.  At their meeting of April 29, 2008, the Trustees authorized the holding of a public hearing, pursuant to Section 1009 of the Public Authorities Law, on the 2008 Contract Extensions.  The public hearing was held on June 4, 2008 at Syracuse City Hall.  At their meeting of June 24, 2008, the Trustees approved transmitting the 2008 Contract Extensions to the Governor with the recommendation that they be approved.  The Governor approved the 2008 Contract Extensions on September 8, 2008.  The 2008 Contract Extensions will expire on December 31, 2009. 

 

                “Chapter 59 of the Laws of 2006 (Part U) authorized the creation by the Governor of a ‘Temporary State Commission on the Future of New York State Power Programs for Economic Development’ (‘Commission’).  The charge to the Commission was to recommend to the Governor and the Legislature on or before December 1, 2006 ‘whether to continue, modify, expand or replace the state’s economic development power programs, including but not limited to the power for jobs program and the energy cost savings benefit program. . . .’ 

               

“On December 1, 2006, the Commission issued its report, which included an array of findings and recommendations.  A key recommendation of the report was that, among other things, hydropower now sold to the Utilities be ‘redeployed’ for economic development purposes.

 

DISCUSSION

 

                “In 2007 and 2008, the Power for Jobs (‘PFJ’) and Energy Cost Savings Benefits (‘ECSB’) programs were extended through June 30, 2008 and June 30, 2009, respectively, with the understanding that a reformation of the State’s economic development power programs was necessary to create a long-term power resource with price stability for business, whether based on the recommendations of the Commission or some other approach.  In July 2009, the PFJ and ECSB programs were extended through May 15, 2010 by Chapter 217 of the Laws of 2009. 

 

                “Since the 2008 Contract Extensions are scheduled to expire on December 31, 2009, new contract extensions with the Utilities are necessary so that the benefits of low-cost hydropower can continue to flow to the Utilities’ R&D customers until such time as new legislation is enacted that redeploys this hydropower for other purposes.  The new contract extensions (the ‘2009 Contract Extensions’) have a provision that will permit service to continue on a month-to- month basis until the Governor approves them.  Should the Governor reject the 2009 Contract Extensions, they will terminate on the last day of the month following the month during which the Governor disapproved them.

 

“The 2009 Contract Extensions would continue the sale of firm and firm peaking hydropower to the Utilities in the amounts approved by the Trustees at their June 24, 2008 meeting, specifically, for National Grid, 189 MW of firm and 175 MW of firm peaking; for NYSEG, 167 MW of firm and 150 MW of firm peaking and for RGE, 99 MW of firm and 35 MW of firm peaking.  The 2009 Contract Extensions would have a term of 12 months to December 31, 2010, subject to earlier termination by the Authority on 30 days’ advance written notice.

 

                “In addition to the termination provisions specified above, the Authority may reduce or terminate service if it is determined to be necessary to comply with any ruling, order or decision by a regulatory or judicial body or the Trustees relating to hydropower and energy allocated under the proposed contracts.                        

 

“At their meeting of July 28, 2009, the Trustees authorized the holding of a public hearing, pursuant to Section 1009 of the Public Authorities Law, on the 2009 Contract Extensions.  Copies of the proposed form of the contracts were transmitted to the Governor and the leaders of the State Legislature.  In accordance with Section 1009, notice of such public hearing was published once each week for at least 30 days in at least six newspapers throughout the State.  During that period, copies of the form of the contracts were made available for public inspection in the offices of the Authority and at other places throughout the State designated by the Authority, as well as on the Authority’s website.

 

“Public hearings were held on September 1, 2009 at the Niagara Power Project and on September 2, 2009 at Syracuse City Hall.  Over the two-day period, four sessions were held.  The final transcripts of the hearings are attached hereto as Exhibits ‘1f-D,’ ‘1f-E’ and ‘1f-F.’  Staff has reviewed the transcripts of the hearings, which include the 12 oral and 15 written statements submitted for inclusion in the record.

 

“The three speakers at the Niagara Power Project hearing were:  Hadley Horrigan, Vice President Public Affairs, Buffalo Niagara Partnership; John Cunningham, Niagara County resident and Senator George Maziarz, New York State Senate.

 

“The nine speakers at the Syracuse hearing were:  Brian O’Shaughnessy, Chairman Revere Copper Products, Inc.; Michael Matthis, Camillus, NY resident; Thomas Slocum, Citizen Action Program member, UAW Local 2367, Revere Copper Products, Inc.; Mike Bambury, Citizen Action Program Chairman, UAW Local 2367, Revere Copper Products, Inc.; Ron Edwards, Manager, Engineering and Energy Conservation, Revere Copper Products, Inc.; Karyn Burns, Director, Communications and Government Relations, Manufacturers Association of Central New York (‘MACNY’); Kenneth Pokalsky, Senior Director, Government Affairs, The Business Council of New York State; Michael Costello, Crucible Specialty Metals/Crucible Materials Corporation and Karyn Burns for Air Products and Chemicals.

 

“Ten of the speakers and 14 of the written statements represented organizations that currently receive Authority power through one or more of its economic development programs.  All were in unison in their expressed concern for the future of the Authority’s economic development programs, detailing how challenging it is for them to do business in New York State and how critical the Authority’s programs are to controlling some of their costs.  All outlined the steps they have taken to control their costs, expressed frustration with New York’s high electricity rates and emphasized how urgent it is for the State to do something for the long term in order to support economic development and the creation and retention of jobs in New York State.  They believe that the hydropower now being sold to the three upstate IOUs should be part of that solution.  Annual program renewals are ineffective for planning purposes, and the Authority and the Legislature should work together to provide for both long-term program renewals and long-term contracts between the Authority and hydropower recipients.  Four of the speakers represented business advocacy groups:  Hadley Horrigan – Buffalo Niagara Partnership; Brian O’Shaughnessy – Consumers for Affordable and Sustainable Energy (‘CASE’); Karyn Burns – MACNY and Kenneth Pokalsky – The Business Council of New York State.  

 

“The County of Westchester Public Utility Service Agency (‘COWPUSA’) and Suffolk County Electrical Agency are recipients of Economic Development Power (‘EDP’) and PFJ power.  Both submitted written statements in lieu of personal appearances in support of the one-year IOU contract extensions to December 2010.  They request the IOU hydro allocations become the long-term supply solution for the PFJ and ECSB programs.  The rationale provided was as follows: (1) the benefit to the upstate residential consumer is negligible; (2) the power is better suited for statewide economic development purposes; (3) electricity plays a significant role in downstate manufacturers’ ability to compete with out-of state companies; (4) this will allow downstate, as well as upstate, companies the ability to compete and (5) a longer-term solution compared to the year-by-year extension would better serve New York State.

 

“New York State Senator Maziarz and the two residential customer speakers support the position that the sale to the upstate IOUs and use of the Niagara and St. Lawrence power should primarily benefit the residential ‘R&D’ customers and that the sale to and use by industry should be a secondary purpose.

 

“While the parties presenting oral or written statements differed on the ultimate disposition of the 455 MW of hydropower, there were no objections to the proposed contract extensions through December 2010.

 

FISCAL INFORMATION

 

                “The 2009 Contract Extensions provide that the Utilities continue to pay for hydropower at the same rates they are currently charged, that is, determined in accordance with the ratemaking principles incorporated in the Auer Settlement and subsequent rate settlements.  Accordingly, there will be no fiscal impact associated with these contract extensions.

 

RECOMMENDATION

 

“The Manager – Contract Administration recommends that the Trustees authorize the transmittal of the 2009 Contract Extensions to the Governor for his approval.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Energy Marketing and Corporate Affairs, the Acting 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 contract extensions for the sale of hydroelectric power and energy generated by the Authority for sale to National Grid, New York State Electric and Gas Corporation and Rochester Gas and Electric Corporation are in the public interest and should be forwarded with a recommendation that they be approved, along with the record of the public hearings thereon, to the Governor, the Speaker of the Assembly, the Minority Leader of the Assembly, the Chairman of the Assembly Ways and Means Committee, the Temporary President of the Senate, the Minority Leader of the Senate and the Chairman of the Senate Finance Committee; and be it further

 

RESOLVED, That the Chairman and the Corporate Secretary be authorized and directed to execute such contract extensions in the name of and on behalf of the Authority after the agreements have been approved by the Governor; and be it further

 

RESOLVED, That the Acting Senior Vice President – Marketing and Economic Development, or his designee, be, and hereby is, authorized, subject to the approval of the form thereof by the Chief Operating Officer and the Executive Vice President and General Counsel, to negotiate and execute any and all documents necessary or desirable to implement the contract extensions with National Grid, New York State Electric and Gas Corporation and Rochester Gas and Electric Corporation as set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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.

 


 

 

2009 Amendment to and Extension of Service Agreement of Niagara Mohawk Power Corporation under Service Tariff No. 41 and Service Tariff No. 42

 

Niagara Mohawk Power Corporation, d/b/a National Grid (“Company”) and the New York Power Authority (“Authority”) are parties to an agreement dated February 22, 1989 under which the Authority sells certain quantities of hydroelectric power and energy from Authority’s Niagara and St. Lawrence Projects to Company for resale to its rural and residential consumers (the “Service Agreement under ST No. 41 and ST No. 42”).  Company and Authority have previously extended the Service Agreement under ST No. 41 and ST No. 42 to June 30, 2008 by letter agreement dated August 30, 2007 (the “2007 Amendment”).

 

Company and Authority agree to terminate the 2007 Amendment effective July 1, 2008, and further extend and modify certain terms of the Company’s Service Agreement under ST No. 41 and ST No. 42 as follows:

 

1)    The amount of Firm Hydroelectric Power and Energy allocated to Company under Service Tariff No. 41 will be reduced from 230 MW to 189 MW.  The Firm Peaking Power allocation of 175 MW under Service Tariff No. 42 will remain unchanged.

 

2)    Article E – Rates.  The current text is deleted in its entirety and is replaced with the following text.

 

“The rates charged by the Authority under this Agreement shall be established in accordance with this Article. 

 

The Authority shall charge and Company shall pay the preference power rates adopted by the Authority on April 24, 2007, as such rates may be revised from time to time.  Company waives any and all objections, suits, appeals or other challenges to the preference power rates adopted by the Authority on April 24, 2007, except as otherwise provided for below.

 

Company waives any challenges to any of the following methodologies and principles used by the Authority to set future preference power rates, numbers (ii) through (vii) as set forth in the “January 2003 Report on Hydroelectric Production Rates” as modified by the April 2003 “Staff Analysis of Public Comments and Recommendations”:

 

 (i)     The principles set forth in the March 5, 1986 Settlement Agreement settling Auer v. Dyson, No. 81-124 (Sup. Ct. Oswego Co.), Auer v. Power Authority, Index No. 11999-84 (Sup. Ct. N.Y. Co.) and Delaware County Electric Cooperative, Inc. v. Power Authority, 82 Civ. 7256 (S.D.N.Y.) (the “Auer Settlement”).

(ii)     Recovery of capital costs using Trended Original Cost and Original Cost methodologies.

 

(iii)    Treatment of sales to third parties, including the New York Independent System Operator.

 

(iv)    Allocation of Indirect Overheads.

 

(v)       Melding of costs of the Niagara Power Project and St. Lawrence-FDR Power Project for ratemaking.

 

(vi)    Post-employment benefits other than pensions (i.e., retiree health benefits).

 

(vii)    Rate Stabilization Reserve (RSR) methodology. 

 

In the event the Authority ceases to employ any of the methodologies and principles enumerated above, the Company shall have the right to take any position whatsoever with respect to such methodology or principle, but shall not have the right to challenge any of the remaining methodologies and principles that continue to be employed by the Authority.’

 

3)    Article F – Transmission.  The current text is deleted in its entirety and is replaced with the following text.

 

“In accordance with the terms of the existing transmission service agreement, which by its terms will expire on August 31, 2007, Company will cease taking transmission service from Authority and will instead take transmission service under the New York Independent System Operator's ("NYISO") Open Access Transmission Tariff.  Company agrees to settle any outstanding transmission charges that may apply prior to September 1, 2007 including any subsequent NYISO true up settlements.”

 

4)    Article G – Notification.  In the contact address for Authority replace “10 Columbus Circle, New York, NY 10019” with 123 Main Street, White Plains, NY 10601”.

 

5)    Article K -  Restoration of Withdrawn Power and/or Energy is deleted in its entirety.

 

6)    Article L – Term of Service, is revised to read as follows:

 

”Service under this contract shall commence at 12:01 A.M. on January 1, 1990 and shall continue unless cancelled as provided for in the “Withdrawals of Power and/or Energy” or the “Cancellation or Reduction” provisions until December 31, 2010, subject to earlier termination by the Authority with respect to any or all of the quantities of power and energy provided hereunder on at least thirty (30) days’ prior written notice to Company.”

 

7)    Article M – Availability of Energy – Firm and Firm Peaking Hydroelectric Power Service.  In the third paragraph, line 1, starting with the words  “In the event that . .” through “. . . minimize the impact of such reductions.” on line 10, replace with the following:

 

“The Authority will have the right to reduce on a pro rata basis the amount of energy provided to Company under Service Tariffs Nos. 41 and 42 if such reductions are necessary due to low flow (i.e. hydrologic) conditions at the Authority’s Niagara and St. Lawrence-FDR hydroelectric generating stations.  In the event that hydrologic conditions require the Authority to reduce the amount of energy provided to Company, reductions as a percentage of the otherwise required energy deliveries will be the same for all firm Niagara and St. Lawrence-FDR Project customers.  The Authority shall be under no obligation to deliver and will not deliver any such curtailed energy to Company in later billing periods.  The offer of Energy for delivery shall fulfill Authority’s obligations for purposes of this Provision whether or not the Energy is taken by Company.  The Authority shall provide reasonable notice to Company of any condition or activities that could result, or have resulted, in low flow conditions consistent with the notice provided to other similarly affected customers.”

 

8)    This amendment shall be referred to as the “2009 Amendment to the Company’s Service Agreement under ST No. 41 and ST No. 42”.

 

9)    Continuation of service under this 2009 Amendment to the Company’s Service Agreement under ST No. 41 and ST No. 42 shall be subject to ultimate approval by the Governor of the State of New York pursuant to Section 1009 of the Power Authority Act.  If the Governor does not approve this amendment, service will cease on the last day of the month following the month during which the Governor disapproved these Contract Extensions.

 

Except as expressly provided in this 2009 Amendment to the Company’s Service Agreement under ST No. 41 and ST No. 42, the Service Agreement under ST No. 41 and ST No. 42 shall remain unchanged and in full force and effect.

 

This 2009 Amendment to the Company’s Service Agreement under ST No. 41 and ST No. 42 shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts and to be performed in such state, without regard to conflict of laws principles.

 

This 2009 Amendment to the Company’s Service Agreement under ST No. 41 and ST No. 42 may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signature thereto and hereto were upon the same instrument.

 

Upon approval of the Governor of the State of New York pursuant to Section 1009 of the Public Authorities Law, and upon execution by the Chairman of the Authority, this 2009 Amendment shall come into full force and effect, provided however that pending such gubernatorial approval and execution this 2009 Amendment shall take effect upon the expiration of the 2008 Amendment and continue on a month to month basis.

 

If the foregoing changes are acceptable to your organization, please so indicate by executing both copies of this amendment and returning them to us.

 

AGREED:

 

Niagara Mohawk Power Corporation d/b/a National Grid

 

By:      _________________________

 

Title:    _________________________

 

Date:   _________________________

 

Power Authority of the State of New York

 

By:      _________________________

           

Richard M. Kessel

President and Chief Executive Officer

 

Date:   _________________________

 

ACCEPTED:

 

By:      _________________________

 

            Michael J. Townsend

            Chairman

 

Date:  __________________________

 


 

2009 Amendment to 1990 Hydropower Contract

 

New York State Electric & Gas Corporation (“Company”) and the New York Power Authority (“Authority”) are parties to an agreement dated February 22, 1989 under which the Authority sells certain quantities of hydroelectric power and energy from Authority’s Niagara and St. Lawrence Projects to Company for resale to its rural and residential consumers (the “1990 Hydropower Contract’).  Company and Authority have previously extended the 1990 Hydropower Contract to June 30, 2008 by letter agreement dated August 29, 2007 (the “2007 Amendment”).

 

Authority, Rochester Gas and Electric Corporation (“RGE”) and Company are also parties to a letter agreement dated February 14, 2008 (“February 14, 2008 Letter Agreement”).  The February 14, 2008 Letter Agreement modified Article D – Regulation of Rates and Charges as it pertained to the calculation of the monthly savings realized by the customers of Company and RGE from the purchase of Authority hydropower. 

 

Company and Authority agree to terminate the 2007 Amendment effective July 1, 2008, and further extend and modify certain terms of 1990 Hydropower Contract as follows:

 

1)    The amount of Firm Hydroelectric Power and Energy allocated to Company under Service Tariff No. 41 will be reduced from 203 MW to 167 MW.  The Firm Peaking Power allocation of 150 MW under Service Tariff No. 42 will remain unchanged.

 

2)    Article E – Rates.  The current text is deleted in its entirety and is replaced with the following text.

 

“The rates charged by the Authority under this Agreement shall be established in accordance with this Article. 

 

The Authority shall charge and Company shall pay the preference power rates adopted by the Authority on April 24, 2007, as such rates may be revised from time to time.  Company waives any and all objections, suits, appeals or other challenges to the preference power rates adopted by the Authority on April 24, 2007, except as otherwise provided for below.

 

Company waives any challenges to any of the following methodologies and principles used by the Authority to set future preference power rates, numbers (ii) through (vii) as set forth in the “January 2003 Report on Hydroelectric Production Rates” as modified by the April 2003 “Staff Analysis of Public Comments and Recommendations”:

 

 (i)     The principles set forth in the March 5, 1986 Settlement Agreement settling Auer v. Dyson, No. 81-124 (Sup. Ct. Oswego Co.), Auer v. Power Authority, Index No. 11999-84 (Sup. Ct. N.Y. Co.) and Delaware County Electric Cooperative, Inc. v. Power Authority, 82 Civ. 7256 (S.D.N.Y.) (the “Auer Settlement”).

 

(ii)     Recovery of capital costs using Trended Original Cost and Original Cost methodologies.

 

(iii)    Treatment of sales to third parties, including the New York Independent System Operator.

 

(iv)    Allocation of Indirect Overheads.

 

(vi)     Melding of costs of the Niagara Power Project and St. Lawrence-FDR Power Project for ratemaking.

 

(vi)    Post-employment benefits other than pensions (i.e., retiree health benefits).

 

(viii)   Rate Stabilization Reserve (RSR) methodology. 

 

In the event the Authority ceases to employ any of the methodologies and principles enumerated above, the Company shall have the right to take any position whatsoever with respect to such methodology or principle, but shall not have the right to challenge any of the remaining methodologies and principles that continue to be employed by the Authority.’

 

3)    Article F – Transmission.  The current text is deleted in its entirety and is replaced with the following text.

 

“In accordance with the terms of the existing transmission service agreement, which by its terms will expire on August 31, 2007, Company will cease taking transmission service from Authority and will instead take transmission service under the New York Independent System Operator's ("NYISO") Open Access Transmission Tariff.  Company agrees to settle any outstanding transmission charges that may apply prior to September 1, 2007 including any subsequent NYISO true up settlements.”

 

4)    Article G – Notification.  In the contact address for Authority replace “10 Columbus Circle, New York, NY 10019” with 123 Main Street, White Plains, NY 10601”.  In the contact address for Company, first and second lines, replace “Senior Vice President Electric System Operations and Engineering” with, “Dave Kimiecik, Vice President, Energy Supply”.  On lines four and five, replace “4500 Vestal Parkway, Binghamton, New York, 13903” with “18 Link Drive, P.O. Box 5224, Binghamton, New York 13902-5224”.

 

5)    Article K – Restoration of Withdrawn Power and/or Energy is deleted in its entirety.

 

6)    Article L – Term of Service, is revised to read as follows:

 

”Service under this contract shall commence at 12:01 A.M. on January 1, 1990 and shall continue unless cancelled as provided for in the “Withdrawals of Power and/or Energy” or the “Cancellation or Reduction” provisions until December 31, 2010, subject to earlier termination by the Authority with respect to any or all of the quantities of power and energy provided hereunder on at least thirty (30) days’ prior written notice to Company.”

 

7)    Article M – Availability of Energy – Firm and Firm Peaking Hydroelectric Power Service.  In the third paragraph, line 1, starting with the words  “In the event that . .” through “. . . minimize the impact of such reductions.” on line 10, replace with the following:

 

“The Authority will have the right to reduce on a pro rata basis the amount of energy provided to Company under Service Tariffs Nos. 41 and 42 if such reductions are necessary due to low flow (i.e. hydrologic) conditions at the Authority’s Niagara and St. Lawrence-FDR hydroelectric generating stations.  In the event that hydrologic conditions require the Authority to reduce the amount of energy provided to Company, reductions as a percentage of the otherwise required energy deliveries will be the same for all firm Niagara and St. Lawrence-FDR Project customers.  The Authority shall be under no obligation to deliver and will not deliver any such curtailed energy to Company in later billing periods.  The offer of Energy for delivery shall fulfill Authority’s obligations for purposes of this Provision whether or not the Energy is taken by Company.  The Authority shall provide reasonable notice to Company of any condition or activities that could result, or have resulted, in low flow conditions consistent with the notice provided to other similarly affected customers.”

 

8)    This amendment shall be referred to as the “2009 Amendment to the 1990 Hydropower Contract”.

 

9)    Continuation of service under this 2009 Amendment to the 1990 Hydropower Contract shall be subject to ultimate approval by the Governor of the State of New York pursuant to Section 1009 of the Power Authority Act.  If the Governor does not approve this amendment, service will cease on the last day of the month following the month during which the Governor disapproved these Contract Extensions.

 

Except as expressly provided in this 2009 Amendment to the 1990 Hydropower Contract, the 1990 Hydropower Contract as modified by the February 14, 2008 Letter Agreement shall remain unchanged and in full force and effect.

 

This 2009 Amendment to the 1990 Hydropower Contract shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts and to be performed in such state, without regard to conflict of laws principles.

 

This 2009 Amendment to the 1990 Hydropower Contract may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signature thereto and hereto were upon the same instrument.

 

Upon approval of the Governor of the State of New York pursuant to Section 1009 of the Public Authorities Law, and upon execution by the Chairman of the Authority, this 2009 Amendment shall come into full force and effect, provided however that pending such gubernatorial approval and execution this 2009 Amendment shall take effect upon the expiration of the 2008 Amendment and continue on a month to month basis.

 

If the foregoing changes are acceptable to your organization, please so indicate by executing both copies of this amendment and returning them to us.

 

AGREED:

 

New York State Electric & Gas Corporation

 

By:      _________________________

 

Title:    _________________________

 

Date:   _________________________

 

Power Authority of the State of New York

 

By:      _________________________

Richard M. Kessel

President and Chief Executive Officer

 

Date:   _________________________

 

ACCEPTED:

 

By:      _________________________

            Michael J. Townsend

            Chairman

 

Date:  __________________________

 


 

2009 Amendment to 1990 Hydropower Contract

 

Rochester Gas and Electric Corporation (“Company”) and the New York Power Authority (“Authority”) are parties to an agreement dated February 22, 1989 under which the Authority sells certain quantities of hydroelectric power and energy from Authority’s Niagara and St. Lawrence Projects to Company for resale to its rural and residential consumers (the “1990 Hydropower Contract”).  Company and Authority have previously extended the 1990 Hydropower Contract to June 30, 2008 by letter agreement dated August 29, 2007 (the “2007 Amendment”).

 

Authority, New York State Electric & Gas Corporation (“NYSEG”) and Company are also parties to a letter agreement dated February 14, 2008 (“February 14, 2008 Letter Agreement”).  The February 14, 2008 Letter Agreement modified Article D – Regulation of Rates and Charges as it pertained to the calculation of the monthly savings realized by the customers of Company and NYSEG from the purchase of Authority hydropower. 

 

Company and Authority agree to terminate the 2007 Amendment effective July 1, 2008, and further extend and modify certain terms of 1990 Hydropower Contract as follows:

 

1)    The amount of Firm Hydroelectric Power and Energy allocated to Company under Service Tariff No. 41 will be reduced from 120 MW to 99 MW.  The Firm Peaking Power allocation of 35 MW under Service Tariff No. 42 will remain unchanged.

 

2)    Article E – Rates.  The current text is deleted in its entirety and is replaced with the following text.

 

“The rates charged by the Authority under this Agreement shall be established in accordance with this Article. 

 

The Authority shall charge and Company shall pay the preference power rates adopted by the Authority on April 24, 2007, as such rates may be revised from time to time.  Company waives any and all objections, suits, appeals or other challenges to the preference power rates adopted by the Authority on April 24, 2007, except as otherwise provided for below.

 

Company waives any challenges to any of the following methodologies and principles used by the Authority to set future preference power rates, numbers (ii) through (vii) as set forth in the “January 2003 Report on Hydroelectric Production Rates” as modified by the April 2003 “Staff Analysis of Public Comments and Recommendations”:

 

 (i)     The principles set forth in the March 5, 1986 Settlement Agreement settling Auer v. Dyson, No. 81-124 (Sup. Ct. Oswego Co.), Auer v. Power Authority, Index No. 11999-84 (Sup. Ct. N.Y. Co.) and Delaware County Electric Cooperative, Inc. v. Power Authority, 82 Civ. 7256 (S.D.N.Y.) (the “Auer Settlement”).

 

(ii)     Recovery of capital costs using Trended Original Cost and Original Cost methodologies.

 

(iii)    Treatment of sales to third parties, including the New York Independent System Operator.

 

(iv)    Allocation of Indirect Overheads.

 

(vii)    Melding of costs of the Niagara Power Project and St. Lawrence-FDR Power Project for ratemaking.

 

(vi)    Post-employment benefits other than pensions (i.e., retiree health benefits).

 

(ix)     Rate Stabilization Reserve (RSR) methodology. 

 

In the event the Authority ceases to employ any of the methodologies and principles enumerated above, the Company shall have the right to take any position whatsoever with respect to such methodology or principle, but shall not have the right to challenge any of the remaining methodologies and principles that continue to be employed by the Authority.’

 

3)    Article F – Transmission.  The current text is deleted in its entirety and is replaced with the following text.

 

“In accordance with the terms of the existing transmission service agreement, which by its terms will expire on August 31, 2007, Company will cease taking transmission service from Authority and will instead take transmission service under the New York Independent System Operator's ("NYISO") Open Access Transmission Tariff.  Company agrees to settle any outstanding transmission charges that may apply prior to September 1, 2007 including any subsequent NYISO true up settlements.”

 

4)    Article G – Notification.  In the contact address for Authority replace “10 Columbus Circle, New York, NY 10019” with 123 Main Street, White Plains, NY 10601”.  For Company, delete the current reference in its entirety and replace with the following “Dave Kimiecik, Vice President, Energy Supply, New York State Electric & Gas Corporation, 18 Link Drive, P.O. Box 5224, Binghamton, New York 13902-5224”.

 

5)    Article K - Restoration of Withdrawn Power and/or Energy is deleted in its entirety.

 

6)    Article L – Term of Service, is revised to read as follows:

 

”Service under this contract shall commence at 12:01 A.M. on January 1, 1990 and shall continue unless cancelled as provided for in the “Withdrawals of Power and/or Energy” or the “Cancellation or Reduction” provisions until December 31, 2010, subject to earlier termination by the Authority with respect to any or all of the quantities of power and energy provided hereunder on at least thirty (30) days’ prior written notice to Company.”

 

7)    Article M – Availability of Energy – Firm and Firm Peaking Hydroelectric Power Service.  In the third paragraph, line 1, starting with the words  “In the event that . .” through “. . . minimize the impact of such reductions.” on line 10, replace with the following:

 

“The Authority will have the right to reduce on a pro rata basis the amount of energy provided to Company under Service Tariffs Nos. 41 and 42 if such reductions are necessary due to low flow (i.e. hydrologic) conditions at the Authority’s Niagara and St. Lawrence-FDR hydroelectric generating stations.  In the event that hydrologic conditions require the Authority to reduce the amount of energy provided to Company, reductions as a percentage of the otherwise required energy deliveries will be the same for all firm Niagara and St. Lawrence-FDR Project customers.  The Authority shall be under no obligation to deliver and will not deliver any such curtailed energy to Company in later billing periods.  The offer of Energy for delivery shall fulfill Authority’s obligations for purposes of this Provision whether or not the Energy is taken by Company.  The Authority shall provide reasonable notice to Company of any condition or activities that could result, or have resulted, in low flow conditions consistent with the notice provided to other similarly affected customers.”

 

8)    This amendment shall be referred to as the “2009 Amendment to the 1990 Hydropower Contract”.

 

9)    Continuation of service under this 2009 Amendment to the 1990 Hydropower Contract shall be subject to ultimate approval by the Governor of the State of New York pursuant to Section 1009 of the Power Authority Act.  If the Governor does not approve this amendment, service will cease on the last day of the month following the month during which the Governor disapproved these Contract Extensions.

 

Except as expressly provided in this 2009 Amendment to the 1990 Hydropower Contract, the 1990 Hydropower Contract as modified by the February 14, 2008 Letter Agreement shall remain unchanged and in full force and effect.

 

This 2009 Amendment to the 1990 Hydropower Contract shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts and to be performed in such state, without regard to conflict of laws principles.

 

This 2009 Amendment to the 1990 Hydropower Contract may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signature thereto and hereto were upon the same instrument.

 

Upon approval of the Governor of the State of New York pursuant to Section 1009 of the Public Authorities Law, and upon execution by the Chairman of the Authority, this 2009 Amendment shall come into full force and effect, provided however that pending such gubernatorial approval and execution this 2009 Amendment shall take effect upon the expiration of the 2008 Amendment and continue on a month to month basis.

 

If the foregoing changes are acceptable to your organization, please so indicate by executing both copies of this amendment and returning them to us.

 

AGREED:

 

Rochester Gas and Electric Corporation

 

By:      _________________________

 

Title:    _________________________

 

Date:   _________________________

 

Power Authority of the State of New York

 

By:      _________________________

           

Richard M. Kessel

President and Chief Executive Officer

 

Date:   _________________________

 

ACCEPTED:

 

By:      _________________________

 

            Michael J. Townsend

            Chairman

 

Date:  __________________________

 


 

g.                   Business Customer Energy Efficiency Audit Program

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize up to $2 million to fund an Energy Efficiency Audit Program (‘Audit Program’) for those entities that receive low-cost power from the Authority under its Power for Jobs (‘PFJ’), Economic Development, High Load Factor, Municipal Distribution Agency, Expansion Power, Replacement Power and Preservation Power programs (‘Business Customers’).  This request is in response to recently enacted legislation extending the PFJ and Energy Cost Savings Benefit (‘ECSB’) programs through May 15, 2010.  Included in such legislation is a new provision aimed at promoting the conservation and efficient use of electricity by directing the Authority to undertake energy audits in connection with the Business Customers.

 

BACKGROUND

 

                “Since the 1980s, the Authority, through its Statewide Energy Services Program, has offered various types of energy services and clean energy technology programs to participants throughout the State to help them lower their energy usage and/or achieve cleaner and more energy-efficient use of energy and natural resources.  The Authority’s turnkey programs generally commence with an audit to identify opportunities for implementing energy efficiency measures and the potential savings that program participants may realize.

 

“On July 11, 2009, Governor Paterson signed into law Chapter 217 of the Laws of 2009, which continued the PFJ and ECSB programs (Exhibit ‘1g-A’).  The legislation includes a requirement that the Authority undertake energy audits for a representative sample of its Business Customers.  The audits will assess a recipient’s electricity use to determine cost-effective measures that could be implemented to reduce energy costs and energy use or to improve the efficiency of buildings, building systems, equipment, processes or operations.

 

DISCUSSION

 

                “To implement the Audit Program, staff will develop a representative audit sample that takes into consideration the program of enrollment, type of business, geography for statewide programs and allocation size.  As allowed by the legislation, staff will also include in the sample Business Customer energy audits that have been performed up to five years prior to the effective date of this law.

 

“Based on these criteria, it is expected that the Authority will offer to perform up to 60 audits for eligible Business Customers. 

 

“The audits will be funded by the Authority as deemed feasible and advisable by the Trustees.  However, the legislation authorizes the Authority to apply for funding from any other program that pays all or some of the costs of such audits and provides that the Authority is entitled to receive such funding as if the recipient of low-cost power had applied for the funding directly.

 

                “By February 28, 2010, the Authority must complete and submit a report on the Audit Program to the Governor, the Speaker of the Assembly, the President of the Senate, the Minority Leader of the Senate, the Minority Leader of the Assembly, the Chair of the Senate Finance Committee, the Chair of the Assembly Ways and Means Committee, the Chair of the Assembly Energy Committee, the Chair of the Senate Energy and Telecommunications Committee and the State Comptroller.

 

FISCAL INFORMATION

 

                “Funding for the Audit Program will be provided primarily from the Operating Fund.  The total cost of the Audit Program is not expected to exceed $2 million.  Funding will be sought from other programs to help offset total program costs.

 

RECOMMENDATION

 

                “The Senior Vice President – Energy Services and Technology and the Acting Senior Vice President – Marketing and Economic Development recommend that the Trustees approve the Energy Audit Program for those eligible entities that receive low-cost power from the Authority under its Power for Jobs, Economic Development, High Load Factor, Municipal Distribution Agency, Expansion Power, Replacement Power and Preservation Power programs. 

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer and I concur in the recommendation.”

 

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

 

RESOLVED, That the Trustees hereby authorize the inclusion of an Energy Audit Program in the Statewide Energy Services Program for customers that receive low-cost power from the Authority under its Power for Jobs, Economic Development, High Load Factor, Municipal Distribution Agency, Expansion Power, Replacement Power and Preservation Power programs; and be it further 

 

RESOLVED, That Operating Fund monies be used to fund the Energy Audit Program in the amount and for the purpose listed below:

 

Expenditure Authorization

Operating Funds                                            (not to exceed)

 

Energy Audit Program                                    $2 million

 

                                                TOTAL                 $2 million

               

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 and General Counsel.


 

h.                   Marcy/Massena 765 kV Current Transformer Replacement – Capital Expenditure Authorization and Contract Award  

                

                                 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize expenditures in the amount of $8.465 million for the replacement and installation of 765 kV SF6 Current Transformers (‘CTs’) and SF6 Combo Current/Potential Transformers (‘PT/CTs’) at the Authority’s Marcy and Massena Substations and to approve the award of a contract to Trench Limited of Le Roy, New York, for $5.043 million for the purchase of these transformers.  Funding includes costs for steel support, foundation modifications, site installation and removal of existing CTs.

 

BACKGROUND

 

“In accordance with the Authority’s Expenditure Authorization Procedures, the award of equipment contracts in excess of $3 million requires the Trustees’ approval.

 

“The CTs are presently 30 years old and are approaching their end of life.  The replacement is based on the failure or potential failure of a number of Cogenel CTs in the Marcy and Massena Substations.  There are no reliable means to detect a potential failure.  The only safe measure is to establish a schedule for the replacement of those CTs that have the highest probability of failure.  The project will replace all Cogenel CTs with SF6 CTs or Combo SF6 CT/PTs, where required.  The replacement is required for transmission reliability and safety.  All work will be performed by the contractor and site staff, where applicable.

 

DISCUSSION

 

“The Authority issued an advertisement in the New York State Contract Reporter and bid documents were available for downloading from the Authority’s website as of November 10, 2008.  Thirteen companies downloaded the bid package and two bids were received.  The original bids were received on December 15, 2008 and Post-Bid Addendums were received on May 21, 2009.  Both bidders, listed below, responded to the original proposal on December 15, 2008, as follows:

 

 

                                Bidder                                   Location               Lump Sum           Revised Price

 

Trench Limited                     Le Roy, NY          $4,470,840           $5,042,966

 

ABB, Inc.                               Cary, NC              $1,446,692 *         $1,233,249*

 

*Incomplete bid proposal. Bidder did not bid on all required items in Request for

  Quotations.

 

“Staff from Engineering (White Plains Office), the St. Lawrence/FDR Power Project and the Clark Energy Control Center evaluated the two bids and determined that only the bid from Trench Electric met the Authority’s technical and operational requirements. 

 

“The additional funds requested are for steel support procurement, foundation modification and site installation.  Installation of the units will commence in the fall of 2010 and continue through the fall of 2013.

 


 

“The following is a breakdown from Trench Limited by location, transformer type/number and bid amount:

 

Location                Transformer Type/Number                               Bid Amount

 

Massena                CT/11 & Combo CT/PT/9                                 $3.579 million

 

Marcy                    Combo CT/PT/7                                                  $1.464 million

 

Total                                                                                                      $5.043 million

 

“Expenditures in the amount of $1.185 million have already been included in the 2009 Capital Budget.  Future-year funding will be included in the Capital Budget requests for those years.

 

FISCAL INFORMATION

 

“Payment associated with this project will be made from the Authority’s Capital Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Transmission, the Vice President – Engineering and the General Manager – Clark Energy Center recommend that the Trustees authorize capital expenditures in the amount of $8.465 million and the award of a contract to Trench Limited in the amount of $5.043 million for the purchase of the 765 kV SF6 Current Transformers and Combo SF6 PT/CT units at the Marcy and Massena Substations.

 

“The Chief Operating Officer, the Executive Vice President and Chief Engineer – Power Supply and I concur in the recommendation.” 

 

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

 

                                RESOLVED, That in accordance with the Authority’s Expenditure Authorization Procedures, the Trustees hereby approve capital expenditures in the amount of $8.465 million and the award of a contract to Trench Limited of Le Roy, New York, for $5.043 million, to purchase and install 27 765 kV Current Transformers and Combo SF6 PT/CT units located at the Marcy and Massena Substations; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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.


 

i.                     Budget and Financial Plan Information Pursuant to Regulations of the Office of the State Comptroller

                               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“In accordance with regulations of the Office of the State Comptroller (‘OSC’), the Trustees are requested to approve for public release a proposed 2010 budget and four-year financial plan; authorize making the proposed budget and four-year financial plan available for public inspection at not less than five convenient public places throughout New York State and authorize posting the proposed budget and four-year financial plan on the Authority’s website. 

 

BACKGROUND

 

                                “OSC regulations 2 NYCRR Part 203, ‘Budget and Financial Plan Format, Supporting Documentation and Monitoring – Public Authorities’ (‘Part 203’), address the preparation of annual budgets and four-year financial plans by ‘covered’ public authorities, including the Authority.  These regulations establish various procedural and substantive requirements, discussed below, relating to the budgets and financial plans of public authorities.

 

DISCUSSION

 

                “Part 203 sets forth specific requirements in connection with submitting, formatting, preparing supporting documentation for and monitoring annual budgets and financial plans of public authorities.

 

“Under Part 203, the Authority’s proposed budget and four-year financial plan (Exhibit ‘1i-A’) must be made available for public inspection at least 30 days before approval by the Trustees of a final budget and financial plan and not less than 60 days before commencement of the next fiscal year.  The availability for public inspection must be for a period of not less than 45 days and in not less than five convenient public places throughout the State.  The regulations also require the Authority to post the proposed budget and four-year financial plan on its website.

 

                “Under Part 203, each proposed budget and four-year financial plan must be shown on both an accrual and cash basis and be prepared in accordance with generally accepted accounting principles; be based on reasonable assumptions and methods of estimation; be organized in a manner consistent with the public authority’s programmatic and functional activities; include detailed estimates of projected operating revenues and sources of funding; contain detailed estimates of personal service expenses related to employees and outside contractors; list detailed estimates of non-personal service operating expenses and include estimates of projected debt service and capital project expenditures. 

               

“Other key elements that must be incorporated in each proposed budget and four-year financial plan are a description of the budget process and the principal assumptions, as well as a self-assessment of risks to the budget and financial plan.  Additionally, the proposed budget and financial plan must include a certification (Exhibit ‘1i-B’) by the chief operating officer (defined as the executive officer responsible for overseeing the day-to-day activities of an authority) that, to the best of his or her knowledge and belief after reasonable inquiry, the proposed budget and financial plan are based on reasonable assumptions and methods of estimation and that the Part 203 regulations have been satisfied.

 

“The Trustees will be asked to approve the Authority’s final budget and four-year financial plan, including any modifications and amendments, at their meeting of December 15, 2009. 

 

FISCAL INFORMATION

 

                “There is no anticipated fiscal impact.

 


 

RECOMMENDATION

 

                “The Director – Financial Planning recommends that the Trustees approve for public release the proposed 2010 budget and four-year financial plan; authorize making the proposed budget and four-year financial plan available for public inspection at no less than five convenient public locations and authorize posting the proposed budget and four-year financial plan on the Authority’s website.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance and I concur in this recommendation.”

 

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

 

                                RESOLVED, That pursuant to 2 NYCRR Part 203, the proposed budget and four-year financial plan, including its certification by the Chief Operating Officer, is approved for public release in accordance with the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That pursuant to 2 NYCRR Part 203, the Corporate Secretary be, and hereby is, authorized to make the proposed budget and four-year financial plan available for public inspection at not less than five convenient public places throughout New York State, notify the Office of the State Comptroller of said locations and post the proposed budget and four-year financial plan on the Authority’s website; and be it further          

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.


 

j.                     Budget Information Pursuant to Section 2801 of the Public Authorities Law

               

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize the Corporate Secretary to submit budget information to the Governor and legislative leaders pursuant to Section 2801 of the Public Authorities Law.

 

BACKGROUND

 

                “In January 2006, the Public Authorities Accountability Act of 2005 (‘PAAA’) was signed into law, reflecting the State’s commitment to maintaining public confidence in public authorities by ensuring that the essential governance principles of accountability, transparency and integrity are followed at all times.  To facilitate these objectives, the PAAA established an Authority Budget Office (‘ABO’) that monitors and evaluates the compliance of State authorities with the requirements of the Act.  Among other things, the PAAA amended Section 2801 of the Public Authorities Law to require that budget reports by a State authority be submitted to designated governmental officials 90 days before the start of the Authority’s fiscal year.

 

DISCUSSION

 

                “The Trustees are requested to authorize the Corporate Secretary to file the attached budget information (Exhibit ‘1j-A’) pursuant to Section 2801(1) of the Public Authorities Law, which provides as follows:

 

State authorities.  Every state authority or commission heretofore or hereafter continued or created by this chapter or any other chapter of the laws of the State of New York shall submit to the governor, chairman and ranking minority member of the senate finance committee, and chairman and ranking minority member of the assembly ways and means committee, for their information, annually not less than ninety days before the commencement of its fiscal year, in the form submitted to its members or trustees, budget information on operations and capital construction setting forth the estimated receipts and expenditures for the next fiscal year and the current fiscal year, and the actual receipts and expenditures for the last completed fiscal year.

 

“As provided in Executive Order No. 173, this information will also be submitted to the State Division of the Budget.  Additionally, the Section 2801 budget information will be electronically posted to the Office of the State Comptroller’s and ABO’s jointly operated Public Authorities Reporting Information System (‘PARIS’).

 

FISCAL INFORMATION

 

                “There is no anticipated fiscal impact.

 

RECOMMENDATION

 

“The Director - Financial Planning recommends that the Trustees authorize submittal of the attached budget information pursuant to Section 2801 of the Public Authorities Law (Exhibit ‘1j-A’) as discussed herein.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance and I concur in this recommendation.”

 

               


 

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

 

                                RESOLVED, That pursuant to Section 2801 of the Public Authorities Law, the Corporate Secretary be, and hereby is, authorized to submit to the Governor, the Chairman and Ranking Minority Member of the Senate Finance Committee, the Chairman and Ranking Minority Member of the Assembly Ways and Means Committee, the Division of the Budget and the Authority Budget Office the attached budget information on operations and capital construction setting forth the estimated receipts and expenditures for the next fiscal year and the current fiscal year, and the actual receipts and expenditures for the last completed fiscal year in accordance with the foregoing report of the President and Chief Executive Officer; and be it further

 

                                RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

k.                   Procurement (Services) Contracts – Business Units and Facilities – Awards and Extensions  

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to approve the award and funding of the multiyear procurement contracts listed in Exhibit ‘1k-A,’ as well as the continuation and funding of the procurement contracts listed in Exhibit ‘1k-B,’ in support of projects and programs for the Authority’s Business Units/Departments and Facilities.  Detailed explanations of the recommended awards, including the nature of such services, the bases for the new awards if other than to the lowest-priced bidders and the intended duration of such contracts, are set forth in the discussion below.

BACKGROUND

“Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts require the Trustees’ approval for procurement contracts involving services to be rendered for a period in excess of one year.

“The Authority’s Expenditure Authorization Procedures (‘EAPs’) require the Trustees’ approval for the award of non-personal services, construction, equipment purchase or non-procurement contracts in excess of  $3 million, as well as personal services contracts in excess of $1 million if low bidder, or $500,000 if sole-source or non-low bidder.

“The Authority’s EAPs also require the Trustees’ approval when the cumulative change- order value of a personal services contract exceeds the greater of $500,000 or 25% of the originally approved contract amount not to exceed $500,000, or when the cumulative change-order value of a non-personal services, construction, equipment purchase or non-procurement contract exceeds the greater of $1 million or 25% of the originally approved contract amount not to exceed $3 million.

DISCUSSION

Awards

“The terms of these contracts will be more than one year; therefore, the Trustees’ approval is required.  Except as noted, all of these contracts contain provisions allowing the Authority to terminate the services for the Authority’s convenience, without liability other than paying for acceptable services rendered to the effective date of termination.  Approval is also requested for funding all contracts, which range in estimated value from $50,000 to $7.5 million.  Except as noted, these contract awards do not obligate the Authority to a specific level of personnel resources or expenditures.

“The issuance of multiyear contracts is recommended from both cost and efficiency standpoints.  In many cases, reduced prices can be negotiated for these long-term contracts.  Since these services are typically required on a continuous basis, it is more efficient to award long-term contracts than to rebid these services annually.

Extensions

“Although the firms identified in Exhibit ‘1k-B’ have provided effective services, the issues or projects requiring these services have not been resolved or completed and the need exists for continuing these contracts.  The Trustees’ approval is required because the term of extension of these contracts will exceed one year.  The subject contracts contain provisions allowing the Authority to terminate the services at the Authority’s convenience, without liability other than paying for acceptable services rendered to the effective date of termination.  These contract extensions do not obligate the Authority to a specific level of personnel resources or expenditures.

“Extension of the contracts identified in Exhibit ‘1k-B’ is requested for one or more of the following reasons:  (1) additional time is required to complete the current contractual work scope or additional services related to the original work scope; (2) to accommodate an Authority or external regulatory agency schedule change that has delayed, reprioritized or otherwise suspended required services; (3) the original consultant is uniquely qualified to perform services and/or continue its presence and re-bidding would not be practical or (4) the contractor provides a proprietary technology or specialized equipment, at reasonable negotiated rates, that the Authority needs to continue until a permanent system is put in place.

“The following is a detailed summary of each recommended contract award and extension.

Contract Awards in Support of Business Units/Departments and Facilities:

Corporate Communications

Communications & Marketing Services

“The three contracts with Angela McRae (‘McRae’), Harrison I. Getz, Jr. (‘Getz’) and Russell Brod (‘Brod’) (Q09-4560; PO# TBA) would provide for the services of freelance graphic designers to perform computer design and production services for print materials including, but not limited to, annual reports, corporate collateral materials, marketing and promotional brochures, newsletters, posters, advertising materials, presentations and exhibits, and to create graphics for the Authority’s internal and external websites.  Such services will be performed on premises at the Authority’s White Plains Office, under the direction and supervision of Authority staff.  Bid documents requesting submittal of qualification statements for one of two options, on-premises computer design and production services (Category A) or project work (Category B), were downloaded electronically from the Authority’s Procurement website by 32 individuals/firms, including those that may have responded to a notice in the New York State Contract Reporter.  Four responses were received and evaluated for on-premises services (Category A); one of these four responses was from a design firm/staffing agency and was not considered further, pursuant to the Authority’s specifications.  Based on a review and assessment of the qualifications, experience and hourly rates submitted by the other three respondents for Category A, all three were pre-qualified by the Authority to provide on-premises services.  Staff recommends award of contracts to all three pre-qualified freelance graphic designers, McRae, Getz and Brod, who meet the bid requirements and have provided satisfactory services under existing contracts for such work.  The new contracts would become effective on October 1, 2009 for an intended term of up to two years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $463,750.  (The award of contracts for services solicited for Category B has been deferred and approval for such awards is not sought at this time.)

Energy Marketing and Business Development

Energy Services and Technology (‘ES&T’)

“The Authority has stepped up its efforts to increase investment in energy efficiency, clean energy and improved system reliability projects through its Energy Services Programs (‘ESP’), many of which involve construction services.  With the increased volume of such construction projects, there is an increased need for construction engineers and support staff to augment the Authority’s permanent ES&T staff, which oversees such construction operations, site safety, permitting and quality of construction work.  The use of such temporary construction management personnel, especially during peak periods of activity, is the most cost-effective method of ensuring the level of resources necessary to support such projects, on an ‘as needed’ basis and without hiring additional permanent staff.  The contracts with Hill International, Inc. (‘Hill’), Industrial Staffing Services, Inc. (‘ISS’), L.J. Gonzer Associates (‘Gonzer’) and RCM Technologies, Inc. (‘RCM’) (Q09-4545; PO# TBA) would provide for such temporary services in connection with selected Authority’s Energy Services and distributed generation projects in Authority Customers’ facilities located mainly in the New York City area, but potentially in other locations throughout New York State.  The contracting firm will furnish the Authority with competent, qualified personnel skilled in the respective specialties delineated by the Authority on an ‘as needed’ basis, to meet the specified requirements of the projects/assignments.  Such personnel will be under the direct supervision of Authority staff.  Bid documents were downloaded electronically from the Authority’s Procurement website by 57 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated.  Of this number, the two proposals with the highest hourly rates were not considered further; a third proposal included mobilization and demobilization expenses, subject to an administrative fee (which was not in accordance with the Authority’s specifications) and was not considered further.  The proposals and sample resumes submitted by the four remaining bidders were evaluated in detail for their technical merit.  Staff recommends award of contracts to all four firms:  Hill, ISS, Gonzer and RCM, the lowest-priced qualified bidders, which meet the bid requirements, possess the requisite experience and industry knowledge and have the ability to recruit and retain a quality pool of resources for the Authority to draw on.  Additionally, three of these firms have successfully provided staffing for the Authority in other areas.  The award of contracts to multiple firms will ensure the availability of sufficient resources to retain the best-qualified personnel for each specific project or task, since no one firm can provide suitable candidates for all required specialties.  The contracts would become effective on October 1, 2009 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $7.5 million (which will be drawn from ESP funding previously approved by the Trustees).  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  All costs will be recovered by the Authority.  (It should be noted that Industrial Staffing Services is a New York State-certified Woman-Owned Business Enterprise (‘WBE’).)

“The Authority has an ongoing need for external cost-estimating and scheduling services to develop cost estimates and schedules for certain in-house designed ESP projects, make change-order evaluations or perform value-engineering and life-cycle analyses in connection with such projects.  The contracts with Baer & Associates, LLC (‘Baer’), Hill International, Inc. (‘Hill’), LiRo Program & Construction Management, P.C. (‘LiRo’) and Nasco Construction Services Inc. (‘Nasco’) (Q09-4569; PO#s TBA) would provide for such cost- estimating and scheduling services in connection with the Authority’s ESP projects.  Due to the need to commence services and support ongoing projects, interim approval was obtained in accordance with the Authority’s Guidelines for Procurement Contracts and Expenditure Authorization Procedures to award a contract to Nasco (4600002158), effective September 1, 2009, in the initial amount of $50,000, subject to the Trustees’ ratification and approval at their next scheduled meeting.  Bid documents were downloaded electronically from the Authority’s Procurement website by 103 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Sixteen proposals were received and evaluated.  A Post-Bid Addendum was issued to clarify the personnel classifications and their corresponding hourly rates; these responses were used by staff to calculate the cost of a typical project for each bidder based on the projected number of man-hours and hourly rates for applicable personnel classifications.  The proposals of the eight lowest-priced bidders were reviewed in detail.  Staff determined that three of the eight firms lacked the necessary experience, so these firms were not considered further.  The remaining five bidders were interviewed by phone, resulting in staff’s determination that one additional firm did not have the necessary experience in cost-estimating and scheduling construction work in commercial office buildings, as required by the Authority for such ESP projects; the four remaining firms met the Authority’s requirements and were deemed qualified to perform such services.  Staff recommends award of contracts to four firms: Baer, Hill, LiRo and Nasco, the lowest-priced qualified bidders, which meet the bid requirements, have the requisite experience and received positive endorsements from their references.  The Trustees are hereby requested to ratify and approve award of the subject contract with Nasco and to approve the award of contracts to Baer, Hill and LiRo, which would become effective on October 1, 2009, for an intended term of up to five years.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $1.2 million.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  All costs will be recovered by the Authority.


 

Enterprise Shared Services

Corporate Support Services

“The contract with A&A Maintenance Enterprise, Inc. (‘A&A’) (Q09-4553; PO# TBA) would provide for the services of operating engineers to provide maintenance engineering support for the Authority’s Clarence D. Rappleyea Building (the White Plains Office).  Such engineers are primarily affiliated with Local 30 of the International Union of Operating Engineers (‘IUOE’).  In addition to providing the services of approximately seven operating maintenance engineers who oversee all aspects of the physical plant associated with the safe, efficient operation of the building, services also include administration and negotiation of the collective bargaining agreement with the IUOE.  Bid documents were downloaded electronically from the Authority’s Procurement website by 20 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Based on its experience, qualifications, resources and ability to perform such work, in addition to its competitive pricing, staff recommends award of a contract to A&A, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory services under an existing contract for such work.  The new contract would become effective on October 1, 2009 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $4.25 million.

Power Supply

“The contracts with ABB Inc. (‘ABB’) and American Electrical Testing Co., Inc. (‘AETC’) (Q09-4586; PO#s TBA) would provide for switchyard equipment maintenance services at 10 generation sites (including the Small Clean Power Plants, 500 MW, Richard M. Flynn and Kensico Plants, as well as other plant sites in the Authority’s Southeastern New York region, as may be required) and four Y-49 transmission sites, to ensure their continued integrity and reliable operation.  Services include, but are not limited to, preventative maintenance at prescribed intervals, general inspections and testing of the protective relay system (in compliance with North American Electric Reliability Corporation regulatory requirements), as well as emergency repairs, as needed, including those sites associated with feeder protection and interconnection to the local utility.  Bid documents were downloaded electronically from the Authority’s Procurement website by 24 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Four proposals were received and evaluated.  The main review criteria to compare proposals involved the cost to perform the work (including each bidder’s cost estimate for a typical scope of work based on man-hours and hourly rates) and the technical merit of the proposals, based on technical evaluation criteria, which included, but were not limited to: experience with similar preventative maintenance services demonstrated by examples of standard inspections, maintenance reports and overhauls; examples of prior work, including various reports and certifications; credentials of key personnel as evidenced by submitted resumes; emergency response time and deployment location; quality of the proposal, etc.  Based on the foregoing, staff recommends award of contracts to two firms, ABB and AETC, the lowest-priced bidders, which are qualified to perform such work and meet the bid requirements and aforementioned technical criteria.  The award of contracts to two firms will ensure the availability of sufficient and quality resources for each specific scope of work, capitalizing on the respective strengths of each firm.  Additionally, the capabilities of both firms are also known to the Authority based on satisfactory services they have provided to the Authority (one under an existing contract for such work and the other under a prior contract for similar work).  The new contracts would become effective on October 1, 2009 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contracts, $5 million, including contingency for emergent minor repairs, equipment failures and associated materials.

“The contract with Advanced Fire Solutions, Inc. (‘AFS’) (P09-102216; PO# TBA) would provide for inspection, maintenance, testing and repair services for the fire alarm system at the Authority’s 500 MW Plant, in accordance with all applicable national, State, New York City and other local fire protection standards, code and licensing requirements, as well as other industry standards, manufacturers’ recommendations and Authority requirements.  Bid documents were downloaded electronically from the Authority’s Procurement website by 20 firms, including those that may have responded to a notice in the New York State Contract Reporter.  One additional vendor responded to the Request for Quotations without downloading. Three proposals were received and evaluated.  Staff recommends award of a contract to AFS, the lowest-priced bidder, which is qualified to perform such services and meets the bid requirements.  The contract would become effective on October 1, 2009 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $50,000.

“The contract with Atlantic Testing Laboratories, Limited (‘ATL’) (Q09-4577; PO# TBA) would provide for on-call laboratory testing and inspection services of various materials including, but not limited to, concrete samples, metal, paint coating, welds and soil for the St. Lawrence/FDR Project, on an ‘as needed’ basis.  The independent testing laboratory would perform such verification testing or inspection services in connection with some site construction projects, to ensure that a material conforms to all requisite standards and requirements.  Bid documents were downloaded electronically from the Authority’s Procurement website by 49 firms, including those that may have responded to a notice in the New York State Contract Reporter.  One proposal was received and evaluated.  Procurement staff followed up with vendors that declined to bid; their reasons for not bidding included, but were not limited to, the work not being in the scope of their services or expertise, their current work load being too heavy, timing/scheduling/staffing issues or they had downloaded the bid documents for information purposes only.  Staff recommends award of a contract to ATL, the sole bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under an existing contract for such work.  The new contract would become effective on or about January 1, 2010 for an intended term of up to four years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $316,443.

“As a result of the September 11, 2001 terrorist attacks, the Authority added or installed state-of-the-art security system upgrades at its power plant sites in the SENY region.  At their meeting of July 26, 2005, the Trustees approved the award of a multiyear service contract to Electronic Technologies Corp. (‘ETC’) to provide for maintenance and repair services (as well as installation services, if required) for existing security systems at the Authority’s 12 office and power plant sites in the SENY region; the 500 MW plant was added after commissioning.  Although the existing contract does not expire until December 31, 2010, the approved funding has been expended at an accelerated rate due to the amount of unexpected additional service work, emergency services and expansion of the security network resulting from security upgrades.  Based on the foregoing, and the expiration in September 2009 of warrantees for the earlier phases of the work, staff elected to rebid the security system maintenance services early.  To this end, the Authority issued a notice in the New York State Contract Reporter (Q08-4411) requesting security system maintenance contractors to submit qualification statements, including evidence of specific certifications, to provide maintenance services for installed security systems at the Authority’s 13 SENY sites (including the Albany, White Plains and New York offices, and the Poletti, 500 MW, Flynn and seven Small Clean Power Plant sites).  Based on their ability to service existing security system software (Software House certification required), favorable references regarding similar services for other customers in the SENY region and their ability to service the sites adequately (and within a four-hour period from call-out), 10 security contractors were prequalified by the Authority and were subsequently invited to bid on these services, in compliance with U. S. Homeland Security regulations for protecting sensitive proprietary information.  Six of the 10 prequalified security contractors submitted proposals for consideration.  The security proposal Evaluation Committee comprising Authority staff from Engineering, Project Management, Procurement and Corporate Security evaluated all six proposals.  The Evaluation Committee recommends award of a contract to Ingersoll Rand Security Technologies (formerly ETC), the lowest-priced qualified bidder, which meets the bid requirements and has provided satisfactory services under an existing contract for such work.  The new contract would become effective on October 1, 2009 for an intended term of up to 5.25 years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $1,341,900 (comprising $691,900 for the fixed-price portion for 21 quarters through December 31, 2014 and an additional $650,000 for future planned and unplanned work, such as equipment replacement due to obsolescence, breakage or upgrades, as well as for emergency ‘off-hours’ call-out services, as may be required).

“The contract with Kleinfelder East, Inc. (‘Kleinfelder’) (Q09-4522; PO# TBA) would provide for the services of a full-time, experienced safety professional to augment current staffing in support of the Authority’s Safety and Health programs, policies and procedures for the SENY region.  Services include, but are not limited to, supporting day-to-day operations; reviewing existing Health and Safety programs, recommending improvements and updating policies and procedures; evaluating contractor safety records and job performance; assisting with accident and near-miss investigations and developing preventive measures; performing job hazard analyses; auditing all facilities for compliance with Safety and Health-related policies and procedures and recommending corrective action to management; developing new Safety and Health programs and techniques, and training and mentoring Authority employees.  The objectives include, but are not limited to, managing the SENY Safety and Health programs to reduce and eliminate employee injury and damage to property and equipment, and developing site management strategies to ensure compliance with mandatory federal and state Occupational Safety and Health Administration requirements and provide a safe work environment.  In addition to normal working hours, the contractor must be available to respond to emergencies and travel to SENY facilities and the Authority’s White Plains Office, as required.  Bid documents were downloaded electronically from the Authority’s Procurement website by 38 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  The Evaluation Team then met with the two lowest-priced bidders.  After a thorough review of both proposals and discussions with both firms, staff recommends award of a contract to Kleinfelder, the more technically qualified of the two lowest-priced bidders that meets the bid requirements.  Kleinfelder demonstrated depth and breadth of experience and proposed seasoned, qualified candidates who would be more suited and better qualified to meet the Authority’s needs, to evaluate and update the Authority’s safety programs, identify areas of improvement, recommend changes, audit Authority facilities and train and mentor Authority employees.  The contract would become effective on October 1, 2009 for an intended term of up to two years, subject to the Trustees’ approval, which is hereby requested. (The initial term of this contract would be one year, with an option to extend for one additional year, if needed, based on the expectation that ultimately this position will be filled by a permanent Authority employee and the contractor will be used to mentor and train such employee.)  Approval is also requested for the total amount expected to be expended for the term of the contract, $600,000.

“The contract with Longo Electrical-Mechanical, Inc. (‘Longo’) (Q09-4573; PO# TBA) would provide for inspection, repair, overhaul and rewind services for various-size motors (ranging from 100 to 10,000 horsepower) at the Authority’s power plants in the SENY region, on an ‘on-call, as needed’ basis.  Bid documents were downloaded electronically from the Authority’s Procurement website by 22 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Two proposals were received and evaluated.  Staff recommends award of a contract to Longo, the lower-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory services under an existing contract for such work.  The new contract would become effective on October 1, 2009 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $250,000.

“The contract with Millennium Power Services, Inc. (‘Millennium’) (Q09-4561; PO# TBA) would provide for all labor, supervision, tools and equipment to perform on- and off-site valve repair services (e.g., globe, gate, check safety and plug valves) for the Authority’s power plants in the SENY region, on an ‘as needed’ basis.  The contractor is also required to be on call ‘24/7’ and to respond within a few hours after being called. Bid documents were downloaded electronically from the Authority’s Procurement website by 21 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Two responses were received to a Post-Bid Addendum issued to the three bidders, requesting pricing for a sample valve repair job.  Staff recommends award of a contract to Millennium, the lower-priced bidder, which is qualified to perform such services and meets the bid requirements (as further evidenced by a meeting with Authority staff).  Millennium also has mobile machine shops equipped with all the equipment and machinery (e.g., sandblasting cabinets, lathes, milling machines, drill presses, grinders, valve reseaters and welding machines) necessary to support on-site installation, repair or replacement needs of the power plants.  The contract would become effective on October 1, 2009 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $750,000.

“The contract with Russell Reid Waste Hauling and Disposal Service Co., Inc. (‘Russell Reid’) (Q09-4593; PO# TBA) would provide for supervision, labor, materials and equipment to load, transport and dispose of 7,000-60,000 gallons (per request) of wastewater from a 100,000-gallon storage tank at the Richard M. Flynn Power Plant (‘Flynn’) to a Suffolk County Department of Public Works Publicly Owned Treatment Works (‘POTW’) or Scavenger Plant, and up to 1,000 gallons of non-toxic biomass sludge from a holding tank at Flynn to the Bergen Point facility in West Babylon (as approved by Suffolk County).  All phases of this work must be performed in accordance with all applicable rules and regulations, such as valid transporter and waste disposal permits.  Bid documents were downloaded electronically from the Authority’s Procurement website by 20 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Staff recommends award of a contract to Russell Reid, the lowest-priced bidder, which is qualified to perform such services and meets the bid requirements.  The contract would become effective on October 1, 2009 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $500,000.

Contract Extensions:

Energy Marketing and Business Development

Energy Services and Technology

“The Statewide Energy Services Program (‘Statewide ESP’) is an energy efficiency program that provides a turnkey approach to identifying, procuring and implementing energy-saving solutions for participants outside the SENY service territory.  At their meeting of December 14, 2004, the Trustees approved the award of contracts to three firms:  AECOM USA Inc. (formerly DMJM + Harris), Ameresco Select, Inc. (formerly Select Energy Services, Inc.) and PB Americas, Inc. (formerly PB Power, Inc.) (4600001362, 4600001363 and 4600001364, respectively) for project management and program implementation services in connection with the Statewide ESP initiative.  The Trustees also approved a funding increase in the Statewide ESP in the amount of $250 million; of this amount, the Trustees approved an aggregate total of $230 million to the three aforementioned Implementation Contractors (‘ICs’) to assist Authority staff with the audit, design and construction of Statewide ESP projects, to be allocated as projects are assigned.  The contracts, which were competitively bid, became effective on January 1, 2005 for an initial term of three years, with an option to extend for up to two additional years through December 31, 2009, which was subsequently exercised.  (While all three ICs performed well, one firm (AECOM) subsequently withdrew from the statewide market.  Since the demand for the Statewide ESP had increased dramatically, it was necessary not only to replace the IC that withdrew from the statewide market, but also to retain a fourth IC in order to provide the resources necessary to meet the increased program demand for such services.  At their meeting of June 27, 2006, the Trustees approved the award of competitively bid contracts to two additional firms:  Einhorn Yaffee Prescott Architecture & Engineering, PC and Wendel Energy Services, LLC, which are also funded from the aforementioned aggregate $230 million.)  While many projects assigned to Ameresco and PB Americas have been completed successfully, the progress of approximately 15 other projects previously assigned to these two firms has been delayed, primarily due to delays in customer approvals and increases in project scope requested by the customers.  Examples of such projects that will require additional time for completion include, but are not limited to: Albany City Schools, BOCES – Washington-Saratoga-Warren-Hamilton-Essex, SUNY Brockport, City of Rochester, Office of General Services – Empire State Plaza East Garage, Sunmount DDSO (Developmental Disabilities Services Office), Suffolk County Community College, SUNY Buffalo – Ellicott Complex and Broome DDSO – Office of Mental Retardation and Developmental Disabilities.  The scopes of work vary and are determined by the Customers/facilities; they may include, but are not limited to: replacement of boilers, chillers, HVAC systems and related controls; installation/upgrade of lighting and lighting controls; replacement of motors, pumps, water heaters; installation of photovoltaic generators, building insulation and building energy management system controls.  Since work is in progress on these projects, and these contractors have been performing very well, it would not be practical or cost effective to rebid these services or reassign these projects to a new contractor/s.  A three-year extension of the contracts with Ameresco Select and PB Americas is therefore requested to provide for the continuation of IC services through completion of all such previously assigned projects.  No new projects will be assigned to these contracts.  The current ‘Target Value’ for all five contracts totals $140 million, of which $80,283,302 has been released to date.  Staff anticipates that no additional funding in excess of the previously approved aggregate $230 million will be required for the extended term.  The Trustees are requested to approve the extension of the subject contracts with Ameresco Select and PB Americas through December 31, 2012 and to approve the release and allocation of the $90 million remaining from the previously approved $230 million, as needed.  Change Orders reflecting such allocations will be executed in accordance with the Authority’s EAPs. Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  It should be noted that all costs will be recovered by the Authority.

Power Supply

“The contract with Power Engineering, Inc. (4600001971) provides for engineering analyses and testing of one pump-turbine/motor-generator unit at the Niagara Power Project’s Lewiston Pump Generating Plant (‘LPGP’).  The purpose of such services is to identify and characterize operating problems, such as unit vibrations, pressures and pressure pulsations, and structural response, and to report on the condition of the tested unit.  The resulting information will be used in the preparation of the Life Extension and Modernization (‘LEM’) program for LPGP.  The original award, which was competitively bid, became effective on August 5, 2008 for a term of up to one year and for the approved amount of $465,434.  The completion of services performed under the subject contract is based on the results of related testing performed by General Electric (‘GE’) under another contract.  Since the GE testing (originally scheduled to be completed by July 2009) has not yet been completed, a five-month extension of the Power Engineering contract is therefore required in order to complete the work.  Such tasks include:  reverse engineering the motor-generator’s capabilities and response, benchmarking the original motor-generator’s performance, modifying the baseline of the generator to incorporate the current stator winding and temperature rise data for tests being performed by GE, predicting the electromagnetic and thermal ratings of the machines and identifying the maximum capability increase of the unit.  An interim extension was authorized in accordance with the Authority’s Guidelines for Procurement Contracts and Expenditure Authorization Procedures.  The current ‘Target Value’ is $465,434, of which $443,270 has been released to date.  Staff anticipates that no additional funding above the originally approved amount will be required for the extended term.  The Trustees are requested to ratify and approve the extension of the subject contract through December 31, 2009, with no additional funding requested.

“At their meeting of October 26, 1999, the Trustees approved the award of a contract to Voith Hydro, Inc. (‘Voith’) (4500016211) to provide for the delivery of 16 new Generation Control Systems (‘GCS’) and associated work, as part of the LEM program at the St. Lawrence/FDR Power Project, in the amount of $11,469,657.  The Trustees also approved the initial release of $1,995,330 for the design, development, testing and furnishing of the first GCS.  At their meeting of June 25, 2002, the Trustees authorized a $10 million increase and a total contract amount of $21,504,806; at their meeting of September 20, 2005, the Trustees increased the compensation limit (expenditure release authorization) for the subject contract to the previously approved $21.5 million.  Voith has been successfully furnishing and commissioning equipment to control the generation assets at the plant in accordance with the LEM schedule (currently expected to be completed by 2013); 11 of the 16 units have been completed to date.  Recently, the Authority started work on headgate automation, which identified several emergent issues encountered during construction and which will necessitate a change in scope to the Voith contract.  Such issues include, but are not limited to, the following: (1) equipment (such as pushbutton stations) that was originally envisioned to be reused has reached its end of life and must be replaced; (2) the Authority requested that Voith (rather than the Authority, as was originally planned) procure the instrumentation for the headgates in order to preclude any potential issues during commissioning; (3) the original number of hours allotted per the contract for commissioning the units and headgates has been almost depleted by commissioning the units and additional hours will be required for commissioning the headgates following automation and (4) Voith is requesting escalation costs for headgate equipment hardware components still to be procured (due to a change in schedule requested by the Authority).  The current contract amount is $21,230,055 (of the approved total $21,504,806); $19,420,429 has been expended to date.  Staff estimates that an additional $1.5 million will be required to accommodate the required change in scope.  The Trustees are requested to approve the additional funding requested, increasing the contract amount and expenditure release authorization to $23,004,806.

FISCAL INFORMATION

“Funds required to support contract services for various Business Units/Departments and Facilities have been included in the 2009 Approved O&M Budget.  Funds for subsequent years, where applicable, will be included in the budget submittals for those years.  Payment will be made from the Operating Fund.

“Funds required to support contract services for capital projects have been included as part of the approved capital expenditures for those projects and will be disbursed from the Capital Fund in accordance with the project’s Capital Expenditure Authorization Request.  Payment for the contracts in support of Energy Services Programs will be made from the Energy Conservation Effectuation and Construction Fund.  All costs, including Authority overheads and the cost of advancing funds, will be recovered by the Authority consistent with other Energy Services and Technology Programs.

RECOMMENDATION

“The Vice President – Engineering, the Vice President – Project Development and Management, the Vice President – Environment, Health and Safety, the Vice President – Technical Compliance, the Vice President – Procurement, the Director – Corporate Support Services, the Director – Communications and Marketing Services, the Director – Engineering and Design, the Director – Construction, the Security Manager, the Regional Manager – Northern New York, the Regional Manager – Southeastern New York and the Director of Operations (Flynn), recommend that the Trustees approve the award of multiyear procurement contracts to the companies listed in Exhibit ‘1k-A,’ and the extension and/or additional funding of the procurement contracts listed in Exhibit ‘1k-B,’ for the purposes and in the amounts discussed within the item and/or listed in the respective Exhibits.

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Executive Vice President and Chief Engineer – Power Supply, the Senior Vice President – Power Supply Support Services, the Senior Vice President – Enterprise Shared Services, the Senior Vice President – Corporate Communications, the Senior Vice President – Energy Services and Technology 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 Guidelines for Procurement Contracts adopted by the Authority, the award and funding of the multiyear procurement services contracts set forth in Exhibit “1k-A,” attached hereto, are hereby approved for the period of time indicated, in the amounts and for the purposes listed therein, as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, the contracts listed in Exhibit “1k-B,” attached hereto, are hereby approved and extended for the period of time indicated, in the amounts and for the purposes listed therein, as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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.

 


 

l.                     Authorization to Award Bids and Execute Agreements to Provide Energy Supplies to Governmental Customers in Southeastern New York
               

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to award bids to, and authorize the execution of agreements with, several recommended suppliers (‘Suppliers’) for financial energy hedges in connection with the energy service needs of the Authority’s governmental customers in New York City and Westchester County (‘Governmental Customers’).  The Suppliers and respective financial energy hedges awarded to them will be combined into a Governmental Customer supply portfolio.

 

BACKGROUND

 

“Under the Long-Term Agreements, the Authority serves the energy needs of its Governmental Customers with self-generation and market purchases.  The market purchases have predominantly consisted of a combination of long-term physical purchases and short-term energy trading transactions.  To further enhance stability in the year-to-year cost of the Governmental Customer supply portfolio, the Authority and the Governmental Customers agreed to pursue a laddering strategy for medium-term energy purchases under which supplies would be procured in segments of limited size and duration that are designed to be staggered and overlapping. 

 

“On July 29, 2009, at the request of and in close consultation with the Governmental Customers, the Authority issued a Request for Proposals (‘RFP’) for energy supplies of up to 500 MW to commence as early as January 1, 2010, for a term of up to five years.  Under the RFP, energy supply could take the form of physical deliveries from a specified generating facility or financial energy hedges ‘contracts for differences’ (also known as ‘CFDs’), both of which would secure the purchase of energy on the open market at a fixed price.  Proposals offering Unforced Capacity (‘UCAP’) were allowed provided the UCAP was bundled with physical or financial energy supplies.

 

“By the bid submission date of August 21, 2009, the Authority had received bids from 18 prospective suppliers.  Bids included financial and physical energy supplies and in some instances, UCAP bundled with the energy supplies. 

 

DISCUSSION

 

“An analysis team comprising Authority staff and representatives of the Governmental Customers, including their consultants, analyzed the proposals and agreed on a supply portfolio consisting exclusively of financial energy hedges.  The New York City Governmental Customers have provided the Authority with their concurrence and consent to the supply portfolio as set forth in a Term Sheet that has been provided to the Trustees under separate cover due to the confidential nature of the Suppliers’ names, the pricing and volumes offered and the pending status of the final negotiations.  The decision of the Westchester County Customers to participate in and concur with the supply portfolio is pending.  If they choose to participate, they will assume responsibility for a proportional amount of the overall energy supply portfolio.

 

“The cost of the recommended portfolio compares favorably with the analysis team’s projection of market energy prices over the period, with the added advantage that execution of the recommended supply agreements would eliminate the price risk associated with rising and/or fluctuating prices.

 

FISCAL INFORMATION

“It is estimated that the financial energy CFD agreements will cost, in the aggregate, approximately $1 billion over the period 2010 through 2014.  The detailed components of this calculation are provided in the Term Sheet.

“The Suppliers’ prices shown in the Term Sheet are indicative and are subject to adjustment as day-to-day markets fluctuate; the prices will be finalized after the Trustees authorize execution of the agreements.  Accordingly, the Trustees are asked to authorize the President and Chief Executive Officer to enter into final contracts with the Suppliers, consistent with the provisions outlined in the Term Sheet.

 

“Costs will be recovered from the Governmental Customers in accordance with the terms and conditions of the applicable Long-Term Agreements.

 

RECOMMENDATION

 

“The Vice President – Power Resources Supply and Acquisition recommends that the Trustees authorize the President and Chief Executive Officer, or his designee, to enter into agreements with the Suppliers upon such terms and conditions as he deems necessary or advisable and as are consistent with the Term Sheet, based on the Long-Term Agreements with the Governmental Customers and those customers’ concurrence with those purchases.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Acting Senior Vice President – Marketing and Economic Development, the Vice President – Energy Risk Assessment and Control and I concur in the recommendation.”

 

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

 

WHEREAS, the Authority has contractual obligations to serve the energy needs of various Governmental Customers in New York City and Westchester County; and

 

WHEREAS, the source of energy to serve the needs of these customers has been and continues to include, among other things, existing power-purchase agreements and financial supply agreements; and

 

WHEREAS, at the request of, and in cooperation with the Governmental Customers, the Authority issued a Request for Proposals (‘RFP’) for energy supplies of up to 500 MW per year to supplement these customers’ energy needs; and 

 

WHEREAS, as a result of such RFP, the Authority-Customer team identified suppliers offering financial energy products that compare favorably with projections of market energy prices and potentially eliminate the price risk associated with rising and/or fluctuating prices.

 

NOW, THEREFORE, BE IT RESOLVED, That the President and Chief Executive Officer, or his designee, is hereby authorized on behalf of the Authority to negotiate and execute agreements between the Authority and various Suppliers, as described in the Term Sheet provided under separate cover to the Trustees, including (a) ISDA Master Agreements and any transactions, schedules or confirmations related to such ISDA Master Agreements, and (b) any transactions, schedules, amendments or confirmations related to any existing ISDA Master Agreements between the Authority and any of the above-described entities, provided that the Treasurer and the Vice President – Energy Risk Assessment and Control have given their approval as to the credit arrangements set forth in such agreements, amendments,  transactions, confirmations and schedules; and be it further

 RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents necessary or advisable to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.


m.                 Revisions to the Authority’s Code of Conduct

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to adopt a newly revised Code of Conduct (‘Code’) (Exhibit ‘1m-A’) that will replace the current Code of Conduct in its entirety and conform with all provisions of the New York State Public Employee Ethics Reform Act of 2007 (‘PEERA’) and other applicable provisions of the New York State Public Officers Law (‘POL’).  This new Code will cover all Authority Trustees and employees.

 

BACKGROUND

 

“The Authority, as a public entity, is responsible for maintaining the highest level of honesty, ethical conduct and public trust in all of its activities.  To meet this responsibility, the Trustees adopted the ‘Conflicts of Interest Policy’ in 1988 to address important aspects of ethical conduct.  The Trustees revised the policy in 1994 and renamed it the ‘Code of Conduct.’ 

 

“The Trustees revisited the Code again in 1998 when they addressed conflicts of interest related to employees’ trading in or acquiring the securities of utility companies operating in New York State.

 

“On January 1, 2007, former Governor Eliot Spitzer issued a series of Executive Orders that clarified certain provisions of the POL and set forth enhanced ethical standards for public employees relating to their official activities, as well as additional behaviors expected of them.  Those Executive Orders were the foundation of the PEERA. 

 

DISCUSSION

 

“While the existing Code of Conduct has served the Authority and its employees well since its adoption, it needs to be updated to reflect all existing ethics laws and be more user friendly.  The proposed Code accomplishes these objectives by simplifying legal and/or technical provisions and replacing them with language that is clear and concise.  It transitions from a restatement of the prevailing legal standards to a more colloquial approach which will be accessible and capable of being utilized more readily by employees.  It will also apply to all Authority employees, including bargaining unit members, for the first time.

 

“The substantive standards contained in the current Code have been preserved.  They are all accounted for in more universal language and in some instances, have been revised to reflect modifications in the POL resulting from the PEERA.  An annotation has been added at the end of each new proposed section in Exhibit ‘1m-A’ reflecting the current corresponding Code provision.  In some instances, standards have been added to reflect expectations outlined in the Executive Orders and are noted accordingly.  These annotations will not be included in the final adopted Code which will be distributed to all Trustees and employees and posted on the Authority’s internet and intranet communications sites. 

 

“The primary provisions added as a result of the PEERA legislation seek to prevent Authority staff from allowing nepotism or partisan politics to play a role in employment and contract award business decisions and activities.  They also contain more strict ‘gifts’ rules to prevent conflicts of interest and improper influence of public employees in their official duties.

 

RECOMMENDATION

 

“The Chief Ethics and Compliance Officer recommends that the Trustees approve the revised Code of Conduct as discussed above and contained in Exhibit ‘1m-A’ attached hereto.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel 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’s Code of Conduct be revised as set forth in the foregoing report of the President and Chief Executive Officer and Exhibit ‘1m-A,’ with such revised Code of Conduct to be effective as of September 29, 2009; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 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.

 


 

 

NEW YORK POWER AUTHORITY

CODE OF CONDUCT

 

I.          STANDARDS OF CONDUCT

 

New York Power Authority employees, officers and trustees shall perform their duties with integrity and:

 

1.            Refrain from engaging in outside activities, including other employment and financial interests, which could impair their independence of judgment or prevent the proper exercise of their official NYPA duties.  All outside employment and publicly elected positions held or being sought must be reported to your supervisor, department or business unit head and the Ethics Office for evaluation to ensure the absence of conflicts of interest.  Individuals serving in ‘policy-making’ positions must also obtain the approval of the NYS Commission on Public Integrity.  [Former General Standard 1; Specific Standards 1, 2, 3, 4]

 

2.      Conduct themselves at all times in a manner that avoids any appearance of or situation where they could be either improperly influenced, give or be given preferential treatment to or by any person or entity or act in violation of the public trust.  [Former General Standard 2 (b) (c) (d); General Standard 4]

 

3.            Not use or attempt to use their official position to secure unwarranted privileges for themselves, their relatives or any other party, including contracts and employment with NYPA.  [Former General Standard 2 (a) (b), General Standard 3]

 

4.            Not participate in any decision or process to hire, promote, discharge, discipline or supervise a relative.  (See Employee Policy 1.2 ‘Recruitment and Job Posting’) [Added as a result of PEERA; POL §73 (14)(a)]

 

5.            Not endorse the products or services of other entities or individuals as a representative of NYPA, including appearing in publications advertising, endorsing or selling products or services of third parties.  [New addition to clarify one category of preferential treatment]

6.            Not engage in any NYPA transaction or work assignment (including contract development, solicitation, evaluations, awards) involving another business in which they or a relative have a direct or indirect financial interest.  This provision does not apply to ownership of shares of stock commonly owned in a mutual fund.  It does include personally owned and directed stock of any corporation traded on a recognized stock exchange, where there is an ownership interest greater than or equal to 10% in the corporation.  [Former Specific Standards 1 and 2; Added as a result of PEERA; POL §73 (15)(a)(b)]

 

7.            Not supply NYPA with any goods and/or services (individually or through another business entity) except in the performance of their official position.  Relatives of NYPA employees are also subject to this prohibition in accordance with NYPA’s applicable Procurement Guidelines.  [Former Specific Standard 5]

 

8.            Not use NYPA property, including equipment, vehicles, staff and other assets or resources in a manner inconsistent with applicable laws, NYPA’s policies and mission.  [Added as a result of Executive Order 1.4]

 

9.            Not accept, receive or solicit any gift or gratuities of more than nominal value where the circumstances would infer that (a) the gift is intended to influence the individual in the performance of official business or (b) the gift represents a tip, reward or sign of appreciation for any official act.  Gifts include any form of financial discounts and payments, services, loans, travel reimbursements, lodging, meals, entertainment or promise from any entity doing business with or seeking to do business with NYPA.  Gifts from disqualified sources (contractors, vendors, customers) are prohibited.  [Former Specific Standard 6 (a(1)),( a(2)); 6 (b), 6 (c)]

 

10.        Not directly or indirectly advise or assist any person in making a financial investment or other decision utilizing confidential information acquired at NYPA, nor disclose any confidential information as a result of information obtained through NYPA employment.  (See Corporate Policy 6-1 ‘Securities Trading and Use of Confidential Information’) [Former Specific Standard 4]

 

11.        Refrain from acquiring and trading in the securities of electric and gas utility corporations doing business within New York State (other than shares owned in a mutual fund).  (See Corporate Policy 6-1 ‘Securities Trading and Use of Confidential Information)  [Former Section III]       

 

12.        Prohibit the appearance of elected government officials and candidates in advertisements or promotions paid with public funds.  [Added as a result of PEERA; POL §73-b]

 

13.        Not use one’s official position to compel or induce any other state officer or employee to make or promise to make any political contribution, nor inquire about a prospective or current employee’s political party affiliation, contributions or voting record.  (See Employee Policy 1.2 ‘Recruitment and Job Posting’) [Added as a result of PEERA; POL §73 (17)9(a)(b)(c)]

 

14.        Not appear or practice before or receive compensation from NYPA or other entities where the former employee will be involved in providing goods or services to NYPA for two (2) years following one’s NYPA employment.  This does not preclude ‘re-employment’ by NYPA subject to any applicable statutory cap on earnings. [Former Section IV as it relates to NYS POL §73 (8)(a)(i)]

 

15.        Not appear or practice before or receive compensation from NYPA or other entities where the former employee will be involved in providing goods or services to NYPA at any time following one’s NYPA employment relating to matters on which one personally worked for NYPA.  This does not preclude ‘re-employment’ by NYPA subject to any applicable statutory cap on earnings.  [Former Section IV as it relates to NYS POL § 73(8)(a)(ii)]

 

The term ‘Relative’ as used in this Code of Conduct means any person living in the same household as the NYPA employee, officer or trustee and any person who is a direct descendant of that individual’s grandparents or the spouse of such descendant.  [Definition derived from NYS POL §73 1 (m)]

 

These Standards of Conduct do not replace and are in addition to the requirements of all applicable laws and regulations, including but not limited to, NYS Public Officers Law Sections 73, 73-a, 73-b and 74 and Title 19 NYCRR Parts 930, 932. [Former Code included the POL text in its entirety]

 

II.        CERTIFICATION AND IMPLEMENTATION OF THE CODE OF CONDUCT

 

This Code of Conduct shall be provided to all employees, officers and trustees upon commencement of employment or appointment.

 

Employees, officers and trustees will be requested to certify annually that they have read the Code of Conduct and that they comply with its standards. [Former Section V]

 

The Chief Ethics and Compliance Officer will provide periodic reports to NYPA’s Governance Committee of the Board of Trustees about the status and disposition of concerns and issues raised under the Code of Conduct.

 

III.       REMEDIES FOR BREACHES OF THE CODE OF CONDUCT

 

In addition to any penalty contained in any other provision of law, a NYPA employee, officer or trustee who violates the Code of Conduct may be disciplined upon findings and recommendations prepared by the Chief Ethics and Compliance Officer in consultation with the Executive Vice President and General Counsel.  Remedies and disciplinary action may include one or more of the following actions:

 

·               Issuance of written warnings

·               Direction of written corrective action to eliminate a conflict of interest

·               Restitution

·               Adverse salaried employee performance assessments

·               Changes in assigned job duties

·               Suspension or termination of employment

 

Any disciplinary action arising out of violations of this Code of Conduct affecting NYPA’s bargaining unit employees will be administered in accordance with the applicable collective bargaining agreement.

 

The concurrence of the President and CEO and Chief Operating Officer is required for any suspension or termination of employment solely arising out of violations of the Code of Conduct.  [Former Section VI]

 

Former NYPA employees, officers and trustees who are later found to have violated the Code of Conduct during their NYPA employment may also be precluded from doing business with NYPA.

 

IV.       REPORTING UNETHICAL BEHAVIOR

 

We urge you to report any unethical or questionable behavior to the Ethics Office, your NYPA business contact, Human Resources-Employee Relations or Facility Human Resources Managers.  You are also encouraged to utilize NYPA’s toll-free Employee Concerns Line (1-877-TEL-NYPA).  It is accessible 24 hours a day, 7 days a week.  Calls may be made anonymously.

Anyone reporting an ethical concern or participating in the investigation of a reported concern is protected from retaliation by NYPA’s policies and the law.  (See Corporate Policy 1-7 ‘Anti-Retaliation Policy’)

 


 

Discussion Agenda

 

2.             a.             Report of the President and Chief Executive Officer

 

                Chairman Kessel provided an overview of his activities since the July Trustees’ Meeting, as follows:

President Kessel said that later this week he will be meeting with the multiple intervenors; taking part in a press conference on the Authority’s Industrial Incentive Awards at International Wire Group in Camden, Oneida County and attending meetings in Massena and Cooperstown.  President Kessel said that when he is traveling, Mr. Quiniones and other senior staff do an admirable job of keeping day-to-day Authority operations going in White Plains.  He also commended Mr. James Pasquale, Mr. Russak and Mr. Paul Finnegan for the jobs they are doing.  He said that after these next few weeks, he is going to try to travel a little less, perhaps limiting his trips to two days a week.

                Trustee Nicandri expressed concern, after learning about the recent disaster at a Russian hydropower plant, that the Authority’s inability to adequately compensate its staff was going to make it increasingly difficult to retain and recruit talented people.  He said that the Authority has an obligation to have qualified people in place to run its operations.  President Kessel agreed that this was a huge challenge for the Authority and that the Authority is losing a lot of people, particularly in the area of operations.  He also said that the pay issue has a huge effect on employee morale.  He suggested that the issue of employee compensation be discussed more fully in Executive Session. 

                President Kessel said that had he been at the Authority in prior years, he would have tried to keep the Poletti plant open past January 2010, since he believes it is a mistake to close it down.

                President Kessel said that he thinks the Authority is seen differently upstate now than it was a year ago because people are becoming more aware of how much the Authority is doing upstate.  He said that his report to the Trustees in October would recap what he, the Trustees and staff have accomplished during his first year at the Authority.

                President Kessel said that there had been several recent newspaper articles about use of the Authority’s plane.  He said that after he started at the Authority last October, Navigant, under an existing contract with the Authority, was asked to conduct a study on the efficacy of the Authority having its own plane.  Navigant’s study found that the Authority plane was used primarily for plant operations, as an efficient way to transport staff to and from the Authority’s far-flung power projects.  Navigant found that it would be far more expensive (potentially twice as expensive, in fact) for the Authority to charter or lease a plane or have operations staff fly commercial.  As a result of Navigant’s recommendations, the Authority’s plane manifests are now more transparent and available than they previously were and a minimum of five passengers (rather than three) are needed to book a flight on the Authority’s plane.  President Kessel said that when he started at the Authority he decided that he would fly commercial whenever possible.  He said that he’s flown to Buffalo 17 times in the past year and that 14 of those flights were on Jet Blue.  He said that only 40% of the 30-40 plane trips he has made in his first year were on the Authority plane, and those flights were primarily to the North Country, to which there are very few, if any, commercial flights.  He said that he wanted to assure the Trustees that the Authority plane is used entirely appropriately.  Vice Chairman Foster said that he wants the public to know that the Authority has strict policies in place regarding use of its plane. 

                President Kessel said that it has been a real pleasure for him to work with the Trustees over the past year. 

 


 

b.       Report of the Chief Operating Officer

 

                Mr. Gil Quiniones submitted the following report:

 

                Strong performance by the Power Authority’s generating facilities continued during July and August, with systemwide production targets exceeded in both months.  The projections have been surpassed in each of the first eight months of 2009.

 

                The Authority achieved a year-to-date monthly high for energy efficiency investment in July, then surpassed that figure in August. In another August highlight, NYPA submitted or supported applications for four projects under the U. S. Department of Energy’s Smart Grid grants programs.

 

                Because the Trustees did not meet in August, this report covers developments over the past two months.

 

Power Supply

Plant Performance

                Systemwide net generation for the year through the end of August was 18,415,659 megawatt hours (MWh), exceeding the projection of 17,506,003 MWh.1, 2

 

                The plants were available to generate electricity 93.3 percent of the time during that period. Their year-to-date unforced capacity rating was 97.8 percent, compared with the target of 98.5 percent.3

 

                There were no significant forced generation outages in July or August.4

               

Performance during the two months:

 

July

 

                Net generation: 2,479,399 MWh (target—2,355,562 MWh)

                Plant availability: 99 percent

                Unforced capacity rating: 99 percent (target—98.5 percent)

 

August

 

                Net generation: 2,446,415 MWh (target—2,292,559 MWh)

                Plant availability: 99.4 percent

                Unforced capacity rating: 99.3 percent (target—98.5 percent)

 

                River flows at the Niagara Power Project in July and August were at historical averages and slightly above normal compared with the long- and short-term forecasts. Flows at the St. Lawrence-Franklin D. Roosevelt Power Project in both months were slightly above historical averages and consistent with the forecasts.

 

Life Extension and Modernization Programs

                 The Life Extension and Modernization (“LEM”) program at the Blenheim-Gilboa Pumped Storage Power Project moved forward on schedule, with work beginning in September on the fourth and final unit.5

 

                The project was removed from service on September 14 to accommodate a dewatering of the upper reservoir that is required for replacement of the spherical valve on the fourth unit.6 The other three units will resume operation following an outage of about seven weeks. Refurbishment of the fourth is expected to continue through next June, when the entire LEM initiative is scheduled for completion.

 

                 At the St. Lawrence-FDR project, work on the 12th of 16 units remained on track for completion in December as part of a LEM program expected to continue through 2013.

 

Transmission Performance

                The transmission reliability rating for the year through the end of August was 97.71 percent, surpassing the projection of 96.64 percent.7 However, the monthly rating for July, in which three forced outages occurred, was slightly below the target.

                The reliability ratings for July and August:

 

                July: 99.37 percent (target 99.40 percent)

                August: 99.82 percent (target 99.64 percent)

 

 

                The July outages, each caused by lightning, occurred on the 765-kilovolt (KV) Massena-Chateauguay line (four hours), the 765-KV Massena-Marcy line (three hours) and the 345-KV Sound Cable Project from Westchester County to Long Island (four hours).

 

                There were no forced transmission outages in August, the third month in the past four in which such events did not occur.

 

                Two scheduled outages in July totaled 61 hours, and five in August extended for 26 hours.


 

Transmission Initiatives

                The initial benefit analysis for a conceptual transmission line to carry power from Canada and upstate renewable energy projects to New York City concluded that the estimated benefits associated with energy sales alone would not be sufficient to cover estimated capital costs.8 Additional benefits from capacity sales or payments through the New York Independent System Operator for reliability improvements will likely be needed.9, 10 As previously reported, Navigant Consulting submitted the analysis in July.

 

                Staff continues to refine the benefit analysis with Navigant and others and to explore alternative methods of cost recovery.

 

                NYPA and National Grid staff members are conducting a combined system planning study that could lead to joint transmission development. At least two potential alternatives have been identified and are being studied.

 

President Kessel and I, along with executives from National Grid, met with officials of Con Edison and the Long Island Power Authority (“LIPA”) to explore their interest in this effort. Both organizations have expressed a desire to explore the technical and economic feasibility of a transmission initiative. A non-disclosure agreement among NYPA, National Grid, Con Edison and LIPA was expected to be completed by late September, enabling Con Edison and LIPA staff to be integrated into the team for the system planning and economic studies.

 

Along with the transmission initiatives, NYPA staff is continuing to review potential arrangements for sales of power from Hydro-Quebec to New York State. I met on September 2 with Richard Cacchione, president of Hydro-Quebec production, and Christian Brosseau, vice president of wholesale markets, to discuss potential transmission project costs and configurations and technical and economic feasibility. I explained that NYPA intended to work with National Grid, Con Edison and LIPA to perform additional studies.

 

NYPA and Hydro-Quebec want to continue to work together on the project, but agree that they need to be creative to address its economic feasibility. H. Q. Energy Services (U. S) Inc., Hydro-Quebec’s marketing arm in the United States, has agreed to provide NYPA with information to advance its economic analyses. 

Organizational Restructuring

                The realignment of the Power Supply Business Group began in August with the creation of a support services organization in White Plains that consists of units engaged in engineering, technical oversight, licensing, environmental matters, safety, project management and technical compliance. The activation of this new organization will continue through the remainder of the year.

 

                Next steps in the realignment will focus on operational interfaces between the Power Generation and Transmission units to identify potential efficiencies.

 

Energy Services and Technology

 

Energy Efficiency Investment

 

                Performance during July and August increased the Authority’s year-to-date investment in energy efficiency projects to $89.6 million and its overhead cost recovery to 99 percent, a jump of 17 percentage points. NYPA is now well positioned to meet the year-end targets of $120 million for investment and 100 percent for overhead cost recovery.

                The figures for July and August:

 

July 

                                            

                Investment: $17.3 million

                Overhead Cost Recovery: 122 percent

 

August

 

                Investment: $19.3 million

                Overhead Cost Recovery: 151 percent

 

Clean Energy Benefits     

                The Authority provided 164,700 megawatt hours (MWh) of clean energy benefits through the end of August, with 38,718 MWh from energy efficiency and 125,982 MWh from renewable energy projects and attributes.11


 

                The figures for July and August:

 

July

 

Total clean energy benefits: 11,806 MWh

                Energy efficiency: 1,806 MWh

                Renewable energy projects and attributes: 10,000 MWh

August

 

Total clean energy benefits: 14,190 MWh

                Energy efficiency: 1,190 MWh

                Renewable energy projects and attributes: 13,000 MWh

 

Energy Efficiency Legislation

                Governor Paterson signed legislation on September 16 that promises to significantly expand the Power Authority’s role in providing energy efficiency services throughout New York State. The new law, long sought by the Authority, clarifies its ability to carry out energy efficiency and clean energy projects at all public facilities in the State and for all participants in its economic development programs “as deemed feasible and advisable by the Trustees.”  It also authorizes NYPA to implement activities related to green building projects that extend beyond electricity use.

 

                In addition, the law facilitates participation in Power Authority programs by affirming that public entities entering into energy services contracts directly with NYPA can rely on its procurement procedures rather than more cumbersome State and local competitive bidding processes.

 

                The Governor also signed legislation authorizing the New York State Office of General Services (“OGS”) to aggregate purchases of renewable energy and renewable energy attributes, as well as electricity from conventional sources, from NYPA and other suppliers for use in State facilities in all parts of New York. This could further expand the role of the Authority, which had previously been authorized to serve OGS facilities only in New York City and Westchester County.

 

Advancing Clean Technologies

                Municipal System and Rural Cooperative Solar Incentive Program—President Kessel joined officials of the state Municipal Electric Utilities Association and the New York Association of Public Power on September 15 in Corning to announce an initiative to promote installation of solar photovoltaic units by residential and business customers and municipal facilities served by the State’s 51 municipal electric systems and rural cooperatives.12, 13 NYPA will fund approximately 50 percent of the installed cost for solar projects of up to 10 kilowatts, with 50 to 80 projects statewide expected to be funded under the program.

 

                University at Buffalo Solar Project—NYPA has presented to the State University of New York at Buffalo an agreement to install a 1.1-megawatt solar project on the University campus. The agreement is based on the results of a competitive solicitation issued by the Authority and provides for about 80 percent of the contract value to go to a Western New York company, Solar Liberty of Williamsville. Upon execution of the agreement, NYPA will complete design and implementation of the project, which is budgeted for a cost of up to $7.5 million and will be one of the largest solar photovoltaic installations on a university campus in the United States.

 

                White Plains Office Fuel Cell—Construction is proceeding on a 200-kilowatt fuel cell adjacent to the Authority’s administrative office building in White Plains. The contractor, Harbour Mechanical, has completed mobilization, erected a construction fence and begun excavation. The project is scheduled for completion in November.

 

Project Development and Management

New York State Department of Corrections, Arthur Kill Correctional Facility (Staten Island)—The first phase of this $7.85 million project will include the replacement of the two existing chillers with two new 550-ton energy-efficient and environmentally friendly electric units, featuring variable-frequency drives for optimal efficiency.14, 15 The work will also entail an electrical upgrade, replacement of the existing cooling tower and installation of three new condenser water pumps.16 Annual savings of $255,000 and avoidance of 965 tons of annual carbon dioxide emissions are projected. The customer has signed the initial Customer Installation Commitment and the project is moving into construction.17

 

New York State Office of General Services, Empire State Plaza—This $9.5 million project calls for installation of a new, efficient steam turbine to drive one of the 4,500-ton chillers serving the Empire State Plaza in Albany, retubing of condensers and installation of an electric compressor to allow for electric operation of the chiller when economically beneficial.18 Annual savings of $1.3 million are expected, along with a yearly reduction of about 10,765 tons in carbon dioxide emissions. The contract has been executed and the project is moving into construction.

 

Nassau County LED Project—Incandescent traffic signals at about 1,400 intersections on roads administered by Nassau County will be replaced with efficient light-emitting diode technology under this $11.2 million project.19  The initiative is expected to save $1 million a year and reduce annual carbon dioxide emissions by 4,900 tons.  The construction contract has been sent to the customer.

 

Construction

                City University of New York, Brooklyn College—Work is three months ahead of schedule on this $7.1 million project to install steam traps and thermostatic controls at Brooklyn College.20, 21 The project is expected to save $750,000 annually.

 

                New York City Department of Environmental Protection, Red Hook (Brooklyn)—NYPA is currently managing this $36 million project at the Red Hook Water Pollution Control Plant that entails the replacement of the existing emergency generators with two new 2.6-megawatt generators and the installation of three 27-kilovolt and four 5-kv switchgears.22 NYPA’s contractor completed installation of the outdoor battery house’s heating, ventilation and air-conditioning unit in August, and the roof of that facility is scheduled to be completed in October. Generator submittals are being reviewed for release and fabrication of equipment by October.

 

                State University of New York College at Purchase—This multifaceted $11.8 million project is proceeding on several fronts. Installation of an air-handling unit, three new chillers and two exhaust fans was completed in August. All 12 ice storage tanks involved in the project have been set on concrete pads. A new 1,200-amp disconnect switch was installed in the existing switchgear substation.23, 24 Other electrical, mechanical and duct work is ongoing. The project is expected to provide annual savings of about $480,000.

 

 

Marketing and Economic Development

North Country Stimulus Plan

 

                The Authority is working with National Grid and New York State Electric and Gas to implement a discount on the utilities’ bills to commercial and industrial customers eligible for inclusion in NYPA’s Temporary North Country Electricity Stimulus Plan. Both utilities are cooperating, but have indicated that they will need additional time to program their billing systems to accommodate the credits.

 

Corporate Services and Administration

Human Resources

                Staff continues to implement organizational, process and technology solutions recommended in the assessment by NYPA’s consultant, Scott Madden. As anticipated, a new compensation plan and policy were recommended to the Trustees at their July 28 meeting.

 

Fleet Management

 

                Net sales of $232,000 resulted when the Fleet Management group participated in its first fleet disposal auction under a new three-year contract with J. J. Kane Auctioneers. The auction was held on August 29 at National Grid’s Rome, NY, facility. The NYPA sales consisted of cars, pickup trucks, medium- and heavy-duty trucks, off-road and construction equipment and miscellaneous fleet items.

 

Information Technology

 

                Staff successfully replaced the previous employee time entry system (TESS) with the SAP CATS system, providing greater compatibility and integration with SAP financial data services.25

 

                An Enhanced Data Management Initiative was completed in August, including replacement of the previous data warehouse with more advanced business intelligence technology.26 The change will improve access to information from SAP and other sources in a single warehouse environment.

 

                The Data Management Initiative also featured completion of a new Enterprise Business Warehouse design and acquisition of new desktop tools for enhanced access to information. In addition, SharePoint, a new technology enabling multiple Intranet users to simultaneously access the same data, was introduced.

Real Estate

 

                After an extensive search and negotiations, Real Estate staff completed the purchase of a 10.3-acre Buffalo site for warm-weather storage of the Lake Erie-Niagara River ice boom. The property, at 41 Hamburg St., was previously owned by Killian Bulk Transport Co. Acquisition of the new site will enable the Power Authority to convey the previous storage area to the Erie Canal Harbor Development Corp., promoting revitalization of the Buffalo waterfront. NYPA had agreed to seek a new storage site as part of a 2006 agreement with Buffalo and Erie County related to relicensing of the Niagara Power Project.

 

Procurement

 

                Thanks to a significant increase in contracts with minority- and women-owned businesses, it is anticipated that such firms will account for at least 12 percent of applicable NYPA contract awards during the third quarter of this year.27 That would be double the annual goal.

 

                NYPA and National Grid will sponsor their first joint purchasing exchange for minority- and women-owned businesses on October 20 in Buffalo. The event, like those the Authority has hosted by itself for nearly two decades, will enable business owners to interact with prospective clients in the public and private sectors.

 

Corporate Support Services

 

                Occupancy of the Authority’s new Buffalo Office at 95 Perry St. was scheduled for September 22. The facility will be used by Energy Services and Community Affairs staff.

 

                With NYPA’s lease at the New York Office expiring in about a year, requirements for replacement space have been identified, a survey of available space received and tours of possible locations planned.

 

                In a significant development related to the Authority’s Business Continuity Plan, staff has tested a new Emergency Notification System to advise NYPA employees by telephone of emergencies affecting the Authority’s facilities. Work is continuing on a longer-term solution, which will be recommended to the Trustees by year end.

 


 

Power Resource Planning and Acquisition

Great Lakes Offshore Wind Project

                NYPA has engaged two New York State consultants—AWS Truewind of Albany and Hatch Acres Corporation of Amherst­—to carry out assignments in connection with the Great Lakes Offshore Wind Project.

 

AWS will summarize the issues raised in the responses received in June to the Request for Expressions of Interest (“RFEI”) and will perform preliminary site selection.28 (The RFEI was issued on Earth Day, April 22.)  Hatch will carry out preliminary interconnection studies in coordination with the site selection process. Staff is preparing to brief management on major issues to be resolved before release of a Request for Proposals (“RFP”), planned for November.29

 

Long Island-New York City Offshore Wind Project

 

                More than 30 responses to the Request for Information, which had been issued in June, were received by the August 31 deadline.30 The project team plans to issue a summary of the findings from those responses within several weeks. An RFP from potential developers is anticipated by the end of the year.

 

Office of the Chief Operating Officer

State Energy Plan

                On August 10, the State Energy Planning Board released the draft State Energy Plan for public review and comment. The record will remain open for 60 days, and nine hearings were to be conducted Statewide through September 26.

 

                NYPA staff participated in the Energy Coordination Working Group that drafted the plan and will continue to work with the group to implement revisions resulting from the public comments.

 

Governor’s Environmental Justice Task Force

 

                NYPA is one of 14 public agencies and authorities that are members of Governor Paterson’s Environmental Justice Task Force. Each participant provided a draft Environmental Justice Action Plan for public comment; NYPA received no comments or requests for revisions. The Governor’s office will compile the draft plans into a comprehensive final plan.

 

                Because there were no suggested revisions to its draft plan, the Authority can implement its proposed initiatives prior to issuance of the final plan. Environmental Justice Coordinator Sobeida Cruz is working with environmental justice organizations in target communities to plan clean energy and pollution mitigation programs.

 

Federal Stimulus Package

 

                The Power Authority submitted two applications in August for Smart Grid grants offered by the U. S. Department of Energy (DOE) as part of the federal economic stimulus package.

 

 A Smart Grid Investment Grant would be used for upgrades to the convertible static compensator (“CSC”) at the Frederick R. Clark Energy Center in Marcy, and a Smart Grid Demonstration Grant would help fund dynamic thermal circuit-rating technology that will enable real-time capacity monitoring on three 230-kilovolt (“KV”) NYPA transmission lines in Northern New York—Moses to Willis, Willis to Ryan and Moses to Adirondack.31 The CSC upgrade has progressed to the second step in the DOE evaluation process, in which the merits of a proposal are evaluated. The other application remains in Phase 1, which focuses on the completeness of the submittal.

 

As noted in the July report to the Trustees, staff had planned to seek grants for the CSC project and for replacement of the two synchronous condensers at the St. Lawrence-FDR project.32 However, it was determined that funding available under the Smart Grid program would not be sufficient to justify the synchronous condenser initiative, so an application was submitted for the demonstration grant for the circuit-rating technology.

 

                In addition to its own submissions, NYPA supported the New York Independent System Operator’s grant application for transmission upgrades and an application from Hudson Transmission Partners to help fund the converter station for its proposed 345-KV transmission connection from New Jersey to New York City.33

                DOE decisions on the applications are expected by the end of October.

 

                The Power Authority has also been selected to help implement stimulus funding for several clean transportation projects. These include procuring three electric and five hybrid-electric vehicles for the State University of New York at Albany, working with the Electric Power Research Institute to obtain plug-in hybrid trucks for 10 NYPA energy services customers and participating in an electric and plug-in hybrid vehicle program led by the Ford Motor Co.34

 

Anticipated Developments Over the Next Six Months

Power Supply

Poletti Project Shutdown

                The shutdown of the Charles Poletti Power Project in Queens is scheduled for January 31, 2010, under a 2002 agreement with environmental groups and government agencies. Staff will work in the intervening period to transfer some Poletti employees to the adjacent 500-megawatt combined-cycle plant and to secure benefits for other project staff members through legislation or other means.

 

GLOSSARY

 

1 Net generation—The energy generated in a given time period by a power plant or group of plants, less the amount used at the plants themselves (station service) or for pumping in a pumped storage facility.

 

2 Megawatt hour—The amount of electricity needed to light ten thousand l00-watt light bulbs for one hour.  A megawatt is equal to 1,000 kilowatts and can power about 800 homes, based on national averages.

 

3 Unforced capacity rating—All power plants have an installed capacity, or ICAP, meaning the amount of power they could generate under perfect conditions.  Since conditions are not always perfect and plants are shut down, there is a second measurement, called the unforced capacity, or UCAP, which is how much power a plant actually can produce.  For New York State power plants, this measurement is influenced by the amount of time a plant is forced out of service when it is called into service through the New York Independent System Operator to provide energy.

 

4 Outage—The removal of a power plant or transmission line from service.  Outages may be scheduled for purposes such as anticipated maintenance, or forced by unexpected events.  A significant forced or emergency outage of an individual generating unit is an event of more than 72 hours in duration, entailing a repair cost of more than $75,000 or resulting in more than $50,000 of lost revenues.  A significant forced or emergency outage of an individual transmission line is an event that directly affects the reliability of the state’s transmission network, or the availability of any component of the network, for more than eight hours or has a repair cost of more than $75,000.

 

5 Life Extension and Modernization program—A major initiative by the Power Authority to ensure that a particular power project operates at maximum efficiency far into the future.  In Life Extension and Modernization programs currently under way at the St. Lawrence-Franklin D. Roosevelt and Blenheim-Gilboa projects, the turbines are being replaced and the generators and other components significantly refurbished.

 

6 Spherical valve—A component at the bottom of the powerhouse that receives water that has surged downward from the Blenheim-Gilboa project’s upper reservoir and releases it to spin a turbine-generator to produce electricity.  The project has four spherical valves, one for each of its four pump-generating units.  Each spherical valve is about nine feet in diameter and can be closed within 30 seconds if necessary to shut off water from the upper reservoir.

 

7 Transmission reliability rating—A measurement of the impact of forced and scheduled outages on the statewide system’s ability to transmit power.

 

8 Energy sales—Energy, expressed in megawatt hours, is the amount of electricity consumed over time.

 

9 Capacity sales—Capacity, expressed in megawatts, is an hourly rate of electricity consumption.

10 New York Independent System Operator—A not-for-profit organization that operates New York State’s transmission system, administers the state’s wholesale electricity markets and engages in planning to ensure the future reliability of the statewide power system.

 

11 Renewable energy attributes—The environmental, social and economic features of renewable energy that may be sold separately from the energy itself; NYPA obtains such attributes on behalf of its New York City governmental customers.

 

12 Municipal Electric Utilities Association—An organization established in 1930 that includes 40 of New York State’s 47 municipal electric systems.

 

13 New York Association of Public Power—An organization established in 2005 that includes nine municipal electric systems and all four of the state’s rural electric cooperatives.  Two municipal systems—the Town of Massena and the City of Salamanca—belong to both the New York Association of Public Power and the Municipal Electric Utilities Association.

 

14 Electric chiller—Equipment used to produce chilled water to air-condition spaces within buildings.

 

15 Variable frequency drives—Devices that control the speed of a motor (such as on a pump) by regulating the frequency of the power supply to the motor.  (Frequency is the number of cycles per second through which an alternating current passes as it travels in one direction and then the other.  The standard frequency in the United States is 60 cycles per second.)

 

16 Condenser water pumps—Components that circulate and remove the excess heat from condenser water.  Condensers remove heat from a chilled water system in order to maintain a specified cold-water temperature.

 

17 Customer Installation Commitment—An agreement by a participating customer authorizing NYPA to proceed with implementation of an energy efficiency project.  If a customer elects to terminate a project after executing the agreement, it will be obligated to reimburse the Authority for all expenses incurred to that point.

 

18 Electric compressor—An electrical component of a refrigeration or cooling system that increases the pressure and temperature of a gaseous refrigerant by reducing its volume.

 

19 Light emitting diode—A transistor-type device that emits light when voltage is applied. LEDs are used for such purposes as electric lighting, traffic signals and displays on digital watches.  They offer many advantages over traditional light sources, such as lower energy consumption, longer lifetime and the fact that they are mercury-and lead-free.

 

20 Steam traps—Devices used to discharge condensate and non-condensable gases from a steam system while not permitting the escape of live steam.

 

21 Thermostatic controls—Devices used to vary temperature conditions within spaces.

 

22 Switchgears—Components used to isolate electrical power from equipment to permit testing or maintenance of the equipment.

 

23 Amp (or ampere)—The unit of measurement of electric flow.

 

24 Disconnect switch—A device used to start and stop the flow of electricity.

 

25 SAP CATS system—SAP is a German company whose name translates as Systems, Applications and Products in Data Processing.  The company’s Cross Application Time Sheet (CATS) can by used by employees or personnel administrators to track employee working times.  Time data is recorded along with information referring to such items as work orders and cost centers and can be transferred to corresponding SAP applications and components.

26 Data warehouse—A repository of an organization’s electronically stored data.

 

27 Applicable contract awards—The reportable expenditures that are used to calculate the percentage value of the contracts awarded to minority- and women-owned firms.  Specialty procurements such as major power plant components and natural gas are excluded from this category.

 

28 Request for Expressions of Interest—A document issued to prospective vendors and contractors in the early phases of a project to obtain preliminary information on the nature and cost of the services they can provide and to determine their potential interest in bidding on the project.

 

29 Request for Proposals—A formal solicitation of bids for a project; it may or may not be preceded by a Request for Expressions of Interest or a Request for Information.

 

30 Request for Information—A document issued to prospective vendors and contractors in the early phases of a project to obtain preliminary information on the nature and cost of the services they can provide.

 

31 Convertible static compensator—A sophisticated device for controlling voltage and power flows on transmission lines to increase the capability of an existing transmission system.  In a pioneering effort, NYPA completed installation of the $54 million convertible static compensator in 2004 at the Clark Energy Center’s Marcy Substation as the most advanced of a series of technologies known as FACTS, for Flexible Alternating Current Transmission Systems.  The project, which also included the addition of conventional equipment at other substations, boosted the capability of the New York State system by nearly 200 megawatts without the need to build new lines.  NYPA’s convertible static compensator was the first transmission control device in the world to permit the instantaneous transfer of power between two lines in the same substation.

 

32 Synchronous condensers—Motors that help to support voltage at a specified level.

 

33 Converter station—A facility in which electricity is converted from alternating current to direct current, or from direct to alternating.  For the Hudson Transmission Partners project, a converter station in Ridgefield, N.J., will convert up to 660 megawatts of alternating current power to direct current, then back to alternating current for transmission to New York City.  The station as planned will incorporate multiple smart grid aspects to provide control and monitoring functions to grid operators, the Power Authority and Con Edison.

 

34 Electric Power Research Institute—The electric power industry’s international research and technology organization.  The Power Authority has long been active in EPRI and has collaborated with the organization on a number of major initiatives.

 

                Trustees Curley and Nicandri thanked Mr. Quiniones for his in-depth monthly report, saying that the efficiency rates of the Authority’s power plants were outstanding and that the people who work at the plants are to be commended.  Mr. Quiniones said that the Authority’s LEM programs had a lot to do with its assets performing superbly.  He said that the last unit at Blenheim-Gilboa is being fixed, the 12th unit at St. Lawrence is being worked on and the last LEM program at the Lewiston Pump Generating Plant would begin early next year.  Mr. Quiniones credited Mr. Edward Welz and his team for their work on these projects.


 

c.        Report of the Chief Financial Officer

 

In response to a question from Vice Chairman Foster, Mr. Russak said that the Authority is fully hedged with regard to the fluctuating Westchester County governmental customer rates because its costs are passed along to those customers.  He said that the Westchester County customers represent 5-10% of the Authority’s revenues from its Southeastern New York (“SENY”) governmental customers, with the New York City governmental customers accounting for 90-95% of the Authority’s SENY revenues.  Mr. Russak said that the lower market prices that are expected to prevail through the end of the year are somewhat offset by the lower prices being paid by the Authority for purchased power; however, the projected revenues at year’s end are expected to be slightly below the budgeted revenues due to the softer economy and the extension of the PFJ program, each of which account for about half of the projected shortfall.

                Responding to another question from Vice Chairman Foster, Mr. Russak said that, according to the latest projections, production at Niagara and St. Lawrence is expected to be about 5% above the long-term average into next year.  He said that these projections depend on the weather and that the Authority closely tracks Army Corps of Engineers data in this regard. 

 

 

 


 

3.             Allocation of 22,725 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 18,725 kW to Steel Development Company, LLC and an allocation of available Expansion Power (‘EP’) totaling 4,000 kW to Metaullics Systems, Division of Pyrotek, Inc.  In addition, the Trustees are requested to adjust an allocation previously awarded to Metaullics Systems as discussed below.

 

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 (‘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. 

 

“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 the 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 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

 

                “At their meeting of March 28, 2006, the Trustees approved a 1,200 kW allocation of RP to Metaullics Systems in return for a commitment to add 19 new jobs.  After the allocation was awarded, the company reduced the scope of its expansion project.  As a result, all of the new jobs did not materialize as promised.  Staff is requesting that the Trustees reduce Metaullics’ allocation and job commitment to 500 kW and eight positions, respectively.

               

                “Staff recommends and the Advisory Group supports the available power being allocated to Steel Development Company and Metaullics Systems as set forth in Exhibit ‘3-A.’  The Exhibit shows, among other things, the amount of power requested the recommended allocation and additional employment and capital investment information.  Steel Development Company will site a technologically advanced steel recycling and production facility in western New York.  The company will invest $200 million in the facility, which will create 200 jobs with average wages and benefits of $50,000.  Obtaining low-cost power was crucial to this project being sited in New York, as power is a little more than 25% of product cost. 

 

                “The Metaullics Systems expansion project will result in the creation of 48 jobs, with a related jobs-per-MW ratio of 12.  The project will also require capital investment of $19.1 million that will result in a capital-investment-per-MW ratio of $4.8 million.  Electricity is 18% of production costs.  Metaullics is the only American source for the graphite powders used in the production of lithium batteries for hybrid automobiles, a green industry.   These projects will help maintain and diversify the industrial base of Western New York and provide new employment opportunities. 

 

                “Additional information on the projects is contained in the attached application summaries.

 

RECOMMENDATION

 

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve allocations of 18,725 kW of hydropower to Steel Development Company, LLC and 4,000 kW of hydropower to Metaullics Systems, Division of Pyrotek, Inc., as listed in Exhibit ‘3-A.’  In addition, it is requested that the Trustees reduce the power allocation and jobs commitment for a prior allocation to Metaullics Systems to 500 kW and eight jobs, respectively. 

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Acting Senior Vice President – Marketing and Economic Development and I concur in the recommendation.”

 

                Mr. James Pasquale presented the highlights of staff’s recommendation to the Trustees.  President Kessel said that Mr. Pasquale and his staff had done an extraordinary job for Western New York in negotiating the deal with Steel Development.  He said that in the last year, the Authority’s economic development power programs had brought 1,050 jobs to and retained 1,030 jobs in Western New York (not including Steel Development).  Trustee Curley said that National Public Radio had done a story this morning on Steel Development locating to Western New York, saying that the deciding factor had been the Authority’s power allocation.  Mr. Pasquale thanked Mr. Kessel and Trustee Curley for their kind words and said that he wanted to publicly thank Mr. Michael Huvane and his staff, Mr. Anthony Savino and his staff, Ms. Marilyn Brown and her staff and Mr. Michael Lupo and his staff for the critical roles they played in developing this project.  He also thanked Mr. Russak and said that ESDC had helped, too.  Trustee Elise Cusack thanked Authority management and staff for ignoring the critics to get the job done, saying that this was a huge deal for Western New York and that it had made the front page of the Buffalo News.  Vice Chairman Foster said that bringing 200 $50,000-a-year jobs to any community in New York State was an impressive accomplishment.  Chairman Townsend said how gratifying it is when Authority staff accomplishes something so significant.

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

 

                                RESOLVED, That the allocations of 18,725 kW of Replacement Power and 4,000 kW of Expansion Power, as detailed in Exhibit “3-A,”  be, and hereby are, approved on the terms set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

                                RESOLVED, That the power allocation and jobs commitment for an allocation previously awarded to  Metaullics Systems be reduced to 500 kW and 8 positions, respectively; and be it further

 

                                RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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

Expansion Power

 

Company:                               Metaullics Systems, Division of Pyrotek, Inc.

 

Location:                                Sanborn

                                                         

County:                                   Niagara

 

IOU:                                        National Grid

 

Business Activity:                   Manufacturer of graphite powder

 

Project Description:               The planned expansion at this site will provide the only U. S. - based processed graphite for anodes in lithium-ion batteries for hybrid automobiles. The project includes a 72,600 square foot expansion with the addition of graphite furnace capacity and other processing equipment.  The capacity added by this expansion will be directed entirely to the processing of graphite powders for use in lithium-ion battery production for hybrid automobiles.

 

Prior Application:                  Yes

 

Existing Allocation:                500 kW of RP

 

Power Request:                      4,000 kW

                                                  

Power Recommended:           4,000 kW

 

Job Commitment:     

               Existing                       6 jobs

               New                             48 jobs

                                                         

New Jobs/Power Ratio:          12 jobs/MW

 

New Jobs -

Avg. Wage and Benefits:        $47,000

 

Capital Investment:                $19.1 million

 

Capital Investment                   $ 4.8 million/MW

Per MW

 

Summary                                If hydropower were not available for this expansion, the project would likely be relocated to another state.  As a result of the cost benefits of hydropower, Metaullics can expand and process materials in Western New York.  The company is working with Niagara County IDA on other project incentives.  In addition, this expansion project is slated to receive federal stimulus funding if it moves forward.


 

APPLICATION SUMMARY

Replacement Power

 

Company:                                 Steel Development Company, LLC

 

Location/                                         

County:                                    Within 30 miles of Niagara Power Project

 

IOU:                                          National Grid

 

Business Activity:                      Operates steel recycling and production facility

 

Project Description:                  The project plan includes building a technologically advanced steel recycling and production facility.  The project includes a melt shop/refractory building, a rolling mill and a set-up shop, as well as a warehouse and administrative area.  New equipment installed will include an electric arc furnace, a metal furnace, a rolling mill and auxiliary equipment.

 

Existing Allocation:                  None

 

Power Request:                         35,000 kW

                                                  

                                                  

Power Recommended:              18,725 kW

 

Job Commitment:     

               Existing:                          0 jobs

               New:                            200 jobs

                                                         

New Jobs/Power Ratio:            11 jobs/MW

New Jobs -

Avg. Wage and Benefits:          $50,000

 

Capital Investment:                  $200 million

 

Capital Investment per MW:   11 million/MW

 

Summary:                                 Steel Development is charged with building several steel scrap recycling plants that produce rebar.  Energy is by far the highest project cost.  Locating this mill in New York State is dependent on low-cost power.  A hydropower allocation would make this project viable in Western New York, attracting customers from around the world.  The company is considering constructing this plant at other sites, including Missouri, North Carolina and Texas.

 


 

4.             Municipal and Rural Electric System Cooperative Customers – Expanded Energy Efficiency and Weatherization Program  

 

 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize weatherization measures to be included in the Statewide Energy Services Program (‘Statewide ESP’) for the benefit of the Authority’s 51 Municipal and Rural Electric Cooperative customers (‘Munis/Co-ops’) and these systems’ customers.  The Munis/Co-ops will implement their own energy efficiency programs with their customers using Authority financing.  All Authority costs will be recovered directly from each participating Muni/Co-op.

 

                “The Trustees are also requested to authorize the distribution of energy efficiency weatherization ‘EcoKits’ to low-income residents of 11 Westchester County housing authority developments and 11,000 New York City Housing Authority (‘NYCHA’) residents who pay their own utility bills.  This weatherization program will be similar to the 2008 Weatherization Blitz Program for the low-income residents of the Munis/Co-ops approved by the Trustees at their September 23, 2008 meeting.  Program funding was approved at that time for up to $5 million; of that amount, only $1.1 million was expended for the Muni/Co-op program.  The Trustees are now requested to approve funding for up to $750,000 to implement the 2009 program for Westchester County housing authority tenants. 

 

BACKGROUND

               

“Since the 1980s, the Authority through its Energy Services Programs (‘ESP’) has offered various types of energy services and clean energy technology programs to participants throughout the State to help them lower their energy usage and/or achieve cleaner and more energy-efficient use of energy and natural resources.

 

                “At their meeting of May 23, 2006, the Trustees authorized the inclusion of the Authority’s 51 Muni/Co-op customers in the Statewide ESP.  Pursuant to this authorization, each Muni/Co-op can launch and administer its own energy efficiency programs with its residential and non-residential customers and finance projects implemented under such programs with funds borrowed from the Authority.  Each Muni/Co-op is contractually responsible for repaying the Authority for the financing.  The Authority also provides program review, analysis of savings estimates and technical assistance, as needed.  Several Munis/Co-ops implemented programs with their electric customers using the Authority’s low-cost financing.

 

                “At their meeting of September 23, 2008, the Trustees approved up to $5 million in funding to provide home weatherization kits for low-income residential customers of the Munis/ Co-ops.  The Authority purchased the kits, which were then distributed at no cost to all 51 Munis/Co-ops.  The Munis/Co-ops distributed the kits to eligible customers to help decrease home heating costs for the winter of 2008-09.  A total of 22,971 kits were distributed across the State.  The Weatherization Blitz Program received a great deal of positive feedback from the Munis/Co-ops and their residential customers. 

 

DISCUSSION

 

Inclusion of Measures under Statewide ESP for Muni/Co-op Customers

               

                “The Authority has been asked to expand the list of eligible measures that may be financed under the Statewide ESP for the Munis/Co-ops to include weatherization measures.  If approved by the Trustees, the addition of weatherization measures such as attic and crawl space insulation, sidewall insulation, pipe and/or duct insulation, air sealing to reduce infiltration, home and business energy audits and other measures that help reduce thermal loss will enable the Authority to further help customers participating in the Muni/Co-op ESP programs reduce energy consumption and lower their electricity bills.  The Statewide ESP program will be available to all Munis/Co-ops that participate and sign a cost-recovery agreement with the Authority committing the Muni/Co-op to repay the Authority for any financing provided for eligible ESP project(s).

               

“The Authority’s role will be to review the program designed by each Muni/Co-op to ensure that the ESP measures offered are consistent with the measures authorized under the Statewide ESP; analyze savings estimates; provide technical assistance, as needed and provide low-cost financing to the Muni/Co-op.  Each Muni/Co-op will have an opportunity to expand its current programs by choosing which project(s) it wants to implement.

 

Westchester County Housing Authority and NYCHA Weatherization Kit Program

               

“The Trustees are also asked to authorize the distribution of approximately 20,000 energy efficiency weatherization ‘EcoKits’ to residents of 11 Westchester County housing authority developments and the residents of NYCHA developments who pay their own utility bills.  As discussed above, in 2008, the Trustees approved up to $5 million to implement the 2008 Weatherization Blitz Program for Muni/Co-op low-income residential customers.  Nearly 23,000 kits were provided to low-income residents in need of assistance to meet the costs of heating their homes.  A similar program is being developed for the 2009 heating season to benefit Westchester County housing authority residents and NYCHA residents who pay their own utility bills.   If authorized by the Trustees, approximately 20,000 mini kits will be distributed consisting of shrink-fit window kits, wall switch and outlet gaskets, faucet aerators, a low-wattage nightlight to reduce lights being left on all night, a pamphlet outlining ways to save energy throughout an apartment and three compact fluorescent bulbs.  The estimated cost for the kits is $750,000.  After discussions with the housing authorities, staff determined that this program would help kick off energy awareness programs to reduce overall energy usage at these facilities.  An average annual savings of $25 per apartment will total $500,000 in energy savings. 

 

FISCAL INFORMATION

 

                “The funding for the weatherization measures to be included in the Statewide ESP for the benefit of the Authority’s Munis/Co-ops and their customers will be provided through Authority financing options previously approved by the Trustees for Statewide ESP.  All Authority costs, including Authority overheads, will be recovered from the individual participating Muni/Co-op, similar to other Energy Services and Technology programs.  The use of Petroleum Overcharge Restitution (‘POCR’) funds for these measures is not contemplated at this time.

 

“The funding for the Westchester County/NYCHA ‘Eco-Kit’ Program will be from the Operating Fund.  The Trustees previously approved funding of up to $5 million in September 2008 for a similar program with the Munis/Co-ops.  At project closeout in May 2009, a total of $1.1 million had been invested in the Muni/Co-op Weatherization Blitz Program.  The estimated cost for the new program is $750,000 for 20,000 kits to be distributed to Westchester County housing authority residents and NYCHA residents who pay their own utility bills. 

 

RECOMMENDATION

 

                “The Senior Vice President – Energy Services and Technology recommends that the Trustees approve the inclusion of weatherization measures in the Statewide Energy Services Program for the Municipal and Rural Electric Cooperative customers.  The Trustees are also requested to approve funding for the Westchester County housing authority/New York City Housing Authority weatherization program.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Acting Senior Vice President – Marketing and Economic Development and I concur in the recommendation.”

 

                Ms. Maribel Cruz presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Vice Chairman Foster, Ms. Cruz said that staff from Energy Services and Technology had worked very closely with staff from Marketing and Economic Development to calculate the number of kits that should be made available to the municipal and rural electric cooperative low-income customers.

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

 

RESOLVED, That the Trustees authorize inclusion of weatherization measures as described in the foregoing report of the President and Chief Executive Officer in the Statewide Energy Services program for the Authority’s 51 Municipal and Rural Electric Cooperative customers for the benefit of these systems and their customers; and be it further

 

RESOLVED, That the Trustees authorize the funding of the Westchester County housing authority/New York City Housing Authority Eco-Kit weatherization program as described in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That Operating Fund monies be used to finance the weatherization measures under the previously approved Statewide Energy Services Program funding and the Westchester County housing authority/New York City Housing Authority ‘Eco-Kit’ program in the amount and for the purpose listed below:

                                                                                                                                                                                                Expenditure Authorization

Operating Funds                                            (not to exceed)

                                                                                                                                Purchase and distribution

of ‘Eco-Kits’                                                        $750,000

     TOTAL            $750,000

 

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating 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 and General Counsel.


 

5.         Niagara Power Project – Ice Boom Storage Project – Capital Expenditure Authorization  and Site Development Contract Award              

                

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize capital expenditures in the amount of $23.9 million and approve the award of a contract to UCC Constructors, Inc. (‘UCC’) of West Seneca, New York, in the amount of $5,879,390 for site development of the Ice Boom Storage Project (‘Project’) located at the Killian site for the Niagara Power Project.

 

                “To provide the additional time required to perform critical construction components prior to winter, interim approval for the site development contract award was authorized in August 2009 by the President and Chief Executive Officer in accordance with the Authority’s Guidelines for Procurement Contracts. 

 

BACKGROUND

 

                “In accordance with the Authority’s Expenditure Authorization Procedures, the award of non-personal services contracts in excess of $3 million and contracts exceeding a one-year term requires the Trustees’ approval.

 

                “The Niagara River Ice Boom (‘Ice Boom’) operation is a critical component of the Niagara Power Project in Lewiston.  Since 1964, the Ice Boom has been installed in the late fall and removed in the spring of each year.  When installed, the Ice Boom spans approximately 8,800 feet across the outlet of Lake Erie and reduces the amount of ice being released from Lake Erie into the Niagara River.

 

“The Authority presently stores the Ice Boom at 175 Fuhrmann Boulevard in Buffalo, adjacent to the existing Times Beach site, during the off-season (from mid-spring to late fall).  As part of the City of Buffalo and Erie County Relicensing Agreement with the Authority dated June 27, 2006, the Authority agreed to ‘commission a consultant to produce a feasibility study’ regarding relocation of the Ice Boom and to ‘diligently seek to relocate the ice boom to an alternate site.’  The Authority conducted an extensive search to procure an alternate site and received approval from the Trustees at their meeting of March 31, 2009 to purchase the Killian site at 41 Hamburg Street in Buffalo for the purpose of relocating the Ice Boom storage operations.  The Killian site requires extensive modifications to meet both the Authority’s operational needs and requirements set by local officials.

 

DISCUSSION

 

                “In 2008, funding in the amount of $750,000 was approved for Hatch Acres Corporation to perform the detailed engineering and permitting required for development of the Killian property as the alternate site for Ice Boom storage.  In 2009, as the scope of work progressed and discussions with local officials continued, an additional $1.9 million was authorized for Hatch Acres to complete the detailed engineering and design, prepare bid documents and provide engineering support services during procurement and construction for all phases of the Project.

 

“With the site development design complete, construction at the site will occur in a sequential manner:  the site will be developed from the fall of 2009 through the spring of 2010 in anticipation of Ice Boom storage in April 2010; a maintenance facility will be constructed by the fall of 2010; a boat rail system will be constructed by the spring of 2011 and a public park, including a boathouse facility and canoe/kayak launch, will be developed by the end of 2011.

 

“Approvals of the Project and site development contract award are the first steps in relocating the Ice Boom.  Negotiations for a winter mooring site for Authority vessels used for in-service maintenance of the Ice Boom are also under way; the Trustees will be asked to approve the winter mooring site once a plan has been finalized.

 

               


 

“The total Project cost is estimated at $23.9 million, as follows:

 

                                Preliminary Engineering and Design                                $     400,000

 

                                Detailed Engineering, Design and Permitting                  $  3,024,000

 

                                Killian Site Procurement                                                    $  1,040,000

 

                                Total Construction/Installation                                        $17,550,000

 

                                Authority Indirect and Direct Expenses                          $ 1,886,000

 

                                TOTAL                                                                                  $23,900,000

 

SITE DEVELOPMENT CONTRACT

 

                “The Authority issued an advertisement to procure bids for site development in the New York Contract Reporter and bid packages were available as of June 22, 2009.  The bid documents were downloaded by 91 potential bidders and 19 potential bidders participated in a site visit on July 16, 2009.

               

“The following seven proposals were received on July 29, 2009:

 

                Bidder                                                                           Location                                               Lump Sum

 

                UCC Constructors, Inc.                                              West Seneca, NY                                 $5,879,390

 

                Man O' Trees, Inc.                                                       West Seneca, NY                                 $6,012,690

 

                BidCo Marine Group                                                  Grand Island, NY                                $6,930,645

 

                LP Ciminelli Construction Corp.                                Buffalo, NY $                                      6,957,678

 

                Scrufari Construction Corp.                                      Niagara Falls, NY                                $7,093,180

 

                Gerace Construction Co., Inc.                                   Midland, MI $                                      9,147,313

               

                Sicoli & Massaro, Inc.                                                Niagara Falls, NY                                $9,603,806

               

                “The proposals were reviewed by an evaluation committee comprising staff from Niagara General Maintenance, Environmental, Procurement and Project Management, as well as the Authority’s consultant, Hatch Acres Corporation. 

 

                “UCC’s bid was the lowest in price and was also technically acceptable.  UCC, which has extensive experience in general construction and projects of this magnitude and demonstrated knowledge of the scope of work, is capable of completing the Project in a timely manner.  Accordingly, staff recommends award of this contract to UCC.

 

                “Funding in the amount of $5.2 million has been included in the 2009 approved Capital Budget.  Future-year funding will be included in the Capital Budget requests for those years.

 

FISCAL INFORMATION

 

                “Payment associated with this Project will be made from the Authority’s Capital Fund.

 


 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Vice President – Procurement, the Vice President – Engineering, the Regional Manager – Western New York and the Project Manager recommend that the Trustees authorize capital expenditures of $23.9 million and award of a contract to UCC in West Seneca, New York for $5,879,390 to complete site development for the Niagara Ice Boom Storage Project.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Engineer – Power Supply and I concur in the recommendation.”

 

Mr. John Canale presented the highlights of staff’s recommendations to the Trustees. 

President Kessel thanked Trustee Curley for coming to the groundbreaking event for this project last week.  He said that this was a great project for the Authority, as well as the local community, since it freed up the former ice boom storage site to provide access to Buffalo Harbor.  President Kessel said that the new ice boom storage site would also incorporate a 1.3-acre park with access to the river.  He said that the project work was going to be performed by a local company and thanked Mr. Canale, Mr. Finnegan, Mr. Lou Paonessa and all of the other Authority staff who had worked so hard to make this happen.  Chairman Townsend added his thanks, noting that local officials had been active participants in the process. 

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

 

RESOLVED, That expenditures are hereby approved in accordance with the Authority’s Expenditure Authorization Procedures, for capital expenditures in the amount of $23.9 million and a contract award to UCC Constructors, Inc. of West Seneca, New York for $5,879,390 to complete site development of the Niagara Ice Boom Storage Project; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

 

6.             Motion to Conduct an Executive Session

               

                “Mr. Chairman, I move that the Authority conduct an executive session pursuant to Sections 105(1)(f) of the Public Officers Law of the State of New York to discuss matters leading to the appointment, employment, promotion, discipline, suspension, dismissal or removal of a particular person or corporation.”  A motion was made and seconded for an Executive Session.


 

7.             Motion to Reopen Meeting in Open Session

 

“Mr. Chairman, I move to reopen the meeting in Open Session.”  Upon motion made and seconded, the meeting reopened in Open Session.

 

8.             Resolution – James Yates

 

Mr. Gil Quiniones read the following resolution.

WHEREAS, James H. Yates compiled an exemplary record of accomplishment during a career of 14 l/2 years at the New York Power Authority in which he seamlessly navigated the diverse worlds of technology, mathematical analysis, policy development and customer relations; and

WHEREAS, Mr. Yates’ service, culminating in two years as Senior Vice President, Marketing and Economic Development, was enhanced by his clear strategic thinking; his trademark thoroughness and problem-solving skills; his consistently calm demeanor; and his unswerving personal integrity; and

WHEREAS, Mr. Yates worked tirelessly to achieve NYPA’s goal of using its low-cost electricity to maximum effectiveness in creating and protecting jobs for New Yorkers and in making New York an attractive state for business; and

WHEREAS, he played a critical role in initiatives that supported hundreds of thousands of jobs throughout the state, ranging from establishment of the Power for Jobs program to implementation of more-efficient procedures for allocations of Niagara hydropower, enactment of landmark legislation that maintained or designated hydro supplies for businesses in Western and Northern New York; and negotiation of long-term contracts with Alcoa and Brookhaven National Laboratory; and

WHEREAS, as an unabashed numbers buff and seasoned load forecaster, Mr. Yates was instrumental in development of NYPA’s short-term load forecasting program and took immense pride in its success, which brought substantial economic benefit to the Authority and enabled it to function effectively in the state’s competitive electricity markets; and

WHEREAS, his singular ability to work with and relate to customers was manifested through his extensive involvement in such endeavors as the conclusion of innovative power supply contracts with governmental entities in New York City and the establishment and rapid growth of the Authority’s Peak Load Management Program; and

WHEREAS, he was a highly respected manager and mentor who nurtured the careers of numerous NYPA staff members by providing ample opportunities for growth and generously imparting his own considerable knowledge and experience; and

WHEREAS, Mr. Yates has retired from the Authority, having contributed significantly to the fulfillment of its mission and to the well-being of the many New Yorkers whose jobs and livelihoods are in large measure attributable to his efforts;

NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power Authority of the State of New York express their profound thanks and appreciation to Jim Yates for his extraordinary service to the Authority and the people of New York State and that they convey to him their sincere wishes for a retirement marked by health and happiness, his publication of at least one best-selling mystery novel and many more years of success and fulfillment.

September 29, 2009


 

9.         Motion to Conduct an Executive Session

               

                “Mr. Chairman, I move that the Authority conduct an executive session pursuant to Sections 105(1)(f) of the Public Officers Law of the State of New York to discuss matters leading to the appointment, employment, promotion, discipline, suspension, dismissal or removal of a particular person or corporation.”  Upon motion made and seconded, an Executive Session was held.


 

10.          Motion to Resume Meeting in Open Session

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

 11.          Proposed Schedule of Trustees’ Meetings 2009 – 2010

 

The Corporate Secretary submitted the following report:

 

“The following schedule of meetings for the remainder of 2009 and year 2010 is recommended:

            Date                                                                       Location                                               Time

                October 27, 2009                                                 WPO                                                       9:00 a.m.

                December 15, 2009                                             Long Island                                          11:00 a.m.

                January 26, 2010                                                WPO                                                       11:00 a.m.

                February 23, 2010                                               Albany                                                   11:00 a.m.

                March 23, 2010 - Annual                                  WPO                                                       11:00 a.m.

 

                May 25, 2010                                                      Syracuse                                                11:00 a.m.

                June 29, 2010                                                       Niagara                                                  11:00 a.m.

                July 27, 2010                                                        Massena                                                11:00 a.m.

                September 28, 2010                                            WPO                                                       11:00 a.m.

                October 26, 2010                                                 Buffalo                                                  11:00 a.m.

                December 14, 2010                                             WPO                                                       11:00 a.m.

Recommendation

“The President and Chief Executive Officer and I support the proposed schedule for the Authority’s Trustees’ Meetings for the end of 2009 and year 2010, as set forth in the foregoing report.”

            Vice Chairman Foster abstained from the vote on this agenda item, saying that he felt that the Trustees should not be traveling all over the State for their meetings.

 The attached resolution, as submitted by the Corporate Secretary, was adopted by a vote of 4-1 with Vice Chairman Foster abstaining.

RESOLVED, That the schedule of Trustees’ Meetings for the end of 2009 and year 2010, as set forth in the foregoing report of the Corporate Secretary, be, and hereby is, approved.


 

12.          Next Meeting

 

The next Regular Meeting of the Trustees will be held on Tuesday, October 27, 2009, at a time to be determined at the Clarence D. Rappleyea Building in White Plains, New York, unless otherwise designated by the Chairman with the concurrence of the Trustees.

 


 

Closing

                On motion made and seconded, the meeting was adjourned by the Chairman at approximately

2:25 p.m.

 

 

 

 

Karen Delince

Corporate Secretary

 

 

 

 

 

 

 

 

                                                                

 

 

 

SEPTEMBER MINS.09