MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

June 26, 2012

 

Table of Contents

 

 

 

                Subject     

 

                                                                                                                            

Introduction                                                                                                                            

1.                   Adoption of the June 26, 2012 Proposed Meeting Agenda                                               

2.                   Board Resolutions: Michael J. Townsend, D. Patrick Curley, Mark O’Luck 
 Resolution      

   

3.                   Election of Chairman of the Authority                                                                                

Resolution

 

4.                   Consent Agenda:                                                                                                                     

a.       Minutes of the Regular Meeting held on April 24, 2012                                   

b.       Expanded Green Power Program – Authorization                                             

c.        Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program – Servomotor  Design and Fabrication – Contract Award  
                           

d.       Niagara Power Project – Switchyard Structures Foundation Repair – Contract Award
 

e.        Procurement (Construction) Contract – St. Lawrence/FDR Power Project Relicensing – Implementation of the Nichols Island Habitat Improvement Project – Contract Award                         

    

f.        Procurement (Services) Contracts – Business Units and Facilities – Awards, Extensions and Additional Funding, Exhibit - “4f-A”; “4f-B”
Resolution   

 

g.       NYPA Fleet Vehicles – Transfer of Ownership to the New York State Office of General Services, Exhibit -  “4g-A”; “4g-B”

        Resolution

   

h.       Allocation of Expansion Power, Exhibit - “4h-A”; “4h-A-1”
Resolution

 

i.         Municipal and Rural Electric Cooperative Economic Development Program – Allocations to City of  Salamanca and Village of Skaneateles

 

j.         Authorization to Fund Statewide Energy Services Program Engineering, Design and Construction Services –  Contract Awards

 

k.       Niagara Power Project – Winter Mooring Site – First  Buffalo River Marina – Capital Expenditure Authorization Request   

                                Resolution

 

                Discussion Agenda:                                                                                                                                                      

5.                   Reports from:

a.       President and Chief Executive Officer, Exhibit - “5a-A”
Resolution

b.       Chief Operating Officer, Exhibit - “5b-A”
Resolution

c.        Chief Financial Officer, Exhibit -  “5c-A”
Resolution       

 

6.                   Power Allocations Under ReCharge New York Power Program, Exhibit -  “6-A” – “6-E”

 Resolution

 

7.                   Power Contract with the Town of Massena – Massena Electric  Department – Transmittal to the Governor, Exhibit - “7-A”; “7-B”
Resolution
 

8.                   Transitional Electricity Discount Payments for Certain Power for Jobs and Energy Cost Savings Benefit Customers, Exhibit - “8-A”
Resolution

 

9.                   Informational Item: Agreements Providing for Delivery of                                           

Recharge New York Power 

 

10.                Energy Efficiency Market Acceleration Program Authorization                                    

Resolution

 

11.                Release of Funds in Support of the Western New York Power Proceeds Allocation Act               

 Resolution

 

12.                Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program – Motor-Generator Upgrade, Accessory Replacement and Overhaul – Contract Award                               

 Resolution  

  

13.                Motion to Conduct an Executive Session                                                                           

14.                Motion to Resume Meeting in Open Session                                                                      

15.                Contribution of Funds to the State Treasury                                                                      

Resolution

 

16.                Transitional Succession Insurance Coverage                                                                     

 

17.                Committee Appointments                                                                                                      

Resolution  

 

18.                Next Meeting                                                                                                                            

Closing                                                                                                                                                                           


Minutes of the Regular Meeting of the Power Authority of the State of New York held via videoconference at the Clarence D. Rappleyea Building, 123 Main Street, White Plains, New York at approximately 11:15 a.m.

 

The Members of the Board were present at the following videoconference locations:

 

                                John S. Dyson, Vice Chairman – Italy

                                Eugene L. Nicandri, Trustee      – WPO

                                Jonathan F. Foster, Trustee       – WPO

                                R. Wayne LeChase, Trustee      – WPO

                                John R. Koelmel, Trustee           – WPO

                                Terrance P. Flynn, Trustee         – WPO

                                Joanne M. Mahoney, Trustee   – WPO

                               

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Gil C. Quiniones                                   President and Chief Executive Officer

Judith C. McCarthy                             Executive Vice President and General Counsel

Edward Welz                                        Chief Operating Officer

Donald Russak                                    Chief Financial Officer

Thomas Antenucci                             Senior Vice President – Power Supply Support Services

Thomas DeJesu                                   Senior Vice President – Public, Governmental and Regulatory Affairs

Joseph Kessler                                    Senior Vice President – Power Generation, Power Supply

James Pasquale                                   Senior Vice President – Marketing and Economic Development

Joan Tursi                                            Senior Vice President – Corporate Support Services

Paul Belnick                                         Vice President – Energy EfficiencyEnergy Services and Technology

John Canale                                         Vice President – Project Management

Thomas Davis                                     Vice President – Financial Planning and Budgets

Dennis Eccleston                                Vice President – Information Technology/Chief Information Officer

Joseph Gryzlo                                      Vice President and Chief Ethics and Compliance Officer

Michael Huvane                                  Vice President – Marketing – Business and Municipal Marketing

John Kahabka                                      Vice President – Environmental, Health and Safety

Joseph Leary                                        Vice President – Community and Government Relations

Patricia Leto                                         Vice President – Procurement

Lesly Pardo                                           Vice President – Internal Audit

John Suloway                                       Vice President – Project Development, Licensing and Compliance

Brain McElroy                                       Treasurer

Karen Delince                                        Corporate Secretary

Lori Alesio                                             Assistant General Counsel Human Resources and Labor Relations

Carol Geiger-Wank                               Director – Labor Relations and Special Projects

Mike Lupo                                             Director – Marketing Analysis and Administration 

Michael Saltzman                                  Director – Media Relations

Guy Sliker                                               Director – Renewable Energy Resources and Technology

Lynn Hait                                                Regional Manager – Central New York

Michael Mitchell                                    Project ManagerHydro/Transmission

James Bejarano                                       Program Manager – Energy Services (Niagara)

Dominick Luce                                        Program ManagerEnergy Services

John Brennan                                          Manager – Strategy and Governance

Timothy Muldoon                                  Manager – Business Power Allocations and Compliance

Gary Schmid                                            Manager – Network Services Infrastructure

Mark Slade                                              Manager – Relicensing and Implementation

John Markowitz                                      Lead R & TD Engineer IIRenewable Energy Resources and Technology

Patricia Lombardi                                    Engineer IHydro/Transmission

Lorna M. Johnson                                  Assistant Corporate Secretary

Ruth Colon                                              Senior Business Integration Project Manager

Brian Wilkie                                             Rotational Business Integration Project Manager

Tabitha Robinson                                   BPAC Analyst I Business Power Allocations and Compliance

Emily Alkiewicz                                        BPAC AnalystBusiness Power Allocations and Compliance

Sheila Baughman                                     Senior Secretary – Corporate Secretary’s Office

Trish Hennessy                                        PhotographerVideo and Photographic Services

Joe Bress                                                   Consultant

Randal Lowman                                        Information Technology Consultant

Sheri L. Mooney                                       Senior Vice President, Senior Programs Manager - First Niagara Financial Group

Jennifer Sanfilippo                                    Partner - The Mullen Group

John Henao                                                Account Executive – Alston Power

Mark O’Luck                                              Former Trustee

D. Patrick Curley                                        Former Trustee

 


Trustee Nicandri presided over the meeting followed by Chairman John Koelmel.  Corporate Secretary Delince kept the Minutes.

 

 

Introduction

                Trustee Eugene Nicandri presided over the meeting until the new Chairman of the Board was elected.  He welcomed new members of the Board John Koelmel, President and Chief Executive Officer of First Niagara Bank; Joanne Mahoney, Onondaga County Executive and resident of the town of Dewitt; Terrance Flynn, a member of Harris Beach Attorneys at Law and resident of Snyder in the town of Amherst, Erie County; existing members of the Board, Vice Chairman John Dyson, participating via video conference, Trustees Jonathan Foster and R. Wayne Le Chase; and outgoing members of the Board, Trustees Mark O'Luck (WPO) and D. Patrick Curley, participating via video conference from the Buffalo Office.  He also welcomed NYPA staff members who were present at the meeting.

 

1.                   Adoption of the June 26, 2012 Proposed Meeting Agenda

On motion made and seconded, the meeting Agenda was approved as amended.  At its meeting earlier today, the Economic Development Power Allocation Board (“EDPAB”) recommended that the Authority’s Trustees approve item #6 (Power Allocations under the ReCharge New York Power Program); Trustee Nicandri recused himself from the vote on item #6 since he voted for its approval at the EDPAB meeting.

 
2.                   Board Resolutions

Trustee Jonathan Foster read the resolutions honoring former Chairman, Michael Townsend and Trustees D. Patrick Curley and Mark O’Luck.  Trustee Nicandri noted that Governor Cuomo wrote letters thanking them for their service.  

 

a.       Resolution – Michael J. Townsend

 

                WHEREAS, Michael J. Townsend played a vital role in strengthening and advancing the New York Power Authority’s policies and programs during an eventful and productive tenure of more than eight years as an Authority Trustee, Vice Chairman and Chairman; and

 

                WHEREAS, throughout his service under four Governors, Mr. Townsend combined a solid knowledge of the issues facing the Authority with the sound judgment and negotiating skills honed during his distinguished career as an Attorney in the private sector; and

 

                WHEREAS, as Chairman during a critical period of more than three years, preceded by a stint as Acting Chairman, Mr. Townsend provided invaluable leadership and continuity at times of major changes in the Authority’s senior management, all while maintaining his unruffled demeanor, keen sense of humor and unfailing respect for his fellow Trustees and for NYPA staff members; and

 

                 WHEREAS, he worked diligently to represent the Authority’s interests in matters concerning financial contributions to the State Government while also helping to ensure NYPA’s own ongoing financial strength as head of the Board’s Finance Committee; and

 

                 WHEREAS, as a specialist in economic development, he strongly supported the Authority’s low-cost power allocations that helped to create or protect thousands of jobs across the State during his years on the Board, as well as the establishment during his Chairmanship of the ReCharge New York Power program; and

 

                WHEREAS, other highlights of Mr. Townsend’s service as Chairman included three consecutive years of record NYPA investments in energy efficiency and clean energy projects; completion, continuation or inauguration of Life Extension and Modernization programs at the Authority’s hydroelectric facilities; a focus on initiatives to upgrade the NYPA transmission system; and an agreement with a private developer for construction of a major transmission line from New Jersey to New York City; and

 

                WHEREAS, his earlier years as a Trustee and Vice Chairman had been marked by such milestones as execution of long-term power supply agreements with NYPA’s governmental customers in New York City; completion of the Authority’s 500-megawatt power plant in Queens; and receipt of a new federal license for the Niagara Power Project; and

 

        WHEREAS, with his term having concluded, Mr. Townsend has left a solid legacy of accomplishment and dedication that will continue to benefit the Authority and the people of New York State;

                NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power Authority of the State of New York express their profound appreciation to Michael J. Townsend for his exemplary service and wish him and his family a happy, healthy and fulfilling future.

 

June 26, 2012

 

 

b.       Resolution – D. Patrick Curley

 WHEREAS, D. Patrick Curley brought a singular blend of expertise and enthusiasm to his nearly five years of distinguished service as a Trustee of the New York Power Authority; and

     WHEREAS, Mr. Curley’s deep and longstanding involvement in economic development as the founder and President of a prominent financial consulting firm and his profound understanding of the world of statistics, accounting and related fields proved of immense value as the Authority’s Trustees assessed and acted upon allocations of low-cost power that helped to create or protect thousands of jobs throughout the State during his tenure; and

     WHEREAS, Mr. Curley, a lifetime resident of Western New York, took particular interest in the Authority’s activities in that vital region and considerable pride in his role as its senior representative in the area, frequently attending NYPA events at the Niagara Power Project and other venues; and

     WHEREAS, while remaining acutely conscious of the Authority’s statewide responsibilities, Mr. Curley applied his unparalleled knowledge of the Niagara Frontier and recognition of its needs to a number of critical matters ranging from extended Niagara hydropower contracts with more than 100 Western New York businesses to an agreement for enhanced and accelerated NYPA funding of the Buffalo harbor redevelopment; and

    WHEREAS, Mr. Curley’s years on the Board were also marked by such milestones as the start of a major Life Extension and Modernization program at the Niagara project’s Lewiston Pump-Generating Plant, completion of a similar initiative at the Blenheim-Gilboa Pumped Storage Power Project and Trustee approval of the first allocations under the ReCharge New York Power program; and

     WHEREAS, his tenure included invaluable service on the Board’s Governance Committee and as Chairman of its Audit Committee--an assignment that gave full expression to the insights and professorial techniques honed during his years of teaching at D’Youville College and for the American Management Association; and

     WHEREAS, Mr. Curley was distinguished as well by such attributes as his hearty sense of humor, his ownership of a sailboat bedecked in the colors of the Irish flag and his possible possession of the lifetime record for attendance at performances of “Les Misèrables”; and

     WHEREAS, his diverse civic, charitable, cultural and business interests have been reflected in a multitude of activities on the local, state and national levels; and

     WHEREAS, Mr. Curley has left the NYPA Board following the expiration of his term;

     NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power  Authority of the State of New York commend Pat Curley for his many contributions to the Authority and the people of New York State and that they wish him; his wife, Carolyn; and their family a future of health, happiness and continued  accomplishment.

               

                June 26, 2012

 

 

c.        Resolution – Mark O’Luck

 

     WHEREAS, Mark O’Luck exerted a profoundly positive impact on the New York Power Authority during his more than two years as a NYPA Trustee; and

 

     WHEREAS, Mr. O’Luck’s fervent commitment to the cause of diversity, with respect both to the Authority’s providers of goods and services and to its own staff,  was a driving force behind the progress achieved in each of these areas during his tenure; and

    WHEREAS, thanks in large part to his efforts and advocacy, the value of the Authority’s annual contract awards to minority- and women-owned businesses nearly doubled in his time on the Board and the share of overall expenditures directed to such firms rose to more than 20 percent, exceeding the ambitious target established in New York State legislation; and

    WHEREAS, Mr. O’Luck forcefully urged the appointment of NYPA’s first Chief Diversity Officer, a hiring that has given new impetus to the Authority’s efforts to strengthen its staff by providing opportunities to the most talented of applicants from the most varied of  backgrounds; and

     WHEREAS, drawing upon his experience as a founder and leader of two business consulting firms, Mr. O’Luck brought a unique perspective to his focus on diversity and on the Authority’s efforts to create and protect jobs through use of economic power, most recently through Trustee approval of the first allocations under the ReCharge New York Power program; and

     WHEREAS, Mr. O’Luck’s eventful years on the Board were also distinguished by vital initiatives ranging from record investments in energy efficiency and renewable energy to major upgrades at the Authority’s generating facilities (to say nothing of the birth of his daughter Jia Jia); and

     WHEREAS, the Board benefited from Mr. O’Luck’s service on its Finance and Governance committees; his meticulous preparation and insightful discussion of critical issues; and, if reluctantly, from his insistence on a more healthful fare at Trustee working lunches; and

     WHEREAS, Mr. O’Luck’s tenure at the Authority was but the latest chapter in a distinguished history of public service that has included such positions as Chairman of the Brooklyn Economic Development Corporation; Vice Chairman of that Borough’s Chamber of Commerce; and Regent of Long Island College Hospital; and

     WHEREAS, Mr. O’Luck has stepped down as a NYPA Trustee following the completion of his term;

     NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power Authority of the State of New York salute Mark O’Luck for his outstanding service to the Authority and the people of New York State and that they convey to him and his family their best wishes for many years of health, happiness and success.

 

June 26, 2012

3.                   Election of Chairman of the Authority

The Vice Chairman submitted the following report:

SUMMARY

               

                “In accordance with §1004 of the Public Authorities Law (the ‘Power Authority Act’), the Trustees are requested to elect Mr. John R. Koelmel, of Erie County, New York as Chairman of the Authority, effective immediately. 

 

DISCUSSION

 

“The Senate has confirmed Mr. Koelmel’s nomination as Trustee by Governor Cuomo effective immediately.  Section 1004 of the Power Authority Act provides that the Trustees may select from among their own, a Trustee to hold the position of Chairman.  Section 1003 of the statute also provides that when a Trustee is selected to serve as the Chairman, he or she is eligible to receive an annual salary to be set by the Trustees of the Authority and which shall not exceed the salary prescribed for the positions listed in paragraph (f) of subdivision one of Section 169 of the Executive Law.  Mr. Koelmel has advised that he wishes to serve as Chairman without compensation and that he declines any eligibility for the prescribed salary.

 

RECOMMENDATION

 

                “Mr. Koelmel has held leadership roles in numerous professional and community organizations in Buffalo and Western New York.  Based on his strong managerial and business talents and many years of experience, it is hereby recommended that Mr. Koelmel be elected to fill the vacancy of Chairman of the Authority effective immediately.”

 

Trustee Dyson presented highlights of the recommendation for the election of the Chairman of the Board and Trustee Nicandri read the resolution, for the record. On motion made and seconded, the resolution was unanimously adopted. 

Chairman Koelmel thanked the Trustees for their vote of confidence and said he is honored to have the opportunity to serve on the Board.  He looks forward to working with the board members and President Gil Quiniones and his team which will be a collaborative effort.  He added that the Authority has been doing a great job for the State and he will do his part to contribute to the Authority’s continued success. 


                The following resolution, as submitted by the Vice Chairman, was unanimously adopted.

 
 
                                       
RESOLVED, That Mr. John R. Koelmel, of Erie County, New York be, and hereby is, elected as Chairman of the

                            Power Authority of the State of New York, effective immediately.

 

 

4.                   Consent Agenda:

      On motion made and seconded, the Consent Agenda was approved as amended.

                Trustee LeChase was recused from the vote on items #4d (Niagara Power Project – Switchyard Structures Foundation Repair – Contract Award) as it relates to BVR Construction Company Inc.; #4f (Procurement Services Contracts – Business Units and Facilities - Awards, Extensions and Additional Funding) as it relates to CH2M Hill Engineering, P.A., CHA Consulting, Inc., M/E Engineering, P.C., Northland Associates, Inc., and Siemens Industry, Inc.; #4i (Municipal and Rural Electric Cooperative Economic Development Program – Allocations) as it relates to Seneca Allegany Casino & Hotel; and #4j (Authorization to Fund Statewide Energy Services Program Engineering, Design and Construction Services – Contract Awards) as it relates to Cannon Design-Built, Inc.  

                Trustee Flynn was recused from the vote on item #4f as it relates to Siemens Industry, Inc., Tetra Tech EC, Inc. and Siemens Energy Inc. and #4j as it relates to Parsons Brinckerhoff, Inc.

                Trustee Mahoney was recused from the vote on item #4i as it relates to Skaneateles Recreational Charitable Trust.


            a.       Approval of the Minutes

                The Minutes of the Regular Meeting held on April 24, 2012 were unanimously adopted.

 

b.                   Expanded Green Power Program – Authorization

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to authorize the expansion of the Green Power Program (‘GPP’), more fully described below, through which the Authority may buy and sell Renewable Energy Credits (‘REC’) on behalf of eligible customers of the Authority’s Energy Services Program (‘ESP’).  The New York State Legislature amended the Authority’s enabling legislation in 2009 and twice in 2011 to authorize an expanded ability to provide energy efficiency and clean energy programs and services.  The direct costs associated with the GPP will be passed through and paid for by the customers who request the Authority’s services.

BACKGROUND

 

“Environmental attributes are intangible assets that represent the environmental benefits of renewable energy generation and are traded separately from the energy itself.  All the environmental attributes associated with 1 MWh of renewable energy generation constitute one REC.  Since 2005, the Authority has provided RECs to certain customers to assist them in complying with Executive Order 111 (‘Green and Clean State Buildings and Vehicles’).  The Order was enacted to bolster demand for renewable energy in New York, and states that all State agencies must source twenty percent of their electrical load from renewable resources by 2010, which may be achieved through the purchase of RECs.  Further, the GPP is consistent with the New York State Energy Law, which states that it is the State’s policy to ‘accelerate development and use within the state of renewable energy sources.’

 

“The Power Authority Act provides in Section 1005 (17) that as ‘deemed feasible and advisable by the trustees’ the Authority may supply energy-related projects, programs and services for any public entity, any independent not-for-profit institution of higher education within the state and any Authority power program participants, including Recharge New York customers.  This legislation expanded the Authority’s potential pool of energy services customers as well as the range of its energy services offerings.  Authority staff now seeks Trustee approval to expand the GPP and offer RECs to potential customers authorized in the legislation.

 

                “There are existing standards, safeguards and procedures to administer the GPP.  The Executive Risk Management Committee (‘ERMC’) determined during its December 12, 2011 meeting that the REC purchase transactions involved in the GPP fall under the September 28, 2010 Policy for Energy Risk Management thus requiring the approval of the ERMC.  During its January 26, 2012 meeting, the ERMC authorized the Energy Resource Management department to execute transactions with values not to exceed $1 million and terms not to exceed two years. The procedure adopted July 26, 2011 governing the issuance of competitive solicitations for power supply products requires that Trustee approval be sought for, not only the execution of contracts with terms exceeding four years, but also the issuance of RFPs which may lead to contracts with terms exceeding four years.  Thus, appropriate safe-guards are in place.

 

DISCUSSION

 

“The Authority has received inquiries from entities other than Authority power customers as to whether the Authority could provide market-based renewable energy by procuring RECs on their behalf.  The Authority has not previously provided RECs to all Energy Service Program eligible entities and, until now, has only provided RECs to current power program customers.  Authority staff now requests authorization to provide RECs to all entities incorporated under the current enabling legislation.

FISCAL INFORMATION

“No additional funding is requested to implement the expansion of the GPP.  The Authority’s GPP is a procurement-based program, where the Authority semi-annually collects customer requests and conducts a competitive solicitation to meet its customers’ needs.  The Authority does not maintain an inventory of RECs.  Agreements with customers provide for a complete pass through of direct costs and risks, which are executed prior to the agreements with suppliers.  Standard templates have been developed and agreements with customers and suppliers are reviewed for congruence prior to execution.  Incremental indirect costs are initially expected to be insignificant; however, as the program expands, indirect costs may be recovered from the program participants in accordance with ESP guidelines.  The full direct cost of any purchases resulting from the program will be paid for by the participants in accordance with current GPP guidelines.

 

RECOMMENDATION

“The Senior Vice President – Energy Resource Management, the Senior Vice President – Economic Development and Energy Efficiency, the Vice President – Energy Efficiency and the Director – Market Analysis and Hedging recommend that the Trustees authorize the proposed expansion of the Green Power Program.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, that the Trustees hereby authorize the expansion of the Green Power Program to include the procurement of Renewable Energy Credits on behalf of eligible recipients as described 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.

 

 

c.                    Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program Servomotor Design and Fabrication – Contract Award

 

                                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a five-year contract to Voith Hydro Inc. of York, PA (‘Voith’) in the amount of $5,999,139, for the procurement of 12 sets of servomotors and associated items, as part of the Life Extension and Modernization (‘LEM’) Program at the Lewiston Pump Generating Plant (‘LPGP’).  

 

BACKGROUND

 

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

 

                “At their June 29, 2010 meeting, the Trustees approved the LPGP LEM Program at the estimated cost of $460 million and authorized capital expenditures in the amount of $131 million.  This program is designed to preserve an aging generating facility so that it can continue to reliably provide power, enhance unit capacity and to improve water-to-wire efficiency.

 

“There are two servomotors per unit located inside the turbine pit.  These servomotors are large oil-operated pistons that regulate the water flow through the turbines by moving the wicket gates.  They are the original servomotors, having been placed in service in 1961.  The housings are constructed of cast iron which has experienced cracking and have been temporarily repaired; permanent repair of the cast iron is not possible.

 

“Based on additional equipment condition assessment, it was deemed impractical to continue with temporary repairs and a decision was made to replace all of the existing cast iron servomotors with a new steel design. 

 

DISCUSSION

 

“The scope-of-work under this contract includes the design, manufacturing and delivery of 12 sets of servomotors.  The installation of the servomotors will take place during the planned individual unit outages in the LPGP LEM Program.

 

                “The Authority issued an advertisement to procure bids in the New York State Contract Reporter and bid packages were available on July 15, 2011.  On September 8, 2011, proposals were received from two bidders.  By post-bid addendum, the scope of supply was increased to 12 sets of servomotors, and final prices for all 12 sets were received on May 1, 2012.  The final proposal prices are listed below: 

               

Bidder

Location

Lump Sum Price

Alstom Hydro Power Inc.

Littleton, CO

$5,628,375*

Voith Hydro Inc.

York, PA

$5,999,139

 

                “The proposals were reviewed by an evaluation committee comprising staff from Engineering, Procurement and Project Management.

 

                “Alstom Hydro Power Inc. of Littleton CO’s (‘Alstom’) bid was the lowest-priced and was evaluated as technically acceptable.  However, Alstom took commercial exceptions such as insurance, consequential damages and limitation of liability which were not acceptable to the Authority.  Alstom was non-responsive to follow-up inquiries to resolve these issues.  A portion of Alstom’s bid would be subject to material escalation (*estimated to be $300,000, included in the Lump Sum Price above).

 

“Voith’s bid included a firm price for all 12 sets of servomotors and was determined to be the second lowest-price and was evaluated as technically and commercially acceptable.  The existing servomotors at LPGP were manufactured by Allis Chalmers.  Voith acquired Allis Chalmers in 1986 and owns all of the detailed drawings for the existing servomotors. This factor will expedite the design process by avoiding the need for extensive field measurements.

 

“Voith has broad experience with projects of this magnitude, has demonstrated knowledge of the scope-of-work and is capable of completing this project in a timely manner.  Voith has taken some minor commercial exceptions that should be resolved prior to any contract award and without impacting the schedule.

 

“Staff recommends that a contract for the described work be awarded to Voith as Voith is    the technical and commercially acceptable bidder.

 

                “The estimated cost of this work is within the authorization of this project and is included in the 2012 approved Capital Budget.  Future funding will be included in the Capital Budget request 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 – Project Management, the Vice President – Engineering, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees approve the award of a multi-year contract to Voith Hydro Inc. of York, PA, in the amount of $5,999,139.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a five-year contract to Voith Hydro Inc. of York, PA, in the amount of $5,999,139, for the procurement of 12 sets of servomotors and associated items as part of the Life Extension and Modernization program to renovate and modernize the Lewiston Pump Generating Plant, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                                Contractor                                                   Contract Approval

 

                                Voith Hydro Inc. of York, PA                           $5,999,139          

 

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.

 

d.                   Niagara Power Project – Switchyard Structures Foundation Repair – Contract Award  

          

                               The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a three-year contract in the amount of $1,074,900 to BVR Construction Company, Inc. (‘BVR’), of Rochester, NY to repair the switchyard foundations at
the Niagara Power Project.

 

BACKGROUND

 

“In accordance with the Authority’s Expenditure Authorization Procedures, the award of non-personal services contracts exceeding a one-year term require the Trustees’ approval.

 

“The foundations in the switchyard area are deteriorating and require repair to prevent damage to the transmission infrastructure and to maintain a safe work environment for plant personnel.  A condition assessment of all the foundations in the Niagara Switchyard was completed in 2010 by Lu Engineers.  The twelve most critical tower foundations were repaired in 2011.  The balance of the foundations will be repaired beginning in the summer of 2012 and continuing through 2014.

 

DISCUSSION

 

“The scope of work under this contract includes the removal, disposal and replacement of the delaminated concrete and steel rebars. The work will be performed in three phases as follows:

 

Phase 1  Foundations in 345 kv                       July 2, 2012 – Nov. 20, 2012

 

Phase 2  Foundations in 230 kv                       May 6, 2013 – Oct. 25, 2013

 

Phase 3  Foundations in 115 kv                       May 5, 2014 – Oct. 31, 2014

 

                “The Authority issued an advertisement to procure bids in the New York State Contract Reporter and bid packages were available as of February 13, 2012.  The bid documents were downloaded by 40 potential bidders and 5 potential bidders participated in a site visit on February 23, 2012.

 

The following five proposals were received on March 20, 2012:

               

Bidder

Location

Lump Sum Bid   

 

Scrufari Construction Co., Inc.

 

Niagara Falls, NY

 

$1,056,600

 

BVR Construction Co., Inc.

 

Rochester, NY

 

$1,074,900

 

EdBauer Construction

 

West Seneca, NY

 

$1,888,000

 

Pinto Construction Services, Inc.

 

Buffalo, NY

 

$2,293,293

 

Sicoli & Massaro, Inc.

 

Niagara Falls, NY

 

$3,916,900

 

               

 

 

                “The five proposals were evaluated, using technical, safety, cost and similar work experience as criteria, by an evaluation committee comprised of staff from Engineering, Procurement and Project Management.

 

                “Scrufari Construction Co. Inc. (‘Scrufari’) submitted the lowest-cost proposal but did not submit the proper shoring plan that was required in the specification.  A post-bid letter was sent to Scrufari to include a shoring plan as further explained during the site visit.  Scrufari responded that the design of the temporary shoring would be submitted after the award and therefore Scrufari’s bid is considered non-responsive and was not considered in further evaluation.

 

“The evaluation committee recommends that the contract be awarded to BVR for the total lump-sum amount of $1,074,900.  BVR has performed satisfactorily on previous Authority Projects including the initial phase of the Niagara switchyard concrete foundation repair work in 2011.  BVR’s experience, safety record, resources, pricing and technical capabilities are sufficient to perform this work.  BVR took no commercial exceptions to the bidding document.

 

“Temporary supports are necessary to be installed before removing the foundations during concrete repairs.  BVR has successfully designed and installed temporary supports during the switchyard work completed in 2011.  BVR plans to utilize the same shoring plan and design in the next 3 phases of concrete repair.

 

                “Funding in the amount of $400,000 has been approved for 2012 O&M Budget.  The future expenditures of $400,000 per year will be included in the O&M Budget for 2013 and 2014.

 

FISCAL INFORMATION

 

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

 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Vice President – Project Management, the Vice President – Engineering, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees approve the award of a multi-year contract to BVR Construction Company, Inc. of Rochester, NY, in the amount of $1,074,900, to repair the switchyard foundations located at the Niagara Power Project.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a three-year contract to BVR Construction Company, Inc. of  Rochester, NY, in the amount of $1,074,900, to repair the switchyard foundations located at the Niagara Power Project, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                Contractor                                           Contract Approval

                BVR Construction, Inc.,                             $1,074,900

                Rochester, NY                                                     

 

 

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.

 

 

 

e.                   Procurement (Construction) Contract – St. Lawrence/FDR Power Project Relicensing – Implementation of the Nichols Island Habitat Improvement Project – Contract Award  

                               

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a procurement contract to J.E. Sheehan Contracting Corp. (‘Sheehan’) of Potsdam, New York for the construction of new dikes and water control structures at the St. Lawrence/FDR Power Project that will create the Nichols Island Controlled Level Pond Habitat Improvement Project (the ‘Project’).  The term of the contract will be from July 1, 2012 through June 30, 2015.  The amount for which authorization is requested is $3,300,000, which includes the contract price and contingency.

 

BACKGROUND

 

“Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts require the Trustee’s approval for procurement contracts involving services to be rendered in excess of one year.  The Authority’s Guidelines for Procurement Contracts also require the Trustee’s approval for procurement contracts in excess of $3 million.

 

“Pursuant to the new license for the St. Lawrence/FDR Power Project issued by the Federal Energy Regulatory Commission (‘FERC’) on October 23, 2003, the Authority is required to implement a variety of Habitat Improvement Projects (‘HIPs’).  Among these is the Nichols Island Controlled Level Pond Project.  This Project will provide the ability to control the water level at the western end of the Wilson Hill Wildlife Management Area, independent of water levels in the St. Lawrence River.  The contract being recommended for award will implement the Project through 1) the construction of three new dikes connecting islands in the Nichols Island complex; 2) the rehabilitation of an existing dike connecting Bradford and Nichols Islands; and 3) the installation of two new water control structures. 

 

“The Trustees previously authorized capital expenditures in the amount of $169 million to support the compliance and implementation program associated with the new license at the St Lawrence Project.  The Nichols Island HIP is part of that capital expenditure plan.

 

DISCUSSION

 

“A Request for Quotation (‘RFQ’) for these construction services was publicly noticed in the New York State Contract Reporter on April 11, 2012 and the full RFQ was made available on the Authority’s Procurement Web site.  Bids were due in White Plains by close of business on May 8, 2012.

 

“Three bid addenda were issued responding to questions from the bidders; responses to requests for additional information were also provided.  Responses to the RFQ were as follows:

 

   One hundred-twenty-two (122) firms downloaded the RFQ from the Authority’s Procurement Web site

 

   Six (6) firms attended a pre-award site meeting and tour on April 20, 2012

 

   Two (2) firms provided a proposal:

 

         -  J.E. Sheehan Contracting Corp. (Potsdam, NY)

         -  Perras Excavating (‘Perras’) (Massena, NY)

 

 

“Staff from the Relicensing and Implementation Division and Procurement Division reviewed and evaluated the bids.   Bid Pricing is as follows:

 

                                          Bidder                                             Cost

 

Perras Excavation                               $2,737,950

J.E. Sheehan Contracting Corp.        $2,737,365

               

“For practical purposes, the bids are financially equivalent (~0.02% differential).  In addition, the Authority has extensive, positive experience, recently, with both bidders performing similar tasks.  Both bidders are technically qualified to perform the work required and have demonstrated these capabilities within the recent term of the Relicensing Implementation effort.

 

“Although the bidders’ pricing and qualifications were similar, detailed analysis of each bid raised questions about construction technique and sequencing.  Discussions with each bidder, based on specific questions, revealed that Perras intended to substitute vibratory pile setting in an application where the specification had assumed impact pile setting would be used (the foundation of the water control structure in Dike D).  Consultation with the design engineers confirmed that impact setting was referenced in the specification and that vibratory setting raised substantial technical concerns.

 

“Discussions with Sheehan established that they intended to provide impact pile setting in the area in question as part of their original bid.  Therefore, the Evaluation Team concluded that the lowest cost, qualified bid that conformed to the design engineers’ specification was that of Sheehan.

 

“Sheehan has presented a qualified, low-cost bid that conforms to the specification for the construction of the Nichols Island HIP.  Sheehan did not take any commercial exceptions to the bid documents.  It is recommended that a three-year contract be awarded to Sheehan in the bid amount of $2,737,365.  It is also recommended that a ~20% contingency ($562,635) be authorized for potential and unforeseen field adjustments.

 

“Funds from the contingency would only be committed upon obtaining appropriate authorization from the Authority.  With the contingency, the authorized contract budget proposed would be $3,300,000 with the initial contract award to Sheehan for $2,737,365.

FISCAL INFORMATION

 

“Since these expenditures are related to implementing commitments in the New License and the underlying settlement agreements for the St Lawrence Project, payments will be made from the Capital Fund. 


RECOMMENDATION

 

“The Vice President – Licensing Acquisition, Planning and Development and the Vice President – Procurement recommend that the Trustees authorize award of a contract to J.E. Sheehan Contracting Corp. of Potsdam, New York in the amount of $3,300,000 for construction services that will create the Nichols Island Controlled Level Pond Habitat Improvement Project at the St. Lawrence/FDR Power Project.   

 

“For the reasons stated, I recommend the approval of the above requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a contract to J.E. Sheehan Contracting Corp. for a period commencing on July 1, 2012 and ending on June 30, 2015, in an amount of $3,300,000 for construction services that will create the Nichols Island Controlled Level Pond Habitat Improvement Project at the St Lawrence/FDR Power Project, in compliance with that Project’s New License, as recommended in the foregoing report of the President and Chief Executive Officer;

 

Contractor                                                   Contract Approval

J.E. Sheehan Contracting Corp.                     $3,300,000

                               

 

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 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.

 

 

 

f.                   Procurement (Services) Contracts – Business Units and Facilities – Awards, Extensions and Additional Funding

                                                             

                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 (services) contracts listed in Exhibit ‘4f-A,’ as well as the continuation and funding of the procurement (services) contracts listed in Exhibit ‘4f-B,’ in support of projects and programs for the Authority’s Business Units/Departments and Facilities.  Detailed explanations of the recommended awards and extensions, 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, or the reasons for extension, the additional funding required and the projected expiration dates, 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 $30,000 to $10 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 ‘4f-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 terms of these contracts will exceed one year including the extension, the term of extension of these contracts will exceed one year and/or because the cumulative change-order limits will exceed the levels authorized by the EAPs in forthcoming change orders. 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 ‘4f-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 rebidding 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 Support Services

Human Resources – Benefits

 

“The contract with FBMC Benefits Management, Inc. (‘FBMC’) (Q12-5184; 4600002526) would provide for services in connection with web-based open enrollment for the Authority’s Flexible Benefits Program and annual benefits / compensation statements for Authority employees.  Services include, but are not limited to: importing / exporting data from/ to the Authority, with the capability of exporting data to the Authority in a format compatible with the SAP system; programming and administering a web-based enrollment system for flexible benefits, including personalized worksheets and modifications to accommodate plan changes; programming, generating and mailing customized annual benefits and compensation statements for all Authority employees; providing employee access to a self-service web portal  on a 24/7 basis during the open enrollment period; and other related tasks, as may be required.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 14 firms, including those that may have responded to a notice in the New York State Contract Reporter; three proposals were received and evaluated.  One bidder was not fully responsive and therefore was not considered further.  Staff held bid clarification meetings with each of the other two bidders and evaluated their respective proposals in greater detail.  Based on the foregoing, staff recommends the award of a contract to FBMC, the lowest-priced bidder, which is qualified to provide such services and not only meets the bid requirements, but also offers additional features that would enhance the current enrollment process.  Due to the need to commence services and based on interim approval authorized in accordance with the Authority’s Guidelines for Procurement Contracts and EAPs, the contract with FBMC became effective June 1, 2012, subject to ratification and approval by the Trustees at their next scheduled meeting.  Such action was necessary in order to allow sufficient lead time for the new provider of such services to meet the Authority’s open enrollment schedule.  The intended term of this contract is 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, $350,000.

MED Energy Efficiency Resources & Technology Services

Energy Services

 

“The contracts with Antares Group, Inc. (‘Antares’) and M/E Engineering, P.C. (‘M/E Engineering’) (Q12-5187; PO#s TBA) would provide for consulting services in support of biomass energy development projects and related activities, as part of the Authority’s comprehensive Energy Services Program offered to its public customers throughout New York State, on an ‘as needed’ basis.  Services comprise providing guidance and expertise for all phases of a biomass project (from project feasibility studies to project operation and performance monitoring) and include, but are not limited to:  providing assistance with the development of technical specifications and the preparation of Requests for Proposals, bid evaluations, engineering reviews, biomass market assessments, emissions technology and regulation tracking, and biomass fuel supply analysis.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 92 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated rigorously, as further set forth in the Award Recommendation documents.  Based on the overall weighted ranking, resulting from a qualitative evaluation based on weighted criteria, followed by a quantitative evaluation of the three highest-ranked, short-listed firms (where staff calculated the projected cost for a typical project based on each bidder’s proposed hourly rates) and subsequent telephone interviews with the three short-listed bidders, staff recommends the award of contracts to Antares and M/E Engineering, the two lowest most technically qualified bidders that meet the bid requirements.  The contracts would become effective on or about July 1, 2012 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $150,000.  Funds will be allocated as specific projects are developed or specific project sites are identified.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.

“The contracts with Industrial Staffing Services, Inc. (‘ISSI’), L.J. Gonzer Associates (‘Gonzer’) and Metro Tech Consulting Services, Inc. (‘Metro Tech’) (Q12-5218; PO#s TBA) would provide for temporary engineering support services for Energy Services projects, in anticipation of an increased need for such services in order to support the Governor’s $800 million initiative to reduce energy usage in state facilities by 20% over the next four years.  The Authority will be central to this effort and demand for such services is expected to increase significantly.  Authority activities will also increase in response to initiatives by New York City (‘NYC’) to replace lighting and remove certain fixtures in NYC public schools and to support the NYC Department of Environmental Protection (‘DEP’) in their initiatives to improve efficiency and install combined heat and power equipment.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 131 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Nine proposals were received and evaluated.  Based on their percentage mark-up, staff recommends the award of contracts to three firms, ISSI, Gonzer and Metro Tech, as the lowest-priced bidders that are qualified to provide such services and meet the bid requirements.  The contracts would become effective on or about July 1, 2012 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $10 million.  Funds will be allocated on the basis of the vendor’s ability to provide the necessary resources.  As specific staffing needs arise, resumes will be solicited from all three firms and candidates will be selected based on their qualifications.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  It should be noted that Industrial Staffing Services and Metro Tech Consulting Services are New York State-certified Minority/Woman-owned Business Enterprises (‘M/WBEs’).  It should also be noted that all costs in connection with such projects will be recovered by the Authority.

“At their meeting of October 28, 2008, the Trustees approved the award of a three-year competitively bid contract to M.J. Bradley & Associates (‘MJB&A’) for the evaluation of hybrid electric school buses in order to compare the fuel/energy efficiency and emissions reduction benefits of the standard (‘no-plug’) and plug-in hybrid systems and also to assist the State in prioritizing program budgets and developing transportation policies that support the transportation sector’s transition toward cleaner alternative fuels.  The New York State Energy Research and Development Authority (‘NYSERDA’) partnered with the Authority on this project and reimbursed the Authority for $100,000 in project costs.  The Authority has recently been notified that NYSERDA will award $25,000 in American Recovery and Reinvestment Act of 2009 (‘ARRA’) funds to the Authority for additional hybrid bus evaluation to be performed in Phase Two of the project.  As part of its ARRA Clean Cities agreement with the Authority, NYSERDA specified that the hybrid school bus evaluation will be conducted by MJB&A and that a testing protocol will be used similar to the one for monitoring and evaluating hybrid school buses in service under Phase One of the program.  Calculation of hybrid vehicle performance, including energy efficiency and emissions reductions is complex, and there is currently no standard industry methodology.  MJB&A has developed a sophisticated test plan for both the in-service bus evaluation and evaluation on simulated urban, suburban and rural routes, and has also developed a data collection and analysis methodology to evaluate the performance and energy efficiency of the hybrid drive systems.  It is essential that the same method be used to evaluate the performance of the hybrid buses from both manufacturers to ensure that the results are consistent and meaningful.  Based on the foregoing, staff recommends the award of a new single-source contract to MJB&A (PO# TBA), which is uniquely qualified to perform such work and has provided satisfactory service under the contract for Phase One.  Services to be provided under the new contract for Phase Two would include developing and managing an in-service test of the Thomas Built hybrid electric school bus in the same manner as the test of buses manufactured by IC Corp., using a similar test plan and procedures as for Phase One.  MJB&A will also conduct fuel economy testing on urban, suburban and rural/hill test routes, also using the same test protocol as for Phase One.  The consultant will analyze all collected data and produce reports summarizing the results, including the fuel economy testing.  The new contract would become effective on or about July 1, 2012 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 amount expected to be expended for the term of the contract, $101,000.

“The contract with Northland Associates, Inc. (‘Northland’) (Q10-4866; PO# TBA) would provide for turnkey project services in connection with the furnishing, delivery and installation of a large-scale distributed wind power system on the campus of the State University of New York (‘SUNY’) at Canton.  The scope of work includes the design, permitting, equipment purchase, construction and commissioning of the wind power system, as well as operation and maintenance (‘O&M’) services for a period of five years.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 95 firms, including those that may have responded to a notice in the New York State Contract Reporter; four firms submitted proposals.  Due to the complexity of the project, as well as the range of turbine capacity options, the Evaluation Committee initiated a lengthy evaluation and review process, which determined that the larger proposed wind turbines were more cost-effective, but would require a larger open space in order to meet the setback requirements.  Accordingly, an alternate, more remote location on the campus was selected in consultation with SUNY Canton, and Authority staff issued a Post-Bid Addendum requesting that bidders submit proposals for the alternate site.  Two firms submitted proposals, which were reviewed and evaluated in greater detail, and both firms were also invited for an interview with Authority and SUNY Canton staff.  Based on the foregoing, and as further set forth in the Award Recommendation documents, staff recommends award of a contract to Northland, the most technically qualified bidder, which meets the bid requirements.

“The Project will be implemented in two phases:  Phase 1 covers the design, permitting and interconnection study; Phase 2 covers equipment procurement, construction, commissioning and a five-year O & M plan.  It should be noted that the initial Customer Installation Commitment (‘CIC’) authorized by SUNY Canton is for $400,000, which covers Phase 1 work only.  Upon successful completion of Phase 1, a separate CIC will be executed by the Customer to proceed with Phase 2.  The contract would become effective on or about July 1, 2012 for an intended term of up to eight years (including three years for the turnkey project plus five years for O & M services), 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, $6,677,550 (including contingency for any unforeseen emergent work that may arise).  It should be noted that all project costs financed by the Authority will be recovered from the Customer.  (Other anticipated funding for the project includes grants from NYSERDA and National Grid for $400,000 and $750,000, respectively.)

 

Power Supply

 

“The contract with Cemtek Systems, Inc. (‘Cemtek’) (Q12-5217; PO# TBA) would provide for field service for hardware maintenance and parts, as needed, to support the Continuous Emissions Monitoring Systems (‘CEMS’) installed in ten LM6000 units at the six Small Clean Power Plant sites located within the New York City boroughs (excluding Brentwood), in compliance with New York State Title V Permit requirements.  Services include, but are not limited to, preventive maintenance, corrective maintenance, cleaning and lubrication of equipment, equipment inspections and adjustments in accordance with all applicable standards and technical specifications, and compliance documentation and recordkeeping.  To that end, bid documents were developed by staff and 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; five proposals were received and evaluated.  A Post-Bid Addendum was issued to request pricing clarifications; three of the original bidders responded.  Based on the foregoing, staff recommends award of a contract to Cemtek, the lowest-priced 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 July 1, 2012 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, $600,000.

“The contract with EmeraChem LLC (Q12-5162; PO# TBA) would provide for chemical washing of the CO catalyst modules installed in the exhaust plenum of the LM6000 gas turbine generator units at the Small Clean Power Plants (‘SCPPs’) in order to restore catalyst performance and maintain compliance with regulatory emissions permit requirements.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 18 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Staff reviewed the two lowest-priced bids in greater detail for technical compliance and determined that the marginally lower-priced proposal included subcontracting the catalyst cleaning and performing the services on-site, which staff considers environmentally unacceptable.  Based on the foregoing and as further set forth in the Award Recommendation documents, staff recommends award of a contract to EmeraChem, the lowest technically acceptable bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under an existing contract for such work.  Furthermore, as the original equipment manufacturer, EmeraChem is uniquely qualified to provide such services, possessing specialized knowledge of the intricate molecular and chemical process by which the proprietary materials within the catalyst react with the New York City pollutant mix to cause a degradation of catalyst performance and demonstrating that its process will sufficiently restore the level of catalyst performance necessary to maintain emissions compliance.  The new contract would become effective on or about July 1, 2012 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, $1.75 million.

“The contract with First Environment Inc. (‘First Environment’) (Q12-5215; PO# TBA) would provide for consulting services involving verification of greenhouse gas emissions data reported by the Authority to the Climate Registry (‘Registry’) from all Authority facilities, to be expanded in a stepped approach during the contract term to also include microwave tower sites, substations and fuel cells, as well as the automotive fleet.  To that end, the Authority sought the services of a verification body accredited by the American National Standards Institute (‘ANSI’) and recognized by the Registry, consistent with the Registry’s General Verification Protocol and the Electric Power Sector Protocol, as applicable, for 2011 - 2013 data to be reported annually in calendar years 2012 – 2014, respectively.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 32 firms, including those that may have responded to a notice in the New York State Contract Reporter.  One proposal was received and evaluated.  Reasons for the lack of other proposals include, but are not limited to:  not their scope of work, unable to submit a competitive bid at this time or meet specification requirements, or downloaded the bid documents for information purposes only.  Based on its experience, employee qualifications, ability to perform the work and reasonable pricing, staff recommends award of a contract to First Environment, 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 July 1, 2012 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, $45,000.

“The contracts with Hawkeye LLC (‘Hawkeye’) and Underground Systems, Inc. (‘USi’) (Q12-5173; PO#s TBA) would provide for emergency repair services and related consultation, as needed, for the Authority’s land-based high-pressure fluid-filled, high-pressure gas-filled and solid dielectric underground transmission cable systems up to 345 kV located at the Niagara, St. Lawrence/FDR, Blenheim-Gilboa and 500 MW Projects, the Small Clean Power Plants, the Long Island Sound Cable Transmission Line, the Flynn Plant and the Q35 L & M cable Transmission Line.  The award of such contracts will enable the Authority to have a mechanism in place to respond in a timely manner, in case of a failure of critical land cable transmission facilities, thereby minimizing system interruptions and associated costs and precluding the need for emergency sole-source awards.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 63 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Two proposals were received and evaluated based on technical ability, schedule adherence, experience, quality of proposals and cost.  Based on the foregoing, staff recommends the award of contracts to both firms, Hawkeye and USi, utilizing their respective strengths and areas of expertise, as needed.  Both firms are qualified to perform such services, meet the bid requirements and have provided satisfactory services to the Authority under prior contracts for such work.  The new contracts would become effective on or about July 1, 2012 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $10 million.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.

“The contract with National Vacuum Corp. (‘NVC’) (N12-20067978 / 6000130459; PO# TBA) would provide for industrial cleaning services for drainage systems and galleries at the Niagara Power Project, on an ‘as needed’ basis.  Such services include furnishing all labor, tools, equipment, materials, supervision and performing all operations required to clean various concrete decks, walls, hatch covers, structures, piping systems and related appurtenances at the Robert Moses Niagara Power Project and Lewiston Pump Generating Plant, using high-pressure water jet and vacuum cleaning processes.  To that end, bid documents were developed by staff and 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 NVC, the lower-priced evaluated 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 July 1, 2012 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, $700,000, based on historical and projected usage.

“The contract with Professional Health Services, Inc. (‘PHS’) (S12-02 / 6000129499; PO# TBA) would provide for annual physical examinations for up to 200 employees at the St. Lawrence / FDR Power Project, as well as respirator clearance and fit tests and other related testing, where applicable, and as required by all applicable safety and health standards, federal and State requirements, and Authority policy and specifications.  Such services will be performed on-site in PHS mobile testing units (fully-equipped trailers).  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 12 firms, including those that may have responded to a notice in the New York State Contract Reporter; one additional firm obtained the bid documents from an alternate source.  Two proposals were received and evaluated.  Based on unit pricing submitted by the bidders, staff recommends award of a contract to PHS, the lower-priced evaluated 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 September 1, 2012 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, $142,000.

“The contract with Shred-it Buffalo (‘Shred-it’) (N12-20068684 / 6000131413; PO# TBA) would provide for secure on-site paper shredding and recycling services for the Niagara Power Project.  Services include all labor, supervision, equipment and materials (including bins and lockable containers/’totes’ for staging at designated locations) to perform weekly shredding and recycling of office paper.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 10 firms, including those that may have responded to a notice in the New York State Contract Reporter.  One proposal was received and evaluated.  The principal reasons for the lack of other proposals include, but are not limited to, not their scope of work or downloaded the bid documents for information purposes only.  Staff recommends award of a contract to Shred-it, 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 July 1, 2012 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, $30,000.

“At their meeting of June 29, 2010, the Trustees approved the continuation and funding through 2015 of contracts with eight firms for regulated/hazardous waste disposal and transport services for the operating facilities.  Since one of these previously-approved vendors, which provided bulk liquid waste disposal services, is no longer accepting such commercial waste shipments, Authority staff developed a new Request for Proposals (Q12-5171), in search of an alternative firm to provide such services.  Bid documents were downloaded electronically from the Authority’s Procurement website by 46 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Nine proposals were received and evaluated.  As the result of initial screening, which included a review of the bid proposals and online environmental compliance database searches, staff determined that six of the bids received did not exhibit the required qualifications with respect to waste water treatment capabilities and therefore were not considered further.  The remaining three proposals were evaluated in greater detail, including their qualifications, compliance history and permitted treatment capabilities, as well as an onsite Transfer Storage Disposal Facility (‘TSDF’) audit and financial screening, as further set forth in the Award Recommendation documents.  Based on the foregoing, staff recommends award of a contract to United Oil Recovery, Inc. dba United Industrial Services (‘United’) (PO# TBA), to provide for the transportation, treatment and/or disposal of liquid waste generated by the Authority’s operating facilities, on an ‘as needed’ basis and in accordance with all applicable regulatory requirements and Authority specifications.  The United facility in Meriden, CT handles hazardous and non-hazardous petroleum and aqueous liquids, can accept the widest variety of liquid waste streams, holds a wastewater discharge permit and is capable of treating industrial and other aqueous waste streams.  The facility has a good compliance record and highly qualified environmental compliance managers.  The Authority audit found the facility to be operating in compliance with its permit, displayed good housekeeping and record keeping, as well as an adequate onsite laboratory for screening incoming waste shipments.  Furthermore, the United facility is centrally located between the Authority’s downstate and upstate facilities.  Additionally, United also offers energy recovery for processed petroleum streams.  Given the potential long-term liability and cost exposure associated with such work, staff determined that the selection of United, as the most technically qualified bidder, which meets the bid requirements and has provided satisfactory service under an existing contract for related work, would limit such risk.  The contract would become effective on or about July 1, 2012 for an intended term of up to three and one-half years (coterminous with the other previously-approved waste disposal contracts), 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, $600,000.

“The Authority periodically requires the services of consultants experienced in new generation facilities, new transmission facilities, fuel supply services, and energy policy and regulatory activities.  The consultants’ analytical tools and expertise in the subject areas provide the Authority with valuable knowledge, data and analysis.  This input assists staff in identifying projects that the Authority could pursue in the future based on the changing regulatory landscape, the competitive utility industry and the Authority’s mission.  The contracts with CAI Services, P.C. (‘CAI’), CH2M Hill Engineering, P.A. (‘CH2M’), CHA Consulting, Inc. (‘CHA’), CRA International, Inc. (‘CRA’), Navigant Consulting, Inc. (‘Navigant’), Northeast Professional Engineering Consultants, LLC (‘NPE’), Power GEM LLC (‘Power GEM’), Quanta Technology, LLC (‘Quanta’), Shaw Consultants International, Inc. (‘Shaw’), Siemens Industry, Inc. (‘Siemens’) and Tetra Tech EC, Inc. (‘Tetra Tech’) (Q12-5205; PO#s TBA) would provide for such consulting services to support Authority goals and initiatives in connection with generation project evaluation and analysis; transmission project evaluation and analysis; fuel supply planning, evaluation and analysis; and energy policy development and regulatory monitoring activities.  These firms would provide a broad range of expertise with relevant experience in technical, economic, siting, and environmental aspects of power system development, on an ‘as needed’ basis.  Since the existing contracts for such services are expiring and the need for such services is ongoing, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 77 firms, including those that may have responded to a notice in the New York State Contract Reporter; twelve proposals were received and evaluated.  Staff reviewed the proposals based on evaluation criteria that included, but were not limited to: utility experience, references, ability to meet deadlines, resumes of key personnel, quality of proposal, information dissemination skills, technology transfer capabilities, hourly billing rates, and transmission system modeling capability, where applicable.  Due to the diverse nature of the required services, staff anticipated awarding contracts to three or more firms in each area of expertise.  This award strategy would afford the Authority more flexibility in obtaining sufficient resources and services when needed, ensure that a complete range of disciplines within each area of expertise would be available, allow the Authority to respond expeditiously to emergent generation and transmission needs and effectively evaluate the potential impacts of regulatory changes on the Authority’s assets.  Based on the foregoing, and as further set forth in the Award Recommendation documents, staff recommends award of contracts to eleven of the twelve firms that submitted proposals to provide services in one or more of the four distinct areas of expertise.  The eleven firms listed above submitted proposals that demonstrated their respective experience and expertise in the various disciplines and scored well on the evaluation criteria; they are qualified to perform such services and meet the bid requirements.  Several of these firms have provided satisfactory service under existing contracts for such work.  Staff determined that one of the firms that submitted proposals to provide energy policy and regulatory services lacked the required experience and therefore an award was not recommended.  The new contracts would become effective on or about July 1, 2012 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $5 million.  Funds will be allocated as specific projects or tasks are identified.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.


 

Contract Extensions and Additional Funding:

 

MED Energy Efficiency Resources & Technical Services

 

                Energy Services

“The contract with OHM’s Electrical Corp. (4500203778) provides for electrical installation services to upgrade the lighting system at the New York City Municipal Building, 1 Centre Street, as part of the Authority’s High Efficiency Lighting Program.  The original award, which was competitively bid, became effective on July 15, 2011 for an initial term of up to one year, in the amount of $753,366.  Due to delays caused by the facility’s ongoing construction work by other contractors and restricted access to the areas designated for the retrofit work planned under the subject contract, as well as changes (additions/ deletions) made by the customer regarding the designated areas, an extension of approximately eight months is now requested in order to complete the scope of work.  The current contract amount is $753,366; staff anticipates that no additional funding will be required for the extended term.  The Trustees are requested to approve an extension of the subject contract through March 31, 2013, with no additional funding requested.

Power Supply

“At their meeting of September 26, 2006, the Trustees approved the award of a contract to NAES Corp. (formerly North American Energy Services) (4500133069) to provide for the operation and maintenance (‘O&M’) of the New York City Department of Environmental Protection’s (‘NYC DEP’) East Delaware and Neversink hydroelectric facilities (‘Facilities’).  The original award, which was competitively bid, became effective on November 29, 2006 for an initial term of 19 months, with an option to extend for two additional years.  (There are provisions in the contract to extend the contract term for additional periods of time, to a maximum of nine additional years; requests to exercise any such further renewal options and approval of additional funding beyond the current levels will be presented to the Trustees for review and approval as needs arise.)  Several incremental additional funding increases, as well as contract term extensions, were subsequently authorized by the Trustees, most recently at their meeting of June 28, 2011, when the approved compensation limit was increased to $13,749,957.  Since the need for such services is ongoing and the contract provides the aforementioned option for additional extension(s), a two-year extension is now requested to provide for the continuation of such services through June 30, 2014.  The current contract amount is $13,700,956; staff projects that an additional $4.21 million will be required for the extended term ($2.6 million for O&M services and $1.61 million to support new and/or ongoing capital projects that have been identified and agreed to by the NYC DEP for the extended term).  The Trustees are requested to approve extension of the subject contract through June 30, 2014, as well as the additional funding requested, thereby increasing the approved contract value to $17,959,957.  All contract renewals between the Authority and NAES are subject to the Operating Agreement between the Authority and NYC DEP.  The City of New York, acting through NYC DEP, will reimburse the Authority for all direct and administrative costs.

 

“At their meeting of December 16, 2008, the Trustees approved the award and funding of a three-year contract to Siemens Power Transmission & Distribution, Inc. (now Siemens Energy Inc.; 4500166943) to provide for the design, furnishing, delivery, installation, testing and commissioning of a Switchyard Automated Monitoring and Control System (‘SAMAC’) at the St. Lawrence/FDR Power Project, as part of the Authority’s Protective Relay Replacement Program.  The subject contract, which was competitively bid, became effective January 1, 2009 for an approved amount of $3,305,903.  The scope of work includes, but is not limited to: furnishing protective relaying and control intelligent electronic devices (‘IEDs’), equipment and associated relay cabinets, redundant master and backup substation computers, substation fiber optic communications network equipment, system integration tools, development of system drawings and functional diagrams, testing, training and site commissioning.  Technical issues related to development of the system delayed the Siemens design of the SAMAC system and caused the manufacturing to be delayed by one year.  A nine-month extension and an additional $472,263 were authorized in accordance with the Authority’s Guidelines for Procurement Contracts and EAPs.  The SAMAC system was installed in the First Quarter of 2012 and site acceptance testing is currently underway.  Staff has identified a number of additional technical modifications necessitated by new NERC CIP compliance-related requirements for additional security measures and other related requirements to be implemented by Siemens prior to system startup and cutover.  An additional one-year extension is now requested to complete the required modifications and to support cutovers.  The current contract amount is $3,778,166; staff estimates that an additional $755,000 may be required for the extended term.  The Trustees are requested to approve an extension of the subject contract through September 30, 2013 and the additional funding requested, thereby increasing the approved contract value to $4,533,166.

FISCAL INFORMATION

“Funds required to support contract services for various Business Units/Departments and Facilities have been included in the 2012 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 certain contracts in support of Energy Services Programs will be made from the Energy Conservation Effectuation and Construction Fund.

RECOMMENDATION

“The Deputy General Counsel, the Senior Vice President – Power Supply Support Services and Chief Engineer, the Senior Vice President – Generation, the Vice President – Project Management, the Vice President – Engineering, the Vice President – Environment, Health and Safety, the Vice President – Energy Efficiency, the Vice President – Procurement, the Vice President – Project Management, Licensing and Compliance, the Vice President – Human Resources, the Vice President – Transmission, the Director – Asset and Maintenance Management, the Regional Manager – Northern New York, the Regional Manager – Central New York, the Regional Manager – Western New York and the Regional Manager – Southeastern New York recommend that the Trustees approve the award of multiyear procurement (services) contracts to the companies listed in Exhibit ‘4f-A’ and the extension and additional funding of the procurement (services) contracts listed in Exhibit ‘4f-B,’ for the purposes and in the amounts discussed within the item and/or listed in the respective exhibits.

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

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

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, the award and funding of the multiyear procurement services and other contracts set forth in Exhibit “4f-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 “4f-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.


 

g.                   NYPA Fleet Vehicles – Transfer of Ownership to the New York State Office of General Services

 

The President and Chief Executive Officer submitted the following report:

               

SUMMARY

“The Trustees are requested to approve the transfer of ownership of ten Authority fleet vehicles to the New York State Office of General Services (‘OGS’) for use by OGS in furtherance of its strategic goal to minimize state expenditures and become as efficient as possible in the use of all resources at their disposal.

 

DISCUSSION

                “In September 2011, the Trustees challenged the newly appointed Executive Management Committee to reduce overheads, streamline the organization and explore shared services opportunities.  Concurrently, Governor Cuomo directed all New York State agencies and authorities to achieve savings for the state, while improving efficiencies and streamlining government.  Numerous recommended cost savings measures and overhead reductions have been implemented and staff continues to access new opportunities for continuous improvement.

 

                “In support of the Authority’s ongoing assessments, the Corporate Support Services Fleet department has completed a fleet optimization study reassessing motor pool needs across all Authority facilities.  Staff has also reevaluated the Authority’s assigned vehicle policy, which reduced the number of ‘take-home’ vehicles.  These two actions have resulted in an excess of ten fleet vehicles.  Consequently, staff has concluded that it is prudent to dispose of these vehicles which have a combined appraised fair market value of $165,300 (Exhibit ‘4g-A’). 

 

                “By the attached letter, (Exhibit ‘4g-B’), OGS expressed interest in obtaining ownership of the vehicles as an addition to the state’s vehicle pool.  The purpose of the transfer is to facilitate OGS’s expanded role in providing essential support and administrative services for the operations of state government, while reducing costs to New York taxpayers and increasing efficiencies across all agencies. 

 

“OGS advises that the current OGS fleet of vehicles is limited in size, constricted by high mileage and vehicle age and maintenance issues.  OGS’s budget does not allow for the purchase of additional vehicles so the transfer of these vehicles to OGS will result in benefits to the public with the execution of these sustainable enterprise initiatives through cost reductions to the state, public authorities, local governments, school districts and the public.

               

“Title 5-A of Article 9 of the Public Authorities Law (the ‘Act’) and the Authority’s Guidelines for the Disposal of Personal Property (the ‘Guidelines’) allow the Authority, with the approval of the Trustees, to dispose of Authority property by negotiation and for less than fair market value if the transferee is a government or other public entity and the terms and conditions of the transfer require that the ownership and use of the Property will remain with the government or any public entity.

 

“The transfer is to be further conditioned upon the execution of an agreement between OGS and the Authority.  The terms of such an agreement are to include transferring the vehicles in their ‘as is’ condition and such additional provisions that reasonably safeguard the Authority from future responsibility and liability.

 

FISCAL INFORMATION

 

“In accordance with the foregoing, the vehicles will be transferred to the Office of General Services without payment to the Authority.

                 

RECOMMENDATION

“The Senior Vice President – Corporate Support Services recommend that the Trustees approve the transfer of ownership of ten Authority fleet vehicles to the New York State Office of General Services.

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

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

 

RESOLVED, That in order to accomplish the State’s efficiency and budgetary goals expressed to the Authority by the New York State Office of General Services (“OGS”) in Exhibit “4g-B” to the accompanying memorandum, there is no reasonable alternative to OGS’s proposal; and be it further.  

 

RESOLVED, That pursuant to Title 5-A of Article 9 of the Public Authorities Law, the Guidelines for the Disposal of Personal Property and the Power Authority Act, the Trustees hereby approve the transfer of ownership of the ten fleet vehicles listed in Exhibit “4g-A” to the accompanying memorandum to OGS for use by OGS in accordance with its vehicle use policies; 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.


 

h.                  Allocation of Expansion Power    

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve an allocation of available Expansion Power (‘EP’) totaling 4,000 kilowatts (‘kW’) to Welded Tube USA, Inc., as described herein and detailed in Exhibit ‘4h-A.’  The allocation of hydropower will support a capital investment of $48.25 million and the creation of 121 jobs in Western New York.

 

BACKGROUND

 

“Under §1005(13) of the Power Authority Act, as amended by Chapter 313 of the Laws of 2005, the Authority may contract to allocate 250 megawatts (‘MW’) of firm hydroelectric power as EP and up to 445 MW of Replacement Power (‘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 and RP must be evaluated under criteria that include, but need not be limited to, those set forth in Public Authorities Law (‘PAL’) Section 1005(13)(a), which details 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.

 

“The Authority works closely with business associations, local distribution companies and economic development entities to garner support for the projects to be recommended for allocations of Authority hydropower.  Discussions routinely occur with National Grid, Empire State Development Corporation, the Buffalo Niagara Enterprise and Niagara County Center for Economic Development and Erie County Industrial Development Agency to coordinate other economic development incentives that may help to bring projects to New York State.  Staff confers with these entities to help maximize the value of hydropower to improve the economy of Western New York and the State of New York.

 

DISCUSSION

 

                “At this time, there is 12,975 kW of unallocated EP and 26,818 kW of unallocated RP that are available to be awarded to businesses under the criteria set forth in PAL Section 1005(13)(a).  One company has applied for hydropower as described below.

 

                “Welded Tube USA, Inc. (‘Welded Tube’) submitted an application requesting 9,000 kW of hydropower to serve a new pipe manufacturing operation at the Tecumseh Business Park (the former Bethlehem Steel site) in Lackawanna, New York.  The request consists of electric load associated with the equipment for the new production line and some ancillary electric load at the new facility.

 

“Staff recommends that an EP allocation of 4,000 kW be awarded to Welded Tube in return for an investment of $48.25 million and creation of 121 jobs at its new facility in Lackawanna.  The company will be allowed to phase-in use of the 4,000 kW allocation upon satisfying capital spending and job creation milestones that are being discussed in the incentive package under consideration.  This recommendation is described in Exhibit ‘4h-A-1’ showing, among other things, the amount of power requested by the applicant, the recommended allocation amount and the applicant’s commitment to job creation and capital investment.  Additional information on the project is contained in the application summary attached as Exhibit ‘4h-A-1.’

 

“Welded Tube of Canada, the applicant’s parent company, is a multi-faceted cold-formed carbon and high-strength low-alloy tubular steel producer headquartered in Concord, Ontario.  Welded Tube USA, Inc. will be producing the same products manufactured by the parent company at its Canadian operations.  The creation of this start-up facility in Western New York is a result of the growing energy tubular industry.  The company is considering locating in the business park, a designated Brownfield site, to produce steel tube drilling pipe to be used in the extraction of oil and natural gas.  Post production, the tubing will be exported to Canada for finishing prior to being sold to distributors in the United States and Canada. 

 

                “With this project, Welded Tube commits to add 121 new jobs to operate and manage this new manufacturing facility.  The job creation ratio for a recommended amount of 4,000 kW is 30 new jobs per MW; this ratio is above the recent historic average of 17.5 new jobs per MW.  The total project investment of $48.25 million will result in a capital investment ratio of $12 million per MW; this ratio is below the recent historic average of $22.4 million per MW.

 

“An allocation of hydropower would help incentivize the parent corporation to bring the production to Western New York rather than other attractive sites outside of the state.  In particular, the State of Alabama is offering an incentive package for Welded Tube to bring its plant to the Southern U.S.  The company also has two options under consideration in Ontario – to expand an existing facility or locate to a neighboring property – both providing logistical advantages.

 

“Additionally, low-cost hydropower is one component of a larger incentive package offer being considered by several organizations including Empire State Development Corporation, National Grid, New York Job Development Authority and NYPA.  In summary, the incentives range from tax credits to Brownfield real property credit.  The company is also being offered assistance from National Grid through its infrastructure grant program.

 

                “The Authority’s hydropower allocation amounts are subject to enforceable employment and usage commitments.  The standard contract includes annual job reporting requirements and a job compliance threshold of 90%.  Should the customer’s actual jobs reported fall below the compliance threshold, the Authority has the right to reduce the allocation on a pro-rata basis.  For the period July 1, 2013 and beyond, the allocations will be sold to the customers under a direct sale arrangement, the contract for which may be brought before the Trustees for approval at that time.

 

RECOMMENDATION

 

“The Senior Vice President – Economic Development and Energy Efficiency, the Vice President – Marketing and the Manager – Business Power Allocations and Compliance recommend that the Trustees approve an allocation of hydropower totaling 4,000 kW to Welded Tube USA, Inc. as detailed in Exhibit ‘4h-A.’

 

                “For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That an allocation totaling 4,000 kW of Expansion Power to Welded Tube USA, Inc., as detailed in Exhibit “4h-A,” be, and hereby is, approved on the terms set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the 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.                     Municipal and Rural Electric Cooperative Economic Development Program – Allocations to City of Salamanca and the Village of Skaneateles  

 

                 The President and Chief Executive Officer submitted the following report:

SUMMARY

 

“The Trustees are requested to approve allocations totaling 210 kW of hydropower under the Municipal and Rural Electric Cooperative Economic Development Program (‘Program’) to the City of Salamanca and the
 Village of Skaneateles.

BACKGROUND

 

“The 1991 amendment to the Power Sales Agreement between the Authority and the Municipal and Rural Electric Cooperative Systems set aside a block of 54 MW from the 752 MW of hydropower allocated to the systems for economic development in the systems’ service territories.  The total allocation was increased to 764.8 MW as a result of additional power from the Niagara Project upgrade. 

 

“Power from this block can be allocated to individual systems to meet the increased electric load resulting from eligible new or expanding businesses in their service area.  Recommended allocations under the Program will
 now be made using guidelines that were approved by the Trustees on September 23, 2008.  Under the revised program, the first 100 kW allocated will be 100 % hydropower and any additional kW at 50% hydropower and 50% incremental power. 

 

“As of March 27, 2012, the amount allocated totaled 32,135 kW.  The City of Salamanca and the Village of Skaneateles have submitted applications for power under the Program for consideration by the Trustees.

 

DISCUSSION

 

Salamanca (Seneca Allegany Casino & Hotel)

 

“An application has been submitted to the Authority by the City of Salamanca on behalf of Seneca Allegany Casino & Hotel (SAC&H).  SAC&H is a regional resort and entertainment destination with multiple AAA Four Diamond distinction awards.  SAC&H plans for a hotel expansion with an anticipated completion date of December 2012.  The expansion is expected to include a capital expenditure of approximately $53 million dollars; result in an additional 209 resort style rooms and suites; generate approximately 22 full-time jobs and, an additional 3 part-time jobs, in addition to further supporting the existing 1,054 jobs (full-time and part-time) at SAC&H.

 

“SAC&H’s expansion is expected to increase tourism and recreational opportunities in the area by attracting additional visitors from Western New York, Pennsylvania, Ohio and Canada.  This hotel expansion will offer regional visitors new upscale amenities along with additional access to all of the activities offered in the region. The hotel expansion will add an approximately 600 kW to the existing 3,600 kW electric load.

 

“The region of Seneca Allegany is a popular destination, attracting visitors to partake in the abundant outdoor activities offered by the region such as winter skiing, snowmobiling, hiking, and summer outdoor activities amongst the spectacular fall foliage of the Allegany Mountains.  In 2011, SAC&H welcomed over 1.5 million tourists and it intends to attract and accommodate additional visitors with its hotel expansion.

 

“The Authority’s economic development program guidelines classifies this as an eligible business expansion because it is categorized as a tourism business whose purpose is to develop recreational, cultural or historical facilities likely to attract significant numbers of visitors, including ‘destination retail projects.’  The allocation request is not for the casino portion of the property, but rather to serve the hotel expansion that is being made to the facility.

 

This allocation enables the Authority to work closely with the City of Salamanca to coordinate a positive response to New York State tourism economy and spurring the local economy of Cattaraugus County in the Western New York region.

 

“It is recommended that the Trustees approve an allocation of 110 kW of Municipal and Rural Electric Cooperative Economic Development power for the City of Salamanca on behalf of SAC&H.  SAC&H has an existing 876 full-time jobs, 178 Part time jobs and will be adding 22 new full-time jobs.  The program guidelines allow for a minimum of 200 jobs per MW of hydropower to be attained; this allocation is equivalent to 200 jobs per MW of hydropower.

 

Skaneateles (Skaneateles Recreational Charitable Trust)

 

An application has been submitted to the Authority by the Village of Skaneateles on behalf of Skaneateles Recreational Charitable Trust (SRCT).

 

SRCT’s recreation center is the focus of much of the day-to-day activity in the Village of Skaneateles and provides a diverse range of activities to its residents.  In 2002, SRCT completed the construction of the current 80,000 square-foot center.  Its 2,600 square-foot member center is used by the central school district, the youth hockey association and the Skaneateles figure skating club, among other organizations.  The expansion will create an additional 42,468 square- foot to the existing center, providing a location for a diverse array of programs, activities and organized sports.  The recreation center has become a key part of the community that surrounds it and through this expansion it will respond to the specific needs and expectations of those residents.  The expansion includes a second ice rink, new basketball courts, expanded fitness areas and additional community rooms.  The expansion is expected to include a capital expenditure of approximately $4.9 million dollars.

 

In an addition to the committed investment, this expansion will create approximately 5 full-time jobs, as well as retain the center’s existing 19 full-time jobs.  The total committed full-time employees working at the center (within the next 3 years) would be 24 employees.  The expansion will add approximately 416 kW to the existing 225 kW electric load.

 

“It is recommended that the Trustees approve an allocation of 100 kW of Municipal and Rural Electric Cooperative Economic Development power for the Village of Skaneateles on behalf of SRCT.  SRCT has an existing 19 full-time jobs and will be adding 5 new full-time jobs.  The program guidelines allow for a minimum of 50 jobs per MW of hydropower to be attained; this allocation is equivalent to 50 jobs per MW of hydropower.

RECOMMENDATION

 

“The Senior Vice President – Economic Development and Energy Efficiency and the Vice President – Marketing recommend that the Trustees approve the allocations of hydropower, totaling 210 kW, under the Municipal and Rural Electric Cooperative Economic Development Program, to the City of Salamanca and the Village of Skaneateles in accordance with the above.

 

                “For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That the allocations of hydropower to the City of Salamanca and the Village of Skaneateles under the Municipal and Rural Electric Cooperative Economic Development Program is hereby approved as set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Senior Vice President – Economic Development and Energy Efficiency or his designee be, and hereby is, authorized to execute any and all documents necessary or desirable to effectuate this allocation, 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, 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.                     Authorization to Fund Statewide Energy Services Program Engineering, Design and Construction Services – Contract  Awards

             

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of contracts for Engineering, Design and Construction services to PRES Services LLC (‘PRES Energy’), Parsons Brinckerhoff, Inc. (‘Parsons Brinckerhoff’) and Cannon Design-Build, Inc. (‘Cannon Design’) in the amount of $200 million, in aggregate, in support of the Authority’s Statewide Energy Services Program (‘Statewide ESP’).  The term of these contracts will be five years.  Funding will be provided from the $833 million previously approved by the Trustees at their May 26, 2010 meeting; therefore, no additional program funding is requested at this time.  All project costs will be recovered from program participants.

 

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.

 

In accordance with the Authority’s Expenditure Authorization Procedures, the award of non-personnel services or equipment contracts in excess of $3 million, as well as personnel services contracts in excess of

$1 million if low bidder, or $500,000 if sole source or non-low bidder, requires the Trustees’ approval.

The Authority’s mission is to provide clean, economical and reliable energy consistent with its commitment to safety, while promoting energy efficiency and innovation for the benefit of its customers and all New Yorkers.  In that regard, since the late 1980s, the Authority has provided energy services programs throughout New York State (‘NYS’).  In aggregate, the Authority’s energy services programs have been very successful, and to date, the Authority has achieved nearly $143 million in annual customer savings at about 4,506 public facilities, including schools, hospitals and municipal buildings, for a reduction of annual greenhouse gas emissions of more
than 846,000
tons.

NYS has been at the forefront of creating a more sustainable and cleaner future with initiatives such as the NY-Sun Initiative and Energy Highway Project.  On April 26, 2012, Governor Cuomo announced increased investments in clean energy and environmental projects through the Authority and NYS Energy and Research Development Authority (‘NYSERDA’), including $450 million commitment to reduce energy consumption in state buildings by 20% over the next four years which will result in significant benefits for the environment.   In addition, the Authority also intends to finance an additional $350 million over the next four years to provide energy efficiency financing and technical services to county and local governments and schools, to help lower local government costs for taxpayers.  

The Authority provides services that include feasibility studies and energy master plans, engineering designs, life-cycle cost analyses, procuring equipment, contractor labor, hazardous waste disposal, managing projects/construction and financing projects.  Measures include, but are not limited to: energy-efficient lighting and controls; building envelope-related improvements; heating ventilation and air-conditioning modernization, including energy-efficient chillers, boilers and controls; high-efficiency motors; variable-speed drives; energy management systems (‘EMS’); process controls and distributed generation and a variety of beneficial electrification technologies.

 

DISCUSSION

As the general contractor for the Statewide ESP, the Authority contracts for the installation of ESP measures with Implementation Contractors (‘ICs’).  The services provided by the ICs complement the Authority’s headquarters and field office resources.  The ICs’ scope-of- work generally consists of the following:

·            On-site screenings of customers’ facilities to determine which ones are likely candidates for clean energy technologies projects and/or for realizing significant energy and operational cost savings from energy efficiency measures;

·            On-site surveys, energy audits, technical feasibility studies and energy master plans to identify potential applications for clean energy or energy efficiency measures approved for the Statewide ESP;

·            Detailed engineering studies and analyses of specific ESP measures or systems

·            Design of proposed systems and/or measures;

·            Preparation of project proposal documents and solicitation of competitive bids

·            Procurement of equipment and installation services;

·            Construction management and oversight of proposed system and/or equipment installation and project closeout (including waste management).

In addition, ICs are required to work directly with the customer/program participants from facility audit to final acceptance of equipment installation.  Procurement of materials and installation of the recommended ESP measures are competitively bid by the ICs and the ICs are required to guarantee the quality of all work performed.

 

“On March 7, 2012, the Authority advertised in the New York State Contract Reporter a Request for Proposals (‘RFP’) soliciting firms interested in providing the aforementioned services for Engineering, Design and Construction.  In response to the advertisement and invitation to bid, 192 firms received the RFP packages.  On March 20, 2012, a mandatory pre-bid conference for those bidders who registered on the Authority’s Web site was held in the Jaguar Room at the Authority’s White Plains Office to explain the proposed scope-of-work and provide an opportunity for potential bidders to ask questions and seek clarification.  Twenty-nine (29) firms attended the mandatory pre-bid conference.  The RFP was divided into three solicitations: Engineering Design and Construction Services; Additional Services; Retro-commissioning.  The Bidders were instructed to bid on any or all three geographic regions.  The geographic regions are broadly defined as Downstate, Northeast and Western New York.

 

 On April 24, 2012, eleven firms submitted bids for the aforementioned services.  The bid evaluation committee reviewed the proposals and based on the evaluation of the firms’ relevant experience and fees staff recommends the award of contracts for Engineering, Design and Construction Services to the three most qualified and overall lowest-cost bidders in the Downstate, Western and Northeast New York regions: PRES Energy, Parsons Brinckerhoff, and Cannon Design.  Two contracts are recommended for each region based on the anticipated level of program activity and to ensure the availability of qualified resources in the event that the performance of a contractor does not meet the Authority’s expectations.

 

PRES Energy

 

“PRES Energy is currently under contract for design and implementation services for Statewide ESP and as such, its proposal clearly showcases relevant experience in the design and construction management required as described in the RFP.  PRES Energy provided pricing for Downstate, Western and Northeast New York regions and they are recommended for all three regions.  PRES Energy fully understands the Authority’s processes and has proven program experience.  The company’s staffing and work plan are the same as those under its current contract.  The evaluation committee reviewed PRES Energy’s performance history, specifically evaluating its performance on the completed $12 million project at SUNY Buffalo.  PRES Energy has demonstrated its ability to meet the requirements of the ESP successfully under its previous contract.  PRES Energy’s headquarter office is in Buffalo with NYS satellite offices in Rochester and Syracuse.

 

Parsons Brinckerhoff

 

“Parsons Brinckerhoff provided pricing for the Northeast and Downstate New York regions and the firm is recommended for both regions.  Parsons Brinckerhoff is currently under contract for project management and implementation services for Statewide ESP and therefore fully understands the Authority’s processes.  With offices established in Albany and New York City, Parsons Brinckerhoff’s staffing and work plan, as described in its proposal, will enable it to be effective in both regions.  The evaluation committee reviewed Parsons Brinckerhoff performance history and concluded that it has satisfactorily completed projects with the Albany Central School District and is also currently managing several projects successfully.  In addition, Parsons Brinckerhoff has demonstrated its ability to meet the requirements of the RFP, including working with NYS agencies such as the NYS Education Department and the NYS Office of General Services.  Parsons Brinckerhoff’s headquarters office is in New York City with a satellite office in Albany.

 

Cannon Design

 

“The proposal submitted by Cannon Design demonstrated relevant experience in the design and construction management of energy efficiency measures described in the RFP. Cannon Design provided pricing for the Western New York region only and is the second lowest bidder for the region.  Cannon Design is new to the Authority’s programs and as such, the evaluation committee conducted a detailed review of its proposal.  Cannon Design was able to clearly and successfully demonstrate to the committee its ability to satisfy the requirements of the RFP. Cannon Design has offices in Buffalo and New York City.

 

FISCAL INFORMATION

 

“The financing of these contracts will be provided by the previously approved $833 million funding for the Statewide ESP approved by the Trustees at their May 26, 2010 meeting. The funding will be provided from the proceeds of the Authority’s Commercial Paper Notes and/or the Operating Fund.  In addition, projects may be funded, in part, with monies from Petroleum Overcharge Restitution (‘POCR’) funds.  An initial allocation of $20 million will be made to PRES Energy and Parsons Brinckerhoff and a $10 million allocation will be made to Cannon Design.  Additional allocations will be based on each firm’s performance and subject to the approval limits for execution of commitments in the Authority’s then-current Expenditure Authorization Procedures (or equivalent limits set forth in any successor procedures).  All Authority costs, including Authority overheads and the costs of advancing funds, but excluding the POCR grants, will be recovered consistent with other Energy Services programs.

 

RECOMMENDATION

 

The Senior Vice President – Economic Development and Energy Efficiency and the Vice President – Energy Efficiency recommend that the Trustees approve the award of contracts for Engineering, Design and Construction Services to PRES Services LLC, Parsons Brinckerhoff, Inc. and Cannon Design-Build, Inc. for up to $200 million, in aggregate, for a term of five-years.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

 

RESOLVED, That the Trustees authorize the President and Chief Executive Officer, the Chief Operating Officer, the Vice President – Energy Efficiency or such other officer designated by the President and Chief Executive Officer to execute agreements and other documents between the Authority and Statewide Energy Services Program (‘Statewide ESP’) participants and to execute agreements and other documents with Implementation Contractors, such agreements having such terms and conditions as the executing officer may approve, subject to the approval of the form thereof by the Executive Vice President and General Counsel, to facilitate the development of the Statewide ESP and that the authorized funding level for the Statewide ESP of $833 previously authorized remains, as listed below:

 

                                                Commercial Paper Program/                                                  Statewide ESP

                                                                        Operating Fund/ POCR                                                                Authorization

                                                Previously Authorized                                                                   $833 million

                                                Additional Funding                                                                              $0 million

                                                Total Amount                                                                                        $833 million

 

AND BE IT FURTHER RESOLVED, That in accordance with the Guidelines for Procurement Contracts adopted by the Authority and the approved limits for execution of commitments in the Authority’s then-current Expenditure Authorization Procedures (or equivalent limits set forth in any successor procedures), $200 million of the foregoing amount be allocated in aggregate to the approved contracts with PRES Services LLC, Parsons Brinckerhoff, Inc. and Cannon Design-Build, Inc. for a five-year term ending June 30, 2017 in the amount and for the purpose listed below:

                                                                                                                                                 

                                                Commercial Paper /                          Expenditures Authorization

                                                Operating Funds/POCR                                   (not to exceed)

 

PRES Services LLC

Parsons Brinckerhoff, Inc.

Cannon Design-Build, Inc.

$200 million (aggregate)

Funds will be allocated based on contractor performance and areas of specialization.  Initial allocations of $20 million each will be made to PRES Energy and Parsons Brinckerhoff and $10 million will be allocated to Cannon Design

 

AND BE IT FURTHER RESOLVED, That the Authority’s Commercial Paper Notes, Series 1, Series 2 and Series 3, may be issued and Operating Fund monies may be used to finance Statewide ESP costs; and be it further

               

RESOLVED, That the Vice President – Energy Efficiency is authorized to determine which projects in the Statewide ESP will be deemed to be energy services projects within the meaning of Section (7) of Part P of Chapter 84 of the Laws of 2002 (the ‘Section (7) POCR Legislation’) to be funded in part with Petroleum Overcharge Restitution (‘POCR’) Funds allocated pursuant to the Section (7) POCR Legislation; and be it further

 

RESOLVED, That POCR funds allocated to the Authority by the Section (7) POCR Legislation may be used to the extent authorized by such legislation, in such amounts as may be deemed necessary or desirable by the Vice President – Energy Efficiency to finance Statewide ESP projects; 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 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.                   Niagara Power Project – Winter Mooring Site – First Buffalo River Marina – Capital Expenditure

                                                                                               

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to authorize capital expenditures in the amount of $6,225,000 for the modifications and upgrades required at the First Buffalo River Marina (‘Marina’), the Authority’s winter mooring site for vessels used during ice boom operations.

 

“The total Capital Expenditure Authorization Request for this program is $11,300,000.  Funding in the amount of $5,075,000 was previously authorized for procurement of the property, preliminary engineering and construction work. 

 

BACKGROUND

“In accordance with the Authority’s Expenditure Authorization Procedures, capital expenditure authorizations in excess of $3 million require Trustees approval.

 

“At their June 29, 2010 meeting, the Trustees approved the acquisition of the Marina in the amount of $4,400,000.  The property was purchased as it is needed for the storage and work area for the Authority’s barge, two tugboats and ice-breaking vessel used to annually install, maintain and remove the Lake Erie Ice Boom.  The Authority took title to the property on October 10, 2010.  This site requires several modifications and upgrades to meet the Authority’s operational requirements and to continue the function of a safe-operating marina.  Subsequently, at their March 29, 2011 meeting, the Trustees approved a contract of up to five years for a marina management firm to operate, maintain and manage the Marina on the Authority’s behalf.

 

DISCUSSION

                “In 2003, the City of Buffalo issued a demolition order for the existing storage building on the property.  After acquiring the property, the Authority awarded a contract and demolished this building in 2011.

 

“Staff anticipates awarding three contracts for completing the necessary site improvements.  The first contract will be to secure the dilapidated Connecting Terminal Grain Elevator (CTGE).  The CTGE has deteriorated and poses a safety risk to Authority personnel working on the property as well as Marina customers.  The scope-of-work includes the removal of the collapsed remains of the headhouses atop the CTGE, installation of concrete planks to cover silo openings to prevent water intrusion, netting the roof to prevent any potential future debris from blowing off or falling from the CTGE, securing window and door openings and the installation of a perimeter security fence to prevent unauthorized access.  Securing of the silos will be completed by the end of 2012.

 

“To uphold the Authority’s commitment to continue operation of the Marina, a contract for a new travel lift to launch and retrieve customers’ vessels will be procured in 2013 as the existing travel lift is exhibiting signs of excessive wear and is approaching the end of its useful life.  Finally, the existing docks are in state of disrepair, causing a safety issue for Marina customers and their vessels, as well as a liability concern for the Authority and the Marina operator.  A contract will be awarded to procure new docks in 2013.

 

               

 

“The total project cost is estimated at $11,300,000 as follows:

 

                                                                                                Previously                     Current                      Total

Authorized                    Request                     Authorized                                               

Preliminary Engineering and Design                                $    125,000                   $ 0                              $   125,000

 

Detailed Engineering and Design                                      $      63,000                   $   315,000                $    378,000

 

Marina Site Procurement                                                   $ 4,445,000                  $ 0                              $ 4,445,000

 

Total Construction/Installation                                        $    110,000                   $5,390,000               $ 5,500,000

               

Authority Indirect and Direct Expenses                          $    332,000                   $   520,000                $     852,000

 

                                                                TOTAL                  $5,075,000                   $6,225,000               $11,300,000

 

                “Funding in the amount of $2,050,000 has been included in the 2012 approved Capital Budget.  Future funding for 2013 will be included in the Capital Budget request for that year.

 

FISCAL INFORMATION

 

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

 

RECOMMENDATION

“The Senior Vice President and Chief Engineer – Support Services Operations, the Vice President – Project Management, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees approve capital expenditures in the amount of $6,225,000 for the modifications and upgrades required at the First Buffalo River Marina, the Authority’s winter mooring site for vessels used during ice boom operations.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

               

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to authorize capital expenditures in the amount of $6,225,000 for the modifications and upgrades required at the First Buffalo River Marina, the Authority’s winter mooring site for vessels used during ice boom operations, 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 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.

 

 

 

5.                   Discussion Agenda:

 

a.                   Report of the President and Chief Executive Officer

 

On behalf of the Authority's staff, President Quiniones welcomed Chairman Koelmel and Trustees Flynn and Mahoney to the Board.

Corporate Performance Measures

President Quiniones provided an update of the Authority’s performance to date.  He said the Authority is meeting its goals as outlined in the Corporate Performance Measures and continues to perform at a high level. 

In response to a question from Trustee Jonathan Foster, President Quiniones said 30 – 40 percent of the Authority’s employees will be eligible for retirement over the next five years.  The Authority is exploring succession planning for all levels of staff, not just at the senior level.  He has directed the executive management team to analyze their business unit staffing with a goal to ensure the Authority has an appropriate succession plan for the next 5 – 10 years.  He then provided an update of the Authority’s key initiatives based on the Governor’s directive during his state of the state address.

Energy Highway

President Quiniones said the goal of the Energy Highway Task Force, which the Authority co-chairs, is to create an Action Plan to revitalize the generation and transmission systems to submit the Action Plan to the Governor.  To that end, a Request for Information (“RFI”) seeking ideas from the private sector and financial institutions was issued on April 11.  As of May 30th, 85 responses consisting of 125 individual generation and transmission projects comprising 20,000 MW of new capacity were received.

The task force will analyze the responses and submit an Action Plan for the state’s aging infrastructure and the advancement of its energy, economic development and environmental goals to the Governor. 

In response to a question from Chairman Koelmel, President Quiniones said he will report any action by the Task Force to the Board.  Also, in an effort to be transparent, responses to the RFI will be posted on the New York Energy Highway Web site. 

Energy Efficiency

President Quiniones said that the Authority is the lead agency to implement the Governor’s goal to upgrade the state’s facilities in order to reduce energy consumption by 20%.  To that end, the Authority will finance and implement energy efficiency projects totaling $800 million over the next four years.  In response to a question from Trustee Nicandri, President Quiniones said the energy efficiency projects will result in a significant reduction in energy consumption in all state buildings.

 

b.                   Report of the Chief Operating Officer

                Mr. Edward Welz provided highlights of the report to the Trustees. 

Performance Summary

 

Construction Update

 

St. Lawrence/FDR Power Project Life Extension and Modernization Program:

Lewiston Pumped-Generation Plant Life Extension and Modernization Program:

Niagara Power Project:

 

Organizational Review

               

Mr. Welz reported that, in response to a directive from President Quiniones, and after discussions with the Consultant engaged to review the Operations Business Unit as it relates to succession planning and the imminent retirement of senior staff, organizational changes were recommended and approved by the Governance Committee.   In response to a question from Chairman Koelmel, Mr. Welz said that all organizational changes within the Operations business unit will be completed by the end of the year.

In response to a question from Trustee Nicandri, Mr. Welz provided the following updates:

 

·         Niagara Project Upgrade – An upgrade to the turbines was done in order to increase the output at the Niagara Project.

·         St. Lawrence Life Extension and Modernization Program – An upgrade of the 16 Units will be completed next year.

·         Blenheim-Gilboa Power Project Life Extension and Modernization Program – This was a 4-year program to increase output at the Project by 120 MW.  Work on this project ended in 2010 at a cost of 135 million. 

·         Lewiston Pumped Generating Plant Life Extension and Modernization Program –This 8-year program to upgrade 12 units at the Niagara facility is scheduled to be completed in 2020 at a cost of $460 million.

In response to a question from Chairman Koelmel, Mr. Welz said he had some concerns with regards to forced outages at the Small Clean Power Plants (“SCPP”) which were installed in the Southeastern New York (“SENY”) area in 2001.  A program was, however, put in place to refurbish them on a regular basis, and this has alleviated his concerns. 


c.                    Report of the Chief Financial Officer

 

                Mr. Donald Russak provided highlights of the financial report to the Trustees.

Net Income

Net income through May was $118 million, prior to the recognition of the $60 million voluntary contribution to New York State. This is $14 million higher than budget.

Margins on market-based sales were largely on budget as the positive impact of higher net generation (due to the early spring run-off) was offset by lower energy prices

Year-End Projections

Developing trends indicate year-end net income for 2012 is expected to under-run by about $6 million relative to the $167 million budget.  These trends include:

Energy Prices – A mild winter and low natural gas prices continue to depress market prices for energy.

Capacity Prices – An increase in market-based capacity prices are being observed as result of increase in reserve requirements and the announced moth-balling of several generating stations throughout New York in response to lower prices and lower demand.

Hydro Flows – Net generation at the Niagara and St. Lawrence hydroelectric facilities, which was running above budget, is now trending towards under-running for the latter part of the year.

O&M and Other Expenses – O&M is expected to finish the year near target, however, certain new, other expenses are now captured in the forecast, including: obligations relating RNY Transitional Energy Discounts and Energy Efficiency Market Acceleration Program, both being considered by the Board today.

At currently projected levels, business requirements for cash flow (debt service coverage) and liquidity are expected to be met.

In response to a question from Trustee Mahoney, Mr. Russak said most of the Authority’s generation is sold to customers under low cost tariff rates.  The modest amount of energy surplus to the contractual requirements may be sold in the wholesale market where market price fluctuations would have an effect on the Authority’s year-end financial results. 

 

 

6.                   Power Allocations Under the ReCharge New York Power Program

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

               

“The Trustees are requested to approve allocations of available power under the ReCharge New York (‘RNY’) power program to the businesses and not-for-profit corporations listed in Exhibit ‘6-A,’ and authorize, as deemed feasible and advisable, those businesses and not-for-profit corporations listed in Exhibit ‘6-D’ to receive a transitional electricity discount. These actions have been recommended by the Economic Development Power Allocation Board (‘EDPAB’) at its June 25, 2012 meeting.  The Trustees are also advised of the business listed in Exhibit ‘6-B’ that has been deemed ineligible by EDPAB.  Exhibit ‘6-C’ has been included to inform the Trustees of the applications by businesses and not-for-profit corporations that are not recommended for a RNY allocation award.

               

BACKGROUND

 

        “On April 14, 2011, Governor Andrew M. Cuomo signed into law the RNY power program as part of Chapter 60 (Part CC) of the Laws of 2011 (‘Chapter 60’).  RNY makes available 910 Megawatts (‘MW’) of economic development power, 50% of which will be provided by the Authority’s hydropower resources and 50% of which will be procured by the Authority on the open market.  RNY contracts can be for a term of up to seven years in exchange for job and capital investment commitments.  The statewide program is available to businesses and not-for-profit corporations for job retention, expansion and attraction purposes. 

 

                “The legislation stipulates that at least 350 MW of RNY power will be allocated to entities served by the New York State Electric and Gas, National Grid and Rochester Gas and Electric utility companies.  At least 200 MW will be set aside for the purpose of attracting new businesses and encouraging expansion of existing businesses statewide.  In addition, the legislation stipulates that up to 100 MW will be awarded to not-for-profit corporations (as defined in section 102 of the State’s Not-for-profit Corporation Law subdivision five of paragraph (a)) and small businesses statewide.

 

“Under the legislation, eligible applicant shall mean an eligible business, eligible small business, or eligible not-for-profit.  Further, an eligible applicant shall not include retail businesses as defined by EDPAB, including, without limitation, sports venues, gaming or entertainment-related establishments or places of overnight accommodations.  For purposes of the RNY power program, EDPAB adopted, at their meeting of April 24, 2012, the existing definition of a retail business as a business that is primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services, consistent with the rules previously promulgated by EDPAB for implementation of the Economic Development Power program.

 

“RNY allocation awards are comprised of 50% hydropower and 50% Authority-procured market power.  Prior to entering into a contract with an eligible applicant for the sale of RNY power, and prior to the provision of electric service relating to the RNY power allocation, the Authority shall offer each eligible applicant the option to decline to purchase the RNY market power component of such allocation.  If an eligible applicant declines to purchase the RNY market power component, the Authority shall have no responsibility for supplying such market power to the eligible applicant.

 

        “As envisioned by the legislation, the Authority worked cooperatively with the Department of Public Service (‘DPS’) to recommend to the NYS Public Service Commission (‘PSC’) reduced rates by utility corporations of RNY power program allocations.  Pursuant to Chapter 60 and by order of the PSC, NYS utilities are required to deliver RNY power using discounted delivery rates.  The discount derives from exempting RNY power from the Renewable Portfolio Surcharges, the Systems Benefits Charge and the Energy Efficiency Portfolio Standard Surcharge.  The delivery discount will apply to a customer’s total allocation even if the customer decides to purchase the RNY market power component of its allocation from a non-Authority source. 

          

“The application for the RNY power program was approved by EDPAB at their meeting of September 26, 2011.  Applications for RNY power were subject to a competitive evaluation process and were evaluated based on the twelve criteria set forth in the RNY legislation.   Pursuant to legislation, the criteria were considered in the aggregate and no one of which was presumptively determinative.

 

                “In an effort to receive high quality RNY applications and to announce the program, advertisements announcing the program were placed in major newspapers and business publications statewide; website postings were issued; mass emails were distributed and regional meetings were hosted by the Authority throughout the state.  In addition, the program was promoted with assistance from state and local entities, including the Regional Economic Development Councils (‘REDCs’), the Empire State Development Corporation and other local and regional economic development organizations within the state such as the Manufacturers Association of Central New York.  Further, a RNY Call Center was established to assist prospective applicants and to further disseminate information regarding the RNY program.  The RNY Call Center remains in operation.  Finally, a targeted postal mailing to business customers utilizing a list of ten thousand businesses in New York State was made to foster interest in the program.

 

“As part of Governor Andrew M. Cuomo’s ‘New York Open for Business’ initiative, requests for all statewide economic development programs, including RNY, have been incorporated into a single on-line Consolidated Funding Application (‘CFA’).  Beginning in September 2011, the CFA was available to applicants, marking a fundamental shift in how economic development resources are allocated.  The CFA continues to serve as an efficient and effective tool to streamline and expedite the state’s efforts to generate sustainable economic growth and employment opportunities across the state.  All applications that are considered for an RNY allocation were submitted through the CFA process.

 

To support the Governor’s transformative plans to improve New York’s business climate and stimulate economic growth, ten REDCs were created.  Through a performance-based, community-driven approach, each REDC has designed a strategic economic development model for their area and use the CFA as the primary support mechanism to work with eligible applicants to advance projects that demonstrate the greatest potential for job creation and economic opportunity.

“The Power for Jobs (‘PFJ’) and Energy Cost Savings Benefit (‘ECSB’) programs expire on June 30, 2012.  Current customers participating in these programs are required under legislation to apply for RNY in order to be considered for a RNY power allocation.  RNY is a new economic development power program unrelated to the earlier PFJ and ECSB programs.  All RNY applications are considered solely on their merits under the criteria established by the RNY legislation.

 

“Current PFJ and ECSB customers who submit applications and who do not receive a RNY allocation will be considered for the transitional electricity discount (‘TED’).  Pursuant to section 188-a of the economic development law, the Authority is authorized, as deemed feasible and advisable by the Trustees, to provide such TED as recommended by EDPAB.  The Authority shall identify and advise EDPAB whether sufficient funds are available for funding of such discounts through June 30, 2016.  The amount of the TED for the period of July 1, 2012 through June  30, 2014 shall be equivalent to  66% of the unit (per kilowatt-hour) value of the savings received by the applicant under the PFJ or ECSB during the 12 months ending on December 31, 2010.  The amount of the TED for the period July 1, 2014 through June 30, 2016 shall be equivalent to 33% of the unit (per kilowatt-hour) value of the savings received by the applicant  under the PFJ or ECSB during the 12 months ending on December 31, 2010.  As of January 27, 2012, of the applications received, 410 PFJ and ECSB customers have applied for an RNY allocation.

               

 “As of the January 27, 2012 deadline to submit an RNY application, 1,009 applications had been submitted via the CFA process, requesting over 2,100 MW, a figure more than twice the amount available for allocation under the legislation.  Staff evaluated the completed applications pursuant to the following twelve criteria as set forth in the RNY legislation:

 

‘(i) the significance of the cost of electricity to the applicant's overall cost of doing business, and the impact that a recharge New York power allocation will have on the applicant's operating costs;

 

(ii) the extent to which a recharge New York power allocation will result in new capital investment in the state by the applicant;

 

(iii) the extent to which a recharge New York power allocation is consistent with any regional economic development council strategies and priorities;

 

(iv) the type and cost of buildings, equipment and facilities to be constructed, enlarged or installed if the applicant were to receive an allocation;

 

(v) the applicant's payroll, salaries, benefits and number of jobs at the facility for which a recharge New York power allocation is requested;

 

(vi) the number of jobs that will be created or retained within the state in relation to the requested recharge New York power allocation, and the extent to which the applicant will agree to commit  to  creating or  retaining such jobs as a condition to receiving a recharge New York power allocation;

 

(vii) whether the applicant, due to the cost  of  electricity, is at risk  of  closing  or  curtailing facilities or operations in the state, relocating facilities or operations out of the state, or losing a significant  number of jobs in the state, in the absence of a recharge New York power allocation;

 

(viii) the significance of the applicant's facility that would receive the recharge New York power allocation to the economy of the area in which such facility is located;

 

(ix)  the extent to which the applicant has invested in energy efficiency measures, will agree to participate in or perform energy audits of its facilities, will agree to participate in energy efficiency programs of the authority, or will commit to implement or otherwise make tangible investments in energy efficiency measures as a condition to receiving a recharge New York power allocation;

 

(x) whether the applicant receives a hydroelectric power allocation or benefits supported by the sale of hydroelectric power under another program administered in whole or in part by the authority;

 

(xi)  the extent to which a recharge New York power allocation will result in an advantage for an applicant in relation to the applicant’s competitors within the state; and

 

(xii) in addition to the foregoing criteria, in the case of a not-for-profit corporation, whether the applicant provides critical services or substantial benefits to the local community in which the facility for which the allocation is requested is located.’

 

                “Based on the evaluation of these criteria, staff scored and ranked the applicants.  Staff’s recommendations also considered the scores of criteria numbers three and eight given by each REDC to each applicant in its region.  All recommended RNY allocations are based on a composite of staff’s and REDC’s scoring.  Allocations were recommended for those applicants who scored the highest under this evaluation process.

 

                “In arriving at the recommended amount of each RNY allocation, staff attempted to maximize the economic benefits of low cost Authority hydropower – the critical state asset at the core of the RNY program.  To do so, staff recommended allocation amounts for each applicant with the goals of expanding participation in the program while also assuring that each recipient receives a meaningful allocation.

 

“Accordingly, business applicants who scored high were recommended for allocations of RNY power of 50% of the requested amount or average historic demand, whichever was lower; business applicants were capped at 10 MW for any recommended allocation.  Not-for-profit applicants who scored high were recommended for allocations of RNY power of 33% of the requested amount or average historic demand, whichever was lower; these allocations were capped at 5 MW.  Authority customers currently receiving hydropower allocations under other Authority power programs were recommended for allocations of RNY power of 25% of the requested amount with the same caps as stated above.

 

“Based on this evaluation process, EDPAB recommended 517 allocations for Trustee approval and deemed three applicants ineligible at its April 24, 2012 EDPAB meeting.  The April recommendations, all of which were approved by the Trustees at their April 24, 2012 meeting, were to 320 businesses recommended for 510.1 MW; 122 small businesses recommended for 12.7 MW; and 75 not-for-profit corporations recommended for 73.1 MW.

 

DISCUSSION

 

“The Trustees are now being asked to approve additional RNY power allocations as recommended by EDPAB at its June 25, 2012 meeting, at which EDPAB addressed a majority of the remaining applications submitted prior to January 27, 2012.  Consistent with the evaluation process used for the April recommendations as described above, the resulting EDPAB recommendations are as follows: 161 applications are being recommended for an allocation of RNY power.  The 161 businesses or not-for-profit corporations, listed in Exhibit ‘6-A,’ have stated on their applications a willingness to create or retain nearly 25,000 jobs in New York State.  Additionally, these applicants will be committing to capital investments totaling $1 billion over five years in exchange for the allocations.  Of these recommendations, 103 businesses are recommended for 73.3 MW; 57 small businesses are recommended for 6.4 MW; and one not-for-profit corporation is recommended for 0.33 MW.

 

                “In addition to the 161 new recommendations, there are 49 applications previously recommended in April that required a modified recommendation based on evaluation data discrepancies discovered after the April meeting.  The discrepancies involve the commitment of jobs or capital investment, or the amount of power recommended.  EDPAB has recommended the Trustees approve these modified allocations as described in Exhibit ‘6-A.’  In total, RNY power allocations, including the April 24, 2012 awards and modifications to such awards as described herein, will have been made to 423 businesses recommended for 590.8 MW; 179 small businesses recommended for 21.0 MW; and 76 not-for-profit corporations recommended for 74.8 MW.

 

                “The RNY allocations in Exhibit ‘6-A’ are recommended for a period of up to seven years. Consistent with the legislation, each allocation recommended by EDPAB shall qualify an applicant to enter into a contract with the Authority pursuant to the terms and conditions of the recommendation by EDPAB and on such other terms as the Authority determines to be appropriate.  The contract will have provisions for effective periodic audits of the recipient of an allocation for the purpose of determining contract and program compliance and for the partial or complete withdrawal of an allocation if the recipient fails to maintain mutually agreed-upon commitments, relating to, among other things, employment levels, power utilization, capital investment and/or energy efficiency measures.  In addition, there shall be a requirement that a recipient of an allocation make its facilities available at reasonable times and intervals for energy audits and related assessments that the Authority desires to perform.  At their March 27, 2012 meeting, the Trustees approved the form and substance of a retail contract that incorporates these requirements.

 

  “At its meeting of June 25, 2012, EDPAB determined one applicant (listed in Exhibit ‘6-B’) was a retail business and was therefore ineligible for a RNY allocation.

               

                “After careful consideration and evaluation, 255 of the 1009 applications have not scored high enough in the competitive evaluation process to receive an allocation of RNY power.  As such, at its meeting of June 25, 2012, EDPAB determined that these applications, listed in Exhibit ‘6-C,’ are not recommended for an allocation of RNY power.

 

                “Those existing PFJ and ECSB benefit recipients who applied for RNY through the CFA process but were not awarded an allocation may be considered for the transitional electricity discount under the RNY authorizing legislation.  At its meeting of June 25, 2012, EDPAB recommended that the Trustees, as they deem feasible and advisable, provide transitional electricity discounts to 93 such applicants that are current PFJ and ECSB recipients as listed in Exhibit ‘6-D.’  As per statute, the Trustees will determine and advise EDPAB whether sufficient funds are available for funding of such discounts through June 30, 2016.

               

                “There are, additionally, a number of applicants that are not being recommended for RNY power.  Some applicants did not have demand meters to effectuate delivery of RNY power, others submitted incomplete applications and were unresponsive to follow-up outreach and some applicants were a public entity such as a municipality or public benefit corporation.  In some cases, the applicant formally withdrew its application.  These applications are provided for information purposes to the Trustees as detailed in Exhibit ‘6-E.’

 

                “Finally, EDPAB has advised that a remaining twelve applicants located in municipal or electric cooperative districts have yet to be evaluated due to unresolved issues regarding delivery of RNY within those districts.  There are also applicants requesting power for expansion projects that have yet to be evaluated.  All these applicants, along with additional applications received after January 27, 2012, will undergo review and will be brought to subsequent EDPAB meetings for potential recommendations to the Trustees.

 

Recommendation

 

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the allocations of power under the ReCharge New York Power Program to the companies listed in Exhibit ‘6-A’ and approve, as deemed feasible and advisable, those businesses and not-for-profit corporations listed in Exhibit ‘6-D’ receive a transitional electricity discount.

 

 “For the reasons stated, I recommend the approval of the above requested action by adoption of a resolution in the form of the attached draft resolution.”

 

Mr. Michael Huvane presented highlights of staff’s recommendation to the Trustees.  In response to a question from Trustee Foster, Mr. Huvane said the applications are evaluated based on 12 specific criteria and each criterion is scored independently; the recommended allocation is based on the aggregate score.  Successful applicants receive 50 % of their requested allocations; not-for- profit businesses receives 33%.  Trustee Nicandri added that the criteria are mandated by statute and President Quiniones stated that 20% of the total score is also based the Regional Economic Development Councils input in the process. 

Trustee Mahoney said she understands that the requirements for ReCharge New York, which are statutorily prescribed, are different from those for the previous programs and appreciate Mr. Pasquale providing her with the scoring methodology; this gives her a certain level of confidence to vote on recommendations for ReCharge power.

In response to further question from Trustee Foster and comment from Chairman Koelmel, Mr. Pasquale said, going forward, staff's would provide the scoring methodology to Trustees with the recommendation for ReCharge power allocations. Chairman Koelmel said he understands this is a major initiative for the Authority and thanked Mr. Pasquale and staff for their collaborative work effort.

Trustee Nicandri recused himself from the vote since he voted for its approval at the Economic Development Power Allocation Board meeting.  He added that, as a member of EDPAB, he wanted to acknowledge the hard work that Mr. Pasquale and his staff did in launching this program.

Trustee LeChase recused himself from the vote as it relates to the following companies:  General Electric Company, Flower City Printing, Inc., Optimax Systems, Inc., Cives Corporation dba Viking Cives USA, Alstom Transportation Inc., Alstom Transportation Inc., Corning Incorporated, Kraft Foods Inc., Klein Steel Service Inc.

                Trustee Flynn recused himself from the vote as it relates to the following companies: General Electric Company, Plug Power Inc., Saint-Gobain Performance Plastics, Suit-Kote Corporation, Welch Allyn, Inc., Jrlon, Inc., Newport Corporation, Sutherland Global Services, Inc., Tompkins Metal Finishing, Inc., XLI Corporation, Henry Schein, Inc., Honeywell International, Inc., Pall Corporation, AT&T, International Business Machines, ConMed Corporation, Quandt’s Foodservice Distributors, Inc., The Indium Corporation of America, Fordham University, NBCUniversal Media LLC, Pepsi Cola Bottling Co. of New York, Inc., Cives Corporation dba Viking Cives USA, Corning Incorporated, Philips Electronics North America Corporation, Allied Frozen Storage, Inc., API Heat Transfer, Inc., CWM Chemical Services, LLC, Greatbatch, Ltd., ITT Enidine, Inc., Klein Steel Service Inc., Moog Inc., and Special Metals Corporation

                Trustee Mahoney recused herself from the vote as it relates to the following companies: 499 Syracuse City Centre, Anoplate Corp., Byrne Dairy, Inc. - Ice Cream Center, G&L Davis Meat Co Inc., Higbee Inc., ICM Controls Corp., Jaquith Industries Inc., Linde Merchant Production, Inc., Midstate Spring, Inc., Schilling Forge, Tessy Plastics Corp., The Specialized Packaging Group, Inc., and Welch Allyn, Inc.
 

The following resolution, as submitted by the President and Chief Executive Officer, was adopted, with Trustee Nicandri abstaining and Trustees LeChase, Flynn and Mahoney being recused as it relates to the aforementioned companies.

 

                WHEREAS, the Economic Development Power Allocation Board has recommended that the Authority approve the ReCharge New York (‘RNY’) Power Allocations to the companies listed in Exhibit “6-A”; and

               

                                WHEREAS, the Economic Development Power Allocation Board has recommended that the Authority, as deemed feasible and advisable, approve the companies listed in Exhibit “6-D” for a transitional electricity discount;

               

                                NOW THEREFORE BE IT RESOLVED, That the Authority hereby authorizes the allocations of  RNY power to the  companies listed on Exhibit “6-A” in accordance with the terms described in the foregoing report of the President and Chief Executive Officer; and be it further

               

                                RESOLVED, That the Authority, as deemed feasible and advisable, approve the companies listed in Exhibit “6-D” for a transitional electricity discount, 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.

 


 

7.                   Power Contract with the Town of Massena Electric Department Transmittal to the Governor 

               

                The President and Chief Executive Officer submitted the following report:

SUMMARY

                “The Trustees are requested to approve the proposed power contract (‘Contract’) for the sale of up to 20 megawatts (‘MW’) of hydropower to the Town of Massena Electric Department (‘MED’), and in accordance with Public Authorities Law (‘PAL’) 1009, to authorize transmittal of the Contract to the Governor for his review with a recommendation of approval on the ground that the Contract is in the public interest.  Copies of the Contract and Service Tariff No. SC-1 which is incorporated into the Contract, are attached as Exhibit ‘7-A.’  

BACKGROUND

                “At their March 27, 2012 meeting, the Trustees, in accordance with PAL §1009, authorized a public hearing on the Contract which would provide for the sale of up to 20 megawatts (‘MW’) of hydropower (the ‘Allocation’) to MED.  The purpose of the power, denominated in the Contract as ‘St. Lawrence County Economic Development Power’ (‘SCEDP’), is to support economic development in the St. Lawrence County area.  Copies of the Contract were transmitted to the Governor and legislative leaders for their information and notice of a public hearing on the proposed contracts was published in six newspapers throughout the State in accordance with the PAL.

                “In summary, under the Contract:

·         MED and/or an agent would solicit applications for ‘sub-allocations’ of SCEDP.  Applications would be evaluated in consultation with other entities identified in the Contract and based on an economic development plan incorporated into the Contract.  Applications deemed acceptable would be forwarded to the Authority for consideration.  

·         If the Authority approves an application, MED would be authorized to enter into a ‘Sub-Allocation Contract’ with the applicant or ‘Qualified End User’ which would set forth the terms and conditions applicable to such person’s purchase of SCEDP from MED.  The form of the sub-allocation Contract would be subject to Authority approval.  The Authority would then make an ‘Allocation’ of SCEPD to MED to support the corresponding sub-allocation of SCEDP.  Allocations of SCEDP from the Authority to MED may be used only to make a corresponding Sub-Allocation to the Qualified End User.   

·         Sub-allocations by MED to Eligible End Users may not exceed seven (7) years without good cause shown by MED.   

·         MED would be responsible (i) to serve as the New York Independent System Load Serving Entity for the SCEDP, and (ii) for the transmission and delivery of SCEDP from the Project’s switchyard to points of delivery to the Qualified End Users.  MED would also be responsible for all costs associated with these matters, subject to recoupment of costs from Qualified End Users.

                The Contract contains numerous other provisions generally found in other Authority power contracts, relating to such matters as hydropower curtailments, prohibitions on the transfer of power and modifications and terminations of allocations due to jurisdictional rulings and orders.

                “The Contract would have an effective termination date of September 1, 2025. 

DISCUSSION

                “A public hearing was held on May 10, 2012 at the Frank S. McCullough, Jr. Hawkins Point Visitors Center at the St. Lawrence/FDR Power Project in Massena.  Three oral statements were offered at the public hearing in support of the Contract.  Fifteen written statements were submitted in support of the Contract.  The official transcript of the public hearing and the written submittal are attached as Exhibit ‘7-B.’                 

                “The Contract would provide a significant resource to support economic development in the St. Lawrence County area, and give local officials a significant role in the process which could lead to economic development projects tailored to meet local needs.  The formal and responsible application, allocation and sub-allocation process provided for in the Contract is intended to maximize participation, transparency and accountability.  In addition, NYPA would retain the use of the underlying hydropower that has not been allocated.

 

RECOMMENDATION

                “The Senior Vice President – Economic Development and Energy Efficiency and the Director – Marketing Analysis and Administration recommends that the Trustees approve the Contract for the sale of up to 20 MW of hydropower to MED, and authorize transmittal of the Contract to the Governor for his review with a recommendation that the Contract be approved as in the public interest.

 

“For the reasons stated, I recommend the approval of the above requested action by adoption of a resolution in the form of the attached draft resolution.”

 

Mr. Mike Lupo presented highlights of staff’s recommendation to the Trustees.  Trustee Nicandri stated that the recommendation is as a result of the outcome of negotiations for the relicensing of the St. Lawrence/FDR Project whereby “host communities” are being compensated for loss of tax revenues for real property to the Authority.  The purpose of the compensation is for economic development in those areas.

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

 

                RESOLVED, That the proposed power contract between the Authority and the Town of Massena Electric Department (“MED”) and the associated Service Tariff no. SC-1 (collectively, the  “Contract”) for the sale of up to 20 megawatts of hydropower to MED are in the public interest and should be submitted to the Governor for approval, and that the Contract, along with the record of the public hearing and written comments submitted thereon, be forwarded to 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 pursuant to the Public Authorities Law §1009; and be it further

 

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

RESOLVED, That the Senior Vice President – Economic Development and Energy Efficiency, or his designee, be, and hereby is, authorized, subject to the approval of the form thereof by the Executive Vice President and General Counsel, to negotiate and execute any and all documents necessary or desirable to implement the Contract with the company 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.

 

8.                   Transitional Electricity Discount Payments for Certain Power for Jobs and Energy Cost Savings Benefit Customers

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize an initial amount of money, not to exceed $9 million, that would be available to fund Transitional Electricity Discount (‘TED’) payments to certain Power of Jobs (‘PFJ’) and Energy Cost Savings Benefit (‘ECSB’) customers in accordance with the statutory authority provided to the Authority by Chapter 60 of the Laws of 2011, Part CC, §6 (‘Chapter 60’).  The funds would be used to fund TED payments to PFJ and ECSB customers who: (1) applied for a Recharge New York (‘RNY’) Power allocation; and (2) the Economic Development Power Allocation Board (‘EDPAB’) determined at its April 24, 2012 meeting or June 25, 2012 meeting would not receive a recommendation for an allocation of RNY Power (‘Qualified Transitional Customers’).  In accordance with Chapter 60, EDPAB, at its June 25, 2012 meeting, recommended that all businesses determined to be Qualified Transitional Customers should receive a TED.  A listing of businesses that have been determined by EDPAB, to date, to be Qualified Transitional Customers is attached as Exhibit ‘8-A.’

 

BACKGROUND

 

“Chapter 60 created the RNY Power program and provided for the expiration of the PFJ and ECSB programs.  In addition, Chapter 60 provides that:

 

Notwithstanding any provision of title 1 of article 5 of the public authorities law or article 6 of the economic development law to the contrary, with respect to applicants who are in substantial compliance with all contractual commitments and receiving benefits under the power for jobs, energy cost savings benefit, economic development, high load factor or municipal distribution agency programs, but do not receive a recommendation from the New York state economic development power allocation board for a recharge New York power allocation pursuant to section 188-a of the economic development law, such board shall recommend that the power authority of the state of New York provide for a transitional electricity discount to such applicants. The power authority of the state of New York is authorized, as deemed feasible and advisable by the trustees, to provide such transitional electricity discounts as recommended by the New York state economic development power allocation board. The power authority of the state of New York shall identify and advise such board whether sufficient funds are available for the funding of such transitional electricity discounts through June 30, 2016. The amount of the transitional electricity discount for the period July 1, 2012 through June 30, 2014 shall be equivalent to 66 percent of the unit (per kilowatt-hour) value of the savings received by the applicant under the power for jobs or energy cost savings benefit programs during the 12 months ending on December 31, 2010. The amount of the transitional electricity discount for the period July 1, 2014 through June 30, 2016 shall be equivalent to 33 percent of the unit (per kilowatt-hour) value of the savings received by the applicant under the power for jobs or energy cost savings benefit programs during the 12 months ending on December 31, 2010.

 

DISCUSSION

                 

“The Trustees are requested to authorize an initial amount of money for the period from July 1, 2012 through June 30, 2013 (‘Year One’), not to exceed $9  million (the ‘Authorized Amount’), that would be available to fund TED payments to Qualified Transitional Customers for Year One.  

 

“In accordance with Chapter 60, EDPAB, at its June 25, 2012 meeting, determined that the businesses listed on Exhibit ‘8-A’ are Qualified Transitional Customers and recommended that these businesses receive a TED.

 

“Staff intends to make TED payments to Qualified Transitional Customers on a semiannual basis.  TED payments will be subject to a certification on the date of such payment by the Authority’s Treasurer or Deputy 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 Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented. 

 

“Staff has reviewed the effects of the TED payments of up to $9 million on the Authority’s projected financial position and reserve requirements.  In addition, in accordance with the Trustees’ Policy Statement dated May 24, 2011, staff calculated the impact of these payments on the Authority’s debt service coverage ratio and determined that it would not fall below the 2.0 reference point level.  Given the current financial condition of the Authority, its estimated future revenues, operating expenses, debt service and reserve requirements, staff is of the view that it will be feasible for the Authority to make the payments of up to $9 million at this time.

 

“While the Trustees will not be asked to approve individual payment amounts on a semiannual basis, such information will be made available to the Trustees when requested.  Staff intends to return to the Trustees, as may be necessary, to address such matters as necessary modifications to the Authorized Amount and additional recommendations made by EDPAB for Qualified Transitional Customers not yet considered for TED payments.

 

FISCAL INFORMATION

 

At this time, staff estimates that the total amount needed for Year One for TED payments to (i) Qualified Transitional Customers listed on Exhibit ‘8-A’ and (ii) potential additional Qualified Transitional Customers who will be identified pending later evaluation, is not expected to exceed the Authorized Amount ($9 million).  Payments would be made from the Operating Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Economic Development and Energy Efficiency and the Director – Market Analysis and Administration recommend that the Trustees approve the Authorized Amount for Transitional Electricity Discount payments to businesses that are determined to be Qualified Transitional Customers.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

                Mr. Mike Lupo presented highlights of staff’s recommendation to the Trustees. 

 

                In response to a question from Trustee LeChase, Mr. Russak said the cost of the transitional electricity discount payments are now reflected in the updated financial forecasts presuming authorization by the Trustees.

Trustee LeChase recused himself from the vote as it relates to Watson Bowman Acme Corp.; Trustee Flynn recused himself from the vote as it relates to Precision Systems Manufacturing Inc., American Cancer Society, Eastern Division, Inc., Kingsbrook Jewish Medical Center, Lewis County General Hospital, Cameron Manufacturing & Design, Inc., Cherry Creek Woodcraft, Inc., Consumers Beverages, Inc., Sentry Metal Blast, Inc., and Watson Bowman Acme Corp.; and Trustee Mahoney recused herself from the vote as it relates to Coyne International Enterprises Corp-DE, Meloon Foundries, Inc., Precision Systems Manufacturing Inc. and Syracuse Heat Treating Corporation.

The following resolution, as submitted by the President and Chief Executive Officer, was adopted, with Trustees LeChase, Flynn and Mahoney being recused as it relates to the aforementioned companies.

 

WHEREAS, the Economic Development Power Allocation Board (“EDPAB”) has recommended that the Authority approve the Transitional Electricity Discount (“TED”) payments to the businesses listed in Exhibit “8-A” (‘Qualified Transitional Customers’);

 

RESOLVED, That the Trustees hereby authorize the use of up to $9 million (the “Authorized Amount”) to fund TED payments to Qualified Transitional Customers, including those listed in Exhibit

“8-A,” as discussed in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That it is hereby found that the foregoing amount may properly be withdrawn from the Operating Fund to fund such TED 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 Treasurer or the Deputy Treasurer that the amount to be withdrawn is not then needed for any of the purposes specified in Section 503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That the  Senior Vice President – Economic Development and Energy Efficiency or his designee be, and hereby is, authorized to prepare 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. 


 

 

9.                   Informational item:  Agreements Providing for Delivery of Recharge New York Power

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

                “This report is to advise the Trustees on the development of proposed agreements between the Power Authority of the State of New York (‘NYPA’ or ‘Authority’) and the State’s seven electric utility companies that would provide for the delivery of Recharge New York (‘RNY’) Power to RNY customers (‘Program Participants’) and related responsibilities that will be undertaken by NYPA and the respective utilities (‘Delivery Agreements’).   In addition, this memorandum describes the NYPA-wide ‘back-office’ changes being made to implement the RNY Program, Delivery Agreements, and customer agreement and Service Tariff No. RNY-1 approved by the Trustees at their March 27, 2012 meeting that are necessary to provide for the sale and delivery of RNY Power to Program Participants.

BACKGROUND

                “Chapter 60 (Part CC) of the Laws of 2011 (‘Chapter 60’) created the Recharge New York (‘RNY’) Power Program.  The RNY Power Program makes 910 megawatts (‘MW’) of ‘Recharge New York Power’ (‘RNY Power’) available to ‘eligible applicants’ for the purpose of attracting new businesses and retaining and expanding existing businesses throughout the State of New York.

                “RNY Power is comprised of: (1) fifty percent (50%) of firm hydroelectric power from the Authority’s Niagara and St. Lawrence/FDR hydroelectric projects (‘RNY Hydropower’) that was withdrawn, effective August 1, 2011, from the utility corporations that had purchased such power for the benefit of domestic and rural consumers; and (2) fifty percent (50%) of market power procured by the Authority from market or other appropriate sources (‘RNY Market Power’). 

                “Pursuant to Chapter 60, the Authority is authorized, beginning July 1, 2012, to ‘make available, contract with and sell’ to eligible applicants such RNY Power allocations as are recommended by the Economic Development Power Allocation Board (‘EDPAB’). 

                “The terms and conditions governing the allocation and sale of RNY Power by the Authority to individual Program Participants pursuant to the RNY Statutes will be set forth in a written agreement between the Authority and each Program Participant (‘RNY Contract’), the form of which was approved by the Trustees at their March 27, 2012 meeting.

                “RNY Power will be delivered to Program Participants by the State’s local utility companies. 

DISCUSSION

                “NYPA and the utilities will each have certain responsibilities to facilitate the delivery of RNY Power.  As discussed in more detail below, the Delivery Agreements between NYPA and each of the utilities would set forth procedures regarding the delivery of RNY Power sold by the Authority and address the allocation of other tasks and responsibilities relating to implementation of the RNY Power Program.  Each of these matters is expected to be addressed in the Delivery Agreements.

                The basic form of the Delivery Agreement is different from delivery agreements used in other Authority power programs to account for the following RNY Power Program-specific features as well as other appropriate considerations: (1) RNY Power will be sold through a direct sale arrangement between the Authority and the Program Participant, in contrast to a sale-for-resale arrangement that has been used in some other Authority power programs whereby the Authority sells power to local utilities which in turn resells it to the program participant; (2) the utilities will bill RNY Power recipients directly for all charges related to delivery and other non-NYPA power the utility supplies; (3) the utilities will apportion the load of each Program Participant to respective Accepted Allocation according to methodologies that will be provided for in the Delivery Agreement; and (4) staff expects data transmission between the Authority and utilities to occur via a standardized electronic format in accordance with an established technology protocol.  In addition, staff expects the form of the Delivery Agreements to provide for the following:

·         The Authority will directly bill Program Participants for commodity costs and related charges, including applicable ISO charges, as provided for in the Authority’s tariff and the RNY Contract.

·         The Authority will supply Program Participant data to the relevant utility to facilitate the utility’s delivery of RNY power to Program Participants.

·         Utilities will supply to the Authority appropriate information about Program Participant demand and energy usage to enable the Authority to render invoices to Program Participants for NYPA Charges.

·         The Authority will serve as the ISO Load Serving Entity (‘LSE’) for all RNY Power it sells to Program Participants.

·         The Utility (or an ESCO) will procure and sell to Program Participants other Power need by Program Participants including RNY Market Power if the Program Participant chooses to purchase such power from such entity.

                “The Delivery Agreement includes other terms which are largely standard terms and conditions for such agreements, including provisions for the termination of delivery service, changes in legal requirements, and confidentiality of business information.

                “`Staff expects to finalize the Delivery Agreements before the end of June.

                “The following are the most notable technical changes affecting the Authority’s back-office operations have been implemented to commence the RNY Power Program:

·         Automated NYPA/utility data transfer interfaces were built to accommodate uniform data transfers to and from all utilities.

·         An automated internal Customer Relationship Management (CRM)/SAP billing system data exchange structure was created to assure accurate information transfer within different departments at NYPA.

·         NYPA’s wholesale billing system was adjusted to allow of processing of the RNY direct bill and zonal rate structure unique to RNY.

·         An SAP data reporting cube was developed for processing, storing and reporting of RNY costs and credits.

·         An Energy Charge Adjustment (ECA) mechanism was established to insure that actual costs are recovered from RNY Program customers through the new rate structure rates.

·         Energy Resource Managements Data Warehouse was coded to apportion NYISO costs to billable customer zonal rate structure.

·         An RNY customer savings model is being developed with expected deployment by year end 2012.”

 

Mr. Mike Lupo presented highlights of the report to the Trustees.  In response to a question from Trustee Nicandri, Mr. Lupo said approval for the delivery rate charges is not required by the New York Power Authority Board of Trustees.


 

10.                Energy Efficiency Market Acceleration Program Authorization

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to authorize up to $30 million in funding over a five-year period to implement the Energy Efficiency Market Acceleration Program (‘EE-MAP’).  EE-MAP would be comprised of research, market development activities and demonstration projects targeting the deployment of commercial, but not as yet, widely deployed energy efficiency products and systems.  The program would be developed in support of New York’s clean energy goals and to increase economic development activity in the New York State energy efficiency industry.  To that end, the Authority would engage the services of research institutions, energy service contractors and technical consultants to provide research and training and to implement innovative programs.  In addition, demonstration projects implemented at facilities of eligible participants of the Authority’s Energy Services Programs (‘ESPs’) would be funded through the EE-MAP.

BACKGROUND

The Authority’s mission is to ‘provide clean, low-cost, and reliable energy consistent with our commitment to the environment and safety, while promoting economic development, job development, energy efficiency, renewables and innovation, for the benefit of our customers and all New Yorkers.’  Since the late 1980s, the Authority has provided energy services programs throughout New York State (‘NYS’).  In aggregate, the Authority’s energy services programs have achieved over $140 million in annual customer savings at about 3,800 public facilities, including schools, hospitals and municipal buildings, for a reduction of annual greenhouse gas emissions of more than 830,000 tons.

New York’s commitment to achieve high levels of energy efficiency is highlighted by the ‘45 by 15’ clean energy goal, which challenges the State to meet 45 percent of its electricity needs by 2015 through increased energy efficiency and renewable energy.  The ‘45 by 15’ clean energy goal proposes to reduce electricity end-use by 15 percent below 2015 forecasted levels, while simultaneously meeting 30 percent of the State’s electricity supply needs through renewable resources.  Achieving this aggressive goal will require the cooperation of many entities, including state agencies and authorities, energy utilities and municipalities. 

With the support of the Governor and the State Legislature, the Authority has become the ‘go to’ enterprise for energy efficiency and clean energy programs that help public entities and other eligible participants save energy and money at their facilities.  For over two decades, the Authority has partnered with these facilities to identify potential efficiency and clean energy projects, and to help finance, design and install energy saving equipment at these sites.  Looking ahead, the Authority is committed to supporting New York’s clean energy goals and to expand and enhance the Authority’s energy efficiency program offerings as well as to develop new technologies to save energy and meet the needs of the State of New York. 

DISCUSSION

EE-MAP is designed to grow the energy efficiency industry in New York, help bring innovative energy saving technologies to market and advance New York’s technology leadership in this important industry.  EE-MAP will also increase the efficiency and effectiveness of existing energy service programs in New York through improved implementation processes and delivery methods.

If authorized by the Trustees, EE-MAP would consist of a non-recoverable energy efficiency fund of up to $30 million to be available for expenditure over a five-year period commencing June 2012. 

 

 

The EE-MAP would consist of the following areas of activity:

 

1.       Engage research institutions, not for profit entities, technology development companies and technical consultants, through competitive solicitations, either independently or in collaboration with entities such as the New York State Energy Research and Development Authority (‘NYSERDA’) and the Electric Power Research Institute (‘EPRI’), to accelerate the deployment of commercial, but not as yet widely deployed, energy efficiency products and systems.  The focus will be on under deployed energy efficiency products and services that are already commercial.  EE-MAP will not target early stage or proof of concept technologies as these are generally the target of traditional NYSERDA programs. 

2.       Develop and implement advanced energy auditing and energy efficiency master planning projects.

3.       Identify and implement energy efficiency demonstration projects located at ESP participant sites to validate advanced and emerging energy efficiency technologies and equipment performance.  Demonstration sites may also serve as testing laboratories and centers for training and education. 

4.       Develop new energy efficiency markets in coordination with state agencies and authorities and distribution utilities.  These efforts will assist in forming strategic alliances and economic development opportunities for energy efficiency technology companies.  Activities will include collaborating with research institutions, coordinating meetings between the technology companies, ESP eligible participants and other state agencies, and others to improve industry access to efficiency investments made at public facilities.  

5.       Attract technology companies with commercial, but not yet widely deployed energy efficiency products and systems to New York from other states. 

6.       Create or facilitate market channels for emerging technology companies with commercial energy efficiency products and services.  The Authority is ideally positioned to accelerate the deployment of these products and services because of its very large annual energy efficiency business with public entities. 

7.       Work closely and provide training to consulting engineers, architects, contractors and maintenance service providers to design, specify, install and maintain these commercial but not yet widely deployed energy efficiency products and services. 

 

A steering committee will be formed within the Authority to review all competitive solicitations to be issued under EE-MAP, as well as all resulting contract and grant award recommendations. In addition, New York State economic development will be included as a criterion in the evaluation of the program competitive bids as allowed by the Authority’s procurement guidelines.

 

Staff will also coordinate with NYSERDA to issue joint research opportunities, share expertise and results.  Collaboration and additional co-funding would be sought from the US Department of Energy and EPRI to secure additional research dollars for New York.

 

FISCAL INFORMATION

The $30 million Energy Efficiency Market Acceleration Program will be funded from the Authority’s Operating Fund.  

RECOMMENDATION

The Senior Vice President –Economic Development and Energy Efficiency and the Vice President – Energy Efficiency recommend that the Trustees formally approve the Energy Efficiency Market Acceleration Program as described above.

 

For the reasons stated, I recommend the approval of the above-requested actions by adoption of a resolution in the form of the attached draft resolution.”

 

                President Quiniones said the Authority will engage in energy efficiency projects in buildings of the state and local municipalities, colleges and universities and schools for a total cost of up to $800 million.  Also, NYSERDA and the utilities have committed to providing grants of up to $7 million per year, over 5 years, toward energy efficiency projects in the state.  He said the program, which will target emerging commercial technologies, will help to create jobs in the state.

                In response to a question from Chairman Koelmel, Mr. Sliker said the target zone include companies that will provide local services for commercial projects of which service agreements and warranties are in place.

                In response to a question from Trustee Foster, President Quiniones said at the Strategic Planning Retreat in March, the Authority considered other projects that would add value to it; also, the Authority is opening a door for more emerging commercial technology in the New York industry.  He said emerging technologies is an opportunity for the Authority to help businesses invest in New York State.
 

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

 

RESOLVED, That the Trustees hereby authorize up to $30 million in total available funds to be used for energy efficiency research, market development activities and demonstration projects, with such funds being utilized over a five-year period for the Energy Efficiency Market Acceleration Program as described in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That Operating Fund monies will be used to fund such studies, training programs and grants in the amount and for the purposes listed below:

 

                                                                                        Expenditure

Operating                                     Authorization              Authorization              

    Funds                                         (not to exceed)                   Expires                    

Research, Studies,                                                                             

Demonstration Programs        $30 million                      6/27/2017

and Project Funding                                         

 

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.

 

 

 

11.                Release of Funds in Support of the Western New York Power Proceeds Allocation Act

              

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the release of funds into the Western New York Economic Development Fund (‘WNYEDF’) representing net earnings from unallocated Expansion Power and Replacement Power sold into the wholesale energy market during the period August 30, 2010 through December 31, 2012 as set forth in Chapter 58 of the Laws of 2012.     

 

BACKGROUND

 

“On March 30, 2012, Governor Cuomo signed into law the Western New York Power Proceeds Allocation Act (the ‘Act’) which directs net earnings from the sale of unallocated Expansion Power and Replacement Power from the Authority’s Niagara power project to be deposited into the WNYEDF.  The Act repeals Chapter 436 of the Laws of 2010, which had amended the Public Authorities Law and the Economic Development Law, to create a somewhat similar program authorizing unallocated Expansion Power and Replacement Power to be utilized for WNYEDF benefits.

 

“As part of the Act, the Authority is directed to deposit the net earnings from unallocated Expansion Power and Replacement Power into the WNYEDF as deemed feasible and advisable by the Trustees.  The effective date for calculating the net earnings is August 30, 2010, the original effective date of Chapter 436 of the Laws of 2010.  Net earnings are defined as ‘the aggregate excess of revenues received by the power authority of the state of New York from the sale of expansion and replacement power and energy produced at the Niagara project that was sold in the wholesale energy market over what revenues would have been received had such energy been sold on a firm basis to an eligible expansion power or replacement power customer under the applicable tariff or contract.’ 

 

“The net earnings deposited into the WNYEDF will be utilized to fund economic development projects (‘eligible projects’) by private businesses, including not-for-profits, which are physically located within New York State and within a thirty-mile radius of the Niagara power project.  Eligible projects are to support the growth of business in the state and thereby lead to increased tax revenues and job creation or retention.  Eligible projects may include capital investment in buildings, equipment and associated infrastructure; research and development that benefits New York State; support for tourism and marketing and advertising for Western New York State tourism and business; and energy related projects as authorized under §1005(17) of Public Authorities Law.

 

“The Act also establishes the Western New York Power Proceeds Allocation Board (‘Allocation Board’) to consist of five members appointed by the Governor.  The Allocation Board’s responsibilities include establishing written procedures for reviewing applications and making recommendations to the Authority for the allocation of fund benefits to eligible projects.  In reviewing applications for benefits, the Allocation Board shall employ the same criteria used for determining eligibility for Expansion, Replacement and Preservation Power allocations as provided in §1005 of Public Authorities Law including, but not limited to, the number of jobs and type of jobs created as measured by wage and benefit levels; business’ long-term commitment to the region; amount of capital investment; and impact on competitiveness in the region.  Upon recommendation of the Allocation Board, the Authority shall award fund benefits to an applicant, provided however, that upon a showing of good cause, the Authority shall have the discretion as to whether to adopt the Allocation Board’s recommendation, or to award benefits in a different amount or on different terms and conditions.

 

DISCUSSION

 

“The Authority is requested, from time to time, to provide financial support for various State programs, including rebates to customers of the Power for Jobs program, the provision of below-cost energy to the beneficiaries of the State’s Energy Cost Savings Benefits program, and the Residential Consumer Discount Program payments related to ReCharge New York.

 

“Any such transfer of funds must (1) be authorized by the Legislature; (2) be approved by the Trustees ‘as feasible and advisable,’ (3) satisfy the requirements of the Authority’s General Resolution Authorizing Revenue Obligations dated February 24, 1998, as amended and supplemented (‘Bond Resolution’) and (4) as set forth in the Trustees’ Policy Statement dated May 24, 2011, a debt service coverage ratio of 2.0 shall be used as a reference point in considering any such payments or transfers.

 

“The Bond Resolution’s requirements to withdraw monies ‘free and clear of the lien and pledge created by the [Bond] Resolution’ are such that withdrawals (a) must be for a ‘lawful corporate purpose as determined by the Authority,’ and (b) the Authority must determine, taking into account, among other considerations, anticipated future receipt of revenues or other moneys constituting part of the Trust Estate, that the funds to be so withdrawn are not needed for (i) payment of reasonable and necessary operating expenses, (ii) an Operating Fund reserve for

working capital, emergency repairs or replacements, major renewals or for retirement from service, decommissioning or disposal of facilities, (iii) payment of, or accumulation of a reserve for payment of, interest and principal on senior debt or (iv) payment of interest and principal on subordinate debt.

 

“Based on the amount of unallocated Expansion Power and Replacement Power, and Western New York wholesale energy prices during the period August 30, 2010 through May 31, 2012, staff has determined the amount of net earnings, calculated in accordance with the legislation, to be $15.4 million.  If deemed feasible and advisable by the Trustees, the $15.4 million will be deposited into the WNYEDF no later than ninety days after enactment of the Act.  The WNYEDF will be a separate fund residing within the Authority’s Operating Fund.

 

“In addition, staff is seeking authorization to deposit into the WNYEDF the net earnings for the period June 1, 2012 through December 31, 2012, estimated to be less than $4.6 million based upon projected unallocated Expansion Power and Replacement Power and projected wholesale energy prices.  If authorized by the Trustees, such net earnings would be deposited into the WNYEDF on a quarterly basis. 

 

“Staff has reviewed the effects of the transfer of up to $20 million into the WNYEDF on the Authority’s projected financial position and reserve requirements. In addition, in accordance with the Board’s Policy Statement, staff calculated the impact of this transfer on the Authority’s debt service coverage ratio and determined it would not fall below the 2.0 reference point level. Given the current financial condition of the Authority, its estimated future revenues, operating expenses, debt service and reserve requirements, staff is of the view that it will be feasible for the Authority to make the deposit of up to $20 million at this time.

 

FISCAL INFORMATION

 

“Since the passage of the initial legislation related to the WNYEDF (Chapter 436 of the Laws of 2010), the Authority has been accruing for this potential liability on a monthly basis.  Provisions for this program were also included in the 2012 Operating Forecast approved by the Trustees in December 2011.

 

“Staff has determined that sufficient funds are available to provide up to $20 million in support for WNYEDF benefits for the period August 31, 2010 through December 31, 2012 and that such Authority funds are not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s Bond Resolution.  Net earnings to be deposited into the WNYEDF for periods beyond December 31, 2012 will be requested of the Trustees at a later date. 

 

RECOMMENDATION

 

“The Treasurer recommends that the Trustees affirm the deposit of up to $20 million into the Western New York Economic Development Fund is feasible and advisable and to authorize such deposit.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

                Mr. Brian McElroy presented highlights of staff’s recommendation to the Trustees.  In response to a question from Chairman Koelmel, Mr. McElroy said the Western New York Power Proceeds Allocation Board has not yet been established and Ms. Judith McCarthy added that the statute requires the funding to be available within 90 days after the Board has been established.  Staff’s recommendation is to ensure that the Authority will be ready to assist the Board as soon as it has been established.

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

 

RESOLVED, That the Trustees hereby authorize the release of up to $20 million from the Operating Fund to the Western New York Economic Development Fund as authorized by Chapter 58 of the Laws of 2012 and as discussed in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the amount of up to $20 million to be used for the Western New York Economic Development Fund benefits described in the foregoing resolution is not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That as a condition to making the releases specified in the foregoing resolutions, on the day of such payment the Treasurer or the Deputy Treasurer shall certify that such monies are not then needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Corporate Secretary, the Treasurer and all other officers of the Authority be, and each of them hereby is, authorized and directed, for and in the name and 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 that they, or any of them, may deem necessary or advisable to effectuate the foregoing resolutions, subject to approval as to the form thereof by the Executive Vice President and General Counsel.

 

 

12.                Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program – Motor-Generator Upgrade, Accessory Replacement and Overhaul – Contract Award

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a nine-year contract in the amount of $90,989,359 to Andritz Hydro Inc. of Charlotte, NC (‘Andritz’), for the motor-generator upgrade, accessory replacement and overhaul work as part of the Life Extension and Modernization (‘LEM’) Program at the Lewiston Pump Generating Plant (‘LPGP’). 

 

“Interim approval was given, with a limited authorization not to exceed $104,000, in order for Andritz to commence the engineering evaluation which is necessary to have the stator coils, field poles and related components delivered to the site by January 2013.  The delivery of the components is vital to meet the installation schedule for the first unit’s planned outage starting in December 2012.

 

BACKGROUND

 

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

 

                “At their June 29, 2010 meeting, the Trustees approved the LPGP LEM Program at the estimated cost of $460 million and authorized capital expenditures in the amount of $131 million.  This requested contract award is a part of the previous capital expenditure authorization. 

 

LPGP is a low-head pump storage plant with 12 reversible motor-generators.  A hydroelectric generator converts mechanical energy into electricity; a motor coverts electrical energy into mechanical energy and pumps the water into the reservoir. The principal reason for life extension work at LPGP is the condition and age of generating equipment, including the original transformers, motor-generators, pump-turbines, exciters and controls, potheads and High Pressure Fluid-Filled (‘HPFF’) plants.  Failure to maintain LPGP would result in significant loss of peaking and firm capacity from the Niagara Power Project, preventing the Project from being able to meet power contracts with the Authority’s customers.

 

“The work under this contract includes complete engineering evaluation of the existing motor-generators and design of new field poles, stator windings and other systems and rehabilitation work to enhance unit capacity and improve water-to-wire efficiency.  The existing LPGP motor-generators were re-wound in the 1980s; one unit was re-wound again in each of 2005 and 2009.  The 2005 re-wind was based on a planned program of re-winds, which has been superseded by the present LEM Program.

 

DISCUSSION

 

“An advertisement to procure bids was issued and appeared in the New York State Contract Reporter on January 10, 2012.  Five proposals were received on April 3, 2012.  In addition, Post-Bid Addenda Nos. 1 and 2 were issued to clarify the bidders’ proposals; final prices were received on May 7, 2012.  The final proposal prices are as follows:


 

Bidder

Location

   Base Bid

   Base Bid
with Escalation

 

 

 

 

Andritz Hydro Inc.

Charlotte, NC

  $80,449,691

  $90,989,359

Alstom Hydro Power Inc.

Littleton, CO

  $84,317,913

  $92,877,328

Voith Hydro Inc.

York, PA

  $85,704,623

  $97,574,321

National Electric Coil

Columbus, OH

  $87,856,684

  $99,077,439

General Electric International Inc.

Rotterdam, NY

 Not provided

$122,489,538

               

                “All proposals were reviewed by an evaluation committee with representatives from Procurement, Engineering, Niagara Project and Project Management.  Meetings were conducted with three bidders to clarify their proposals and provide an opportunity to explain how they arrived at their work plan, guaranteed characteristics and pricing. 

 

“Alstom took numerous commercial exceptions such as insurance, liquidated damages and limitation of liability which are not acceptable to the Authority.  In addition, Alstom’s original proposal price increased by $14,000,000 based on Post-Bid Addendum No. 2 for an ‘exception free proposal’ of which $5.0 million is the estimated cost for insurance.  Furthermore, $16,800,000 of their bid is subject to currency adjustment.

 

“Andritz did not increase its price in order to provide an exception free proposal and was evaluated to be the lowest-priced, technically qualified bidder. 

 

“The estimated cost of this work is within the authorization of this project which was approved by the Trustees at their June 29, 2010 meeting; this work is included in the 2012 approved Capital Budget.  Future funding will be included in the Capital Budget request for those years.

 

FISCAL INFORMATION

 

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

 

RECOMMENDATION

 

“The Senior Vice President and Chief Engineer – Power Supply Support Services Operations, the Vice President – Project Management, the Vice President – Engineering, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees approve the award of a nine-year contract to Andritz Hydro Inc. of Charlotte, NC, in the amount of $90,989,359, for motor-generator upgrade, accessory replacement and overhaul as part of the Life Extension and Modernization Program to renovate and modernize the Lewiston Pump Generating Plant.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

                Mr. Michael Mitchell presented highlights of staff’s recommendation to the Trustees.  In response to a question from Chairman Koelmel, President Quiniones said most of the sourcing for major overhaul projects is done internationally.  However, Authority staff is responsible for the quality control of these projects to ensure that the work is being done correctly.  In response to a question from Trustee LeChase, Mr. Mitchell said the Authority has the right to cancel the contract and bid for other competitive prices if the contractor is not performing acceptably.

                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, approval is hereby granted to award a nine-year contract to Andritz Hydro Inc. of Charlotte, NC, in the amount of $90,989,359, for the motor-generator upgrade, accessory replacement and overhaul as part of the Life Extension and Modernization Program to renovate and modernize the Lewiston Pump Generating Plant, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                                                Contractor                        Contract Approval

                                                Andritz Hydro Inc.                      $90,989,359                                

                                                Charlotte, NC

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. 

 

13.                Motion to Conduct an Executive Session

 

                Mr. Chairman, I move that the Authority conduct an executive session pursuant to the Public Officers Law of the State of New York section 105 to discuss matters leading to the award of contracts to particular corporations.  On motion made and seconded, an Executive Session was held. 


14.                Motion to Resume Meeting in Open Session

 

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

                                                                                                                                               

15.                Contribution of Funds to the State Treasury

 

                The President and Chief Executive Officer submitted the following report:

SUMMARY 

The Trustees are requested to approve a contribution in the amount of $15 million to the State’s general fund as authorized by legislation approving the 2012-13 Budget of the State of New York (Chapter 59 of the Laws of 2012).

 

BACKGROUND

 

“The Authority is requested, from time to time, to make financial contributions and transfers of funds to the State or to otherwise provide financial support for various State programs, including rebates to customers of the Power For Jobs program, the provision of below-cost energy to the beneficiaries of the State’s Energy Cost Savings Benefits program and the Residential Consumer Discount Program payments related to Recharge NY. 

 

“Any such contribution or transfer of funds must (1) be authorized by the Legislature; (2) be approved by the Trustees ‘as feasible and advisable,’ (3) satisfy the requirements of the Authority’s General Resolution Authorizing Revenue Obligations dated February 24, 1998, as amended and supplemented (‘Bond Resolution’), and (4) as set forth in the Trustees’ Policy Statement dated May 24, 2011, a debt service coverage ratio of 2.0 shall be used as a reference point in considering any such payments or transfers.

 

“The Bond Resolution’s requirements to withdraw monies ‘free and clear of the lien and pledge created by the [Bond] Resolution’ are such that withdrawals (a) must be for a ‘lawful corporate purpose as determined by the Authority,’ and (b) the Authority must determine, taking into account among other considerations anticipated future receipt of revenues or other moneys constituting part of the Trust Estate, that the funds to be so withdrawn are not needed for (i) payment of reasonable and necessary operating expenses, (ii) an Operating Fund reserve for working capital, emergency repairs or replacements, major renewals or for retirement from service, decommissioning or disposal of facilities, (iii) payment of, or accumulation of a reserve for payment of, interest and principal on senior debt or (iv) payment of interest and principal on subordinate debt.

DISCUSSION

 

The State’s fiscal year (‘SFY’) 2012-13 Budget legislation authorizes the Authority as deemed ‘feasible and advisable by its trustees’ to provide up to $65 million in contributions to the State, with up to $25 million to be considered for payment by June 2012 and with the remainder of any such contribution considered for payment by January 2013.

 

In January 2012, the Trustees approved a contribution to the State in the amount of $60 million, pursuant to the last year’s SFY 2011-12 Budget legislation, which was paid at that time.  Last fiscal year’s $60 million amount, together with the up to $25 million considered herein, totals $85 million for the Authority’s calendar year 2012 operations, which is the amount the Authority budgeted for in its 2012 Operating Budget.

 

New York State Division of Budget representatives have indicated that the State’s fiscal plan anticipates a contribution in the amount $15 million from the Authority at this time.  With regard to the remaining amount ($50 million) contemplated in the SFY 2012-13 Budget, staff is not recommending any action at this time, but will return to the Board with a recommendation as to that amount based on the financial circumstances of the Authority at the time such contribution is to be considered for payment. 

 

Staff has reviewed the effects of the $15 million transfer amount on the Authority’s expected financial position and reserve requirements.  In addition, in accordance with the Board’s Policy Statement, staff calculated the impact of these transfer amounts on the Authority’s debt service coverage ratio and determined it would not fall below the 2.0 reference point level.  Given the current financial condition of the Authority, its estimated future revenues, operating expenses, debt service and reserve requirements, staff is of the view that it will be feasible for the Authority to make the contribution of $15 million at this time.

 

FISCAL INFORMATION

 

“Staff has determined that sufficient funds are available in the Operating Fund to transfer $15 million to the State’s general fund at this time and that such Authority funds are not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s Bond Resolution.  Such a transfer for the SFY 2012-13 Budget legislation was anticipated and is within the amount reflected in the Authority’s 2012 Operating Budget approved by the Trustees at their December 15, 2011 meeting. 

 

RECOMMENDATION

 

The Treasurer recommends that the Trustees affirm that the transfer to the State’s general fund of $15 million is feasible and advisable and authorize such payment.

 

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

 

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

RESOLVED, That the Trustees hereby authorize a payment to the State’s general fund in the amount of $15 million from the Operating Fund as authorized by Chapter 59 of the Laws of 2012 as discussed in the foregoing report of the President and Chief Executive Officer; and be it further

RESOLVED, That the amount of $15 million to be used for the contributions to the State’s general fund described in the foregoing resolution is not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That as a condition to making the payment specified in the foregoing resolutions, on the day of such payment, the Treasurer or the Deputy Treasurer shall certify that such monies are not then needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Corporate Secretary, the Treasurer and all other officers of the Authority be, and each of them hereby is, authorized and directed, for and in the name and 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 that they, or any of them, may deem necessary or advisable to effectuate the foregoing resolutions, subject to approval as to the form thereof by the Executive Vice President and General Counsel.

 

16.                Transitional Succession Insurance Coverage

               

                On motion made and seconded the Trustees unanimously adopted the transitional succession insurance coverage as recommended by the Governance Committee.

             

17.                Committee Appointments

 

The Chairman submitted the following report:

 

SUMMARY

 

“In accordance with Article V the By-Laws of the Power Authority of the State of New York, as amended March 27, 2012 (‘By-Laws’), the Trustees are requested to approve the following committee appointments
effective immediately.

 

BACKGROUND

“The following changes in committee composition are recommended in order to achieve an even distribution of assignments for each Trustee and to eliminate any overlap and potential conflict of interest between the Audit and the Finance Committees.  

Audit Committee (new members are in bold)

Terrance P. Flynn (Chair), Eugene L. Nicandri, R. Wayne LeChase

 

Finance Committee

John R. Koelmel (Chair), Jonathan F. Foster, Joanne M. Mahoney,

John S. Dyson

 

Governance Committee

Eugene L. Nicandri (Chair), Joanne M. Mahoney, John R. Koelmel,

Terrance P. Flynn

 

Strategic Planning and Energy Policy Committee

John S. Dyson (Chair), Jonathan F. Foster, R. Wayne LeChase, John R. Koelmel

RECOMMENDATION

 

“The following resolution is recommended for adoption.”

 

                The following resolution, as submitted by the Chairman, was unanimously adopted.

 

RESOLVED, That the members of the Audit Committee shall be: Terrance P. Flynn (Chair), Eugene L. Nicandri, and R. Wayne LeChase, effective immediately; and be it further

 

RESOLVED, That the members of the Finance Committee shall be: John R. Koelmel (Chair), Jonathan F. Foster, Joanne M. Mahoney, and John S. Dyson, effective immediately; and be it further

 

RESOLVED, That the members of the Governance Committee shall be: Eugene L. Nicandri (Chair), Joanne M. Mahoney, John R. Koelmel and Terrance P. Flynn, effective immediately; and be it further

 

RESOLVED, That the members of the Strategic Planning and Energy Policy Committee shall be: John S. Dyson (Chair), Jonathan F. Foster, and R. Wayne LeChase, John R. Koelmel, effective immediately.
 

18.                Next Meeting

 

The next regular meeting of the Trustees will be held on Tuesday, July 31, 2012, at 11:00 a.m., at the Clarence D. Rappleyea Building, 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 2:10 p.m.

 

 

Description: Delince Signature

 

Karen Delince

Corporate Secretary