MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

September 24, 2013

 

Table of Contents

 

 

 

                Subject                                                                                                                                  Page No.               Exhibit

 

                Introduction                                                                                                                               2

1.                   Adoption of the September 24, 2013 Proposed Meeting Agenda                                     3

2.                   Consent Agenda:                                                                                                                       4

a.       Minutes of the Regular Meeting held on July 23, 2013                                      5

b.       Decrease in New York City Governmental Customers                                       6

    Fixed Costs – Notice of Proposed Rulemaking

 

c.        Increase in Westchester County Governmental Customers                               9

    Rates – Notice of Proposed Rulemaking

 

d.       Firm Market Power Service Tariff and Western New York                               11                      2d-A2d-C

    Service Tariff Amendments – Notice of Adoption

 

e.        Direct Sale Contracts for the Sale of Western New York                                  14                      2e-A; 2e-A-1 -

    Hydropower – Transmittal to the Governor                                                                               2e-A-2; 2e-B

 

f.        Transfer of Business Power Allocations                                                               17                     

 

g.       Energy Management Center – Development and                                              19

    Implementation Services – Contract Award

 

h.       Niagara Power Project – Robert Moses South Access                                       22

    Gate Security Enhancements South Access Road

    Improvements – Contract Award

 

i.         Blenheim Gilboa Power Project Security Building and                                      25

    Power Supply – Capital Expenditure Authorization

    and Contract Award

 

j.         Procurement (Services) Contract – Blenheim-Gilboa                                        28

    Pumped-Storage Project Relicensing – Lead Relicensing

    Consultant – Award

 

k.       Procurement (Services) Contract – St. Lawrence/FDR Project                        31

Environmental Services Consultant – Award

 

l.         Procurement (Services) Contracts – Business Units and Facilities –               33                      2l-A2l-B

Awards, Extensions and/or Additional Funding

 

Resolution


 

Subject                                                                                                                                                  Page No.               Exhibit

 

Discussion Agenda:                                                                                                                                 40     

 

3.                   Q&A on Reports from the President and Chief Executive Officer                                  40                      3a-A; 3b-A; 3c-A

4.                   Power Allocations:                                                                                                                    43

a.       Power Allocations Under the Recharge New York Program                             43                      4a-A;                                     

 

b.        Allocation of Hydropower and Notice of Public Hearing                                46                      4b-A; 4b-A-1;

                                                                                                                                                                4b-B;

 

c.       Hydropower Allocation – Contract Extension to Citigroup                              49                      4c-A

    Technology, Inc.

 

5.                   Awards of Fund Benefits from the Western New York Economic                                  51                      5-A5-D

    Development Fund Recommended by the Western New York

    Power Proceeds Allocation Board

Resolution  

 

6.                   Charge NY Program – Expenditure Authorization and Contract                                    56

    Award

Resolution

 

7.                   Informational Item: NYPA Benefits to Western New York                                            61                      7-A

8.                   Informational Item: Strategic Planning Process and Content                                        66                      8-A

9.                   Appointment of Vice Chair of the Authority                                                                       69

10.                Motion to Conduct an Executive Session                                                                            70

11.                Motion to Resume Meeting in Open Session                                                                       71

12.                Next Meeting                                                                                                                             72

Closing                                                                                                                                        78     

 

 

 


Minutes of the Regular Meeting of the Power Authority of the State of New York held via videoconference at the following participating locations at approximately 11:30 a.m.

1)       New York Power Authority, Niagara Power Project, 5777 Lewiston Road, Lewiston, NY

2)       New York Power Authority, 123 Main Street, White Plains, NY

 

Members of the Board present were:

 

                                John R. Koelmel, Chairman

                                Eugene Nicandri, Trustee

                                Jonathan Foster, Trustee

                                R. Wayne LeChase, Trustee

                                Terrance P. Flynn, Trustee

                                Joanne M. Mahoney, Trustee

                               

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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

Jill Anderson                                         Chief of Staff and Director of Energy Policy

Joseph Kessler                                      Senior Vice President – Power Generation

Robert Lurie                                         Senior Vice President – Strategic Planning

James Pasquale                                   Senior Vice President – Economic Development and Energy Efficiency

Joan Tursi                                             Senior Vice President – Corporate Support Services

Bradford Van Auken                          Senior Vice President – Operations Support Services and Chief Engineer

John Canale                                         Vice President – Project Manager

Thomas Concadoro                            Vice President and Controller

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

Joseph Leary                                        Vice President – Community and Government Relations

Harry Francois                                     Regional Manager – Western New York

Karen Delince                                       Corporate Secretary

Frank Deaton                                       Director – Enterprise Risk Management – Energy Risk Assessment and Control

Michael Saltzman                               Director – Media Relations

Lou Paonessa                                       Director – Community Affairs – NIA

Kerry-Jane King                                   Sustainability Manager, Energy Policy

Gary Schmid                                        Manager – Network Services Infrastructure

Ruth Colon                                           Senior Business Integration Project Manager

John Markowitz                                   Lead R & TD Engineer II, Renewable Energy Resources & Technology

John Giumarra                                     Account Executive – Business Marketing and Economic Development

Oksana Karaczewsky                         Senior Compliance Specialist                                           

Lorna M. Johnson                               Associate Corporate Secretary

Sheila Baughman                                                Assistant Corporate Secretary

Katherine Rougeux                             Analyst – Power Resource Planning

Mario Roefaro                                     Community Relations Specialist

Karen Penale                                        Real Estate Administrator – NIA

Paul Pasquarello                                  Photography Services Supervisor    

                               

Chairman John Koelmel presided over the meeting.  Corporate Secretary Delince kept the Minutes.

 


Introduction

                Chairman John Koelmel welcomed the Trustees and staff members who were present at the meeting.  He said the meeting had been duly noticed as required by the Open Meetings Law and called the meeting to order pursuant to the Authority’s Bylaws, Article III, Section 3.


 

1.                   Adoption of the September 24, 2013 Proposed Meeting Agenda

                Chairman Koelmel indicated that there would be an addition to the Agenda, “Appointment of Vice Chair of the Authority.”  Upon motion made and seconded the meeting Agenda was adopted, as amended. 

 


 

2.                   Consent Agenda:               

             Upon motion made and seconded, the Consent Agenda was approved.  Trustee LeChase was recused from the vote on Items #2l (Procurement Awards, Extensions and/or Additional Funding) as it pertains to CHA Consulting, Inc. and #4a (Power Allocations Under the Recharge New York Program) as it pertains to Corning, Incorporated.

 

                 


 

a.       Approval of the Minutes

                The Minutes of the Regular Meeting held on July 23, 2013 were unanimously adopted.


 

b.       Decrease in New York City Governmental

Customers Fixed Costs – Notice of Proposed

Rulemaking                                                            

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to authorize a Notice of Proposed Rulemaking (‘NOPR’) to decrease the Fixed Costs component of the production rates by $8.1 million or 5.3%, not including Astoria Energy II (‘AE II’) plant expenses to be charged in 2014 to the New York City Governmental Customers (‘Customers’).  AE II plant expenses, although part of the Fixed Costs component, are not subject to this NOPR proceeding as recovery of such costs has been agreed to by contract.  The proposal is based on Authority staff’s Preliminary 2014 Cost-of-Service (‘COS’).

               

                In addition, the Trustees are requested to direct the Corporate Secretary to file a NOPR with the New York State Department of State for publication in the New York State Register in accordance with the requirements of the State Administrative Procedure Act (‘SAPA’).  Upon closure of the 45-day statutory comment period concerning this proposed rate action, Authority staff will take into consideration concerns that have been raised and return to the Trustees at their meeting on December 17, 2013, to seek final adoption of this proposal.

 

BACKGROUND

 

                In 2005, the Authority and the Customers entered into supplemental agreements for the purchase of electric service through December 31, 2017.  These agreements (the 2005 ‘Long- Term Agreements,’ or ‘LTAs’) replaced prior agreements entered into during the mid-1990s with these Customers.  The LTAs established a new relationship between the Authority and the Customers that reflects the costs of procuring electricity in the marketplace managed by the New York Independent System Operator (‘NYISO’).  The LTAs define specific cost categories with respect to providing electric service, and prescribe a collaborative process for acquiring resources, managing risk and selecting a cost-recovery mechanism.

               

                The LTAs separate all costs into two distinct categories:  Fixed Costs and Variable Costs.  Fixed Costs include Operation and Maintenance (‘O&M’), Shared Services, Capital Cost, Other Expenses (i.e., certain directly assignable costs) and a credit for investment and other income.  Under the LTAs, the Authority must establish Fixed Costs based on COS principles and make changes based on a filing in accordance with SAPA requirements.  In addition, the LTAs contemplate that year-to-year changes in Fixed Costs will be reviewed by the Customers in advance of the filing made under SAPA; Authority staff must consider the Customers’ concerns before presenting any proposed changes to the Fixed Costs to the Trustees or issuing proposed changes for public comment.

               

                Also, pursuant to the LTAs, the Authority develops the Variable Costs on an annual basis.  These are costs the Authority expects to incur to serve the Customers in the upcoming Rate Year; specifically for fuel and purchased power, risk management, NYISO ancillary services and O&M reserve, less a credit for NYISO revenues from NYPA generation dedicated to these Customers.  The Variable Costs are subject to the Customers’ review and comment.  The cost-recovery mechanisms for the upcoming year’s Variable Costs are selected by the Customers from among the choices set forth in the LTAs.  These cost-recovery mechanisms were previously approved by the Trustees and therefore do not require further approval.

 

On July 10, 2008, the Authority and the Customers entered into an agreement (‘Agreement’) that implemented Article XI of the LTAs concerning the acquisition of long-term resources under a request for proposal (‘RFP’) process.  The RFP resulted in NYPA contracting with Astoria Energy II LLC for the full product toll of a 500 MW combined-cycle unit over a twenty-year period.  The full product toll allows NYPA to capture all energy, capacity and ancillary services output of the generating unit for the benefit of the Customers.  Under the Agreement, the costs incurred by NYPA are to be included as part of the COS based rate, and in order to ensure full recovery of all costs related to the full product toll, NYPA may use a true-up mechanism to assess charges for under-recovery and apply credits for over-recovery of costs.  The 2014 costs related to the AE II service are $139.2 million and have been included in the Fixed Costs component of the Preliminary 2014 COS.  

 

DISCUSSION

 

                Based on the Preliminary 2014 COS, the decreases in Fixed Costs are $8.1 million, or 5.3% lower than the Fixed Costs included in the Final 2013 COS.  These Fixed Costs are the subject of review under this SAPA proceeding.  Although AE II costs are included in the Preliminary 2014 COS, they are outside this NOPR because recovery of NYPA’s AE II costs has been separately agreed to through contracts between NYPA and the Customers.  Contributing to the reduction in Fixed Costs of 5.3% is a projected decrease in Capital Cost of $15.6 million.  The reduction in Capital Costs is largely due to the retirement of the Poletti debt in 2013.

 

Variable Costs are projected to increase by a total of $17.8 million, or 3.4% compared to the Final 2013 COS.  Based on preliminary analyses, Authority staff projects that the 2014 production rate, combining the Fixed and Variable Costs, will increase by about 1.7% compared to the Final 2013 COS.             

 

Under the LTAs, any change in the Fixed Costs component of the Customers’ production rates must be done in accordance with a SAPA proceeding.  Thus, the Customers will have an opportunity to file comments upon the issuance of the NOPR.  After closure of the 45-day statutory comment period concerning the proposal, Authority staff will take into consideration the concerns raised and will return to the Trustees at their meeting on December 17, 2013 to seek final adoption of an appropriate Fixed Costs rate.  Subsequent to such final adoption, staff will incorporate the approved Fixed Costs and the final Variable Costs that are determined in the rate-setting process with the Customers into new production rates to become effective with the January 2014 billing period.

                               

FISCAL INFORMATION

 

                The adoption of this proposal concerning the decrease in Fixed Costs applicable to the Customers under the LTAs would result in the Authority continuing to recover the appropriate Fixed Costs associated with serving these Customers.

 

RECOMMENDATION

 

                The Director – Market Analysis and Administration recommends that the Trustees authorize the Corporate Secretary to file a Notice of Proposed Rulemaking in the New York State Register for the adoption of a decrease in the Fixed Costs component of the production rates (comprising non-AE II costs) by $8.1 million to be charged in 2014 to the New York City Governmental Customers.

 

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

 

                For the reasons stated above, 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 Authority projects a decrease in the Fixed Costs of serving the New York City Governmental Customers when comparing those costs contained in current rates to 2014 projected costs; and be it further

 

                RESOLVED, That the Authority has entered into supplemental Long-Term Agreements with the New York City Governmental Customers and those agreements provide for the recovery of additional Fixed Costs through a rate filing under the State Administrative Procedure Act; and be it further

 

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

 

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

 

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


 

c.        Increase in Westchester County Governmental

Customers Rates – Notice of Proposed Rulemaking

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to approve a Notice of Proposed Rulemaking (‘NOPR’) to increase the production rates by 12.67% as compared to 2013 rates for the Westchester County Governmental Customers (‘Customers’).

               

                In addition, the Trustees are requested to direct the Corporate Secretary to file a NOPR with the New York State Department of State for publication in the New York State Register in accordance with the requirements of the State Administrative Procedure Act (‘SAPA’).  

 

BACKGROUND

 

The Authority provides electricity to 103 governmental customers in Westchester County, which includes the County of Westchester, school districts, housing authorities, cities, towns and villages.  The County of Westchester is the largest single customer, accounting for about one-third of sales.

 

The basis of providing service is contained in the Supplemental Electricity Agreements (‘Agreements’) with the Customers.  The Agreements were approved by the Trustees at their December 19, 2006 meeting, and were signed by each of the 103 Customers.  Among other things, the Agreements: permit the Authority to modify the Customers’ rates (for Rate Years subsequent to 2007) at any time based on a fully supported pro forma cost-of-service (‘COS’) subject to customer review and comment and compliance with the SAPA process; permit the Customers to fully terminate service on one year’s written notice, which, if given, could be effective no earlier than January 1, 2015; and allow the Authority to apply an Energy Charge Adjustment (‘ECA’) mechanism to the Customers’ bills each month.

 

The current 2013 base production rates were adopted by the Trustees at their February 26, 2013 meeting, when they approved a 3.21% decrease over 2012 rates.  Staff is now proposing a 2014 rate increase, over the 2013 rates, which is largely due to expected increases in energy prices for electricity purchased from the New York Independent System Operator (‘NYISO’) market to serve these customers.

 

DISCUSSION

                Consistent with the Authority’s past rate-making practices and with the rate-setting process set forth in the Agreements, the proposed production rate increase is based on a pro forma COS for next year.  The Preliminary 2014 COS for the Westchester Customers is $38.67 million.  The primary cost element, energy purchases, is $30.83 million and accounts for 79.7% of the total production costs.  Even though these Customers receive a pro-rated share of energy from the small hydro generation facilities, most of their energy requirements are purchased from the market (in NYISO Zones ‘G’ (Hudson Valley) and ‘A’ (Western New York)).  The projected 2014 prices for these two zones are expected to be higher than those that were projected for 2013 and incorporated into the rates that are currently in effect.  Further analysis shows that under current rates, combined with the 2014 Customer sales forecast, the projected revenues would be $34.32 million, resulting in an under-collection of $4.35 million from Customers.  Therefore, staff is proposing a 12.67% increase in base production rates to reflect the rise in the purchased energy costs as contained in the currently effective 2013 rates.

 

                Under the Agreements, the Authority must provide at least 30 days’ notice to the Customers of any proposed modification of rates and the proposed modification is subject to their review and comment.  Notification of the rate action was transmitted to the Customers on August 14, 2013.  Subsequent to the approval of this proposed action by the Trustees, the Customers will be mailed the Staff Report containing the Preliminary 2014 COS.

 

                Under SAPA, there is a 45-day comment period.  After written comments are filed, Authority staff will review them and address any concerns raised.  Staff will make any necessary changes to the proposed rates and return to the Trustees at their December 17, 2013 meeting to request approval of the final rate modification for 2014.      

 

FISCAL INFORMATION

 

                The proposed production rates are cost-based, and with the application of the ECA mechanism, staff anticipates that the Authority will recover all costs incurred in serving the Customers.

 

RECOMMENDATION

 

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

 

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

 

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 Authority proposes an increase in the production rates applicable to the Westchester County Governmental Customers 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 issue written notice of this proposed action to the affected Customers; and be it further

 

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

 

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

 

 


 

d.       Firm Market Power Service Tariff and

Western New York Service Tariff

                        Amendments – Notice of Adoption             

               

The President and Chief Executive Officer submitted the following report:

SUMMARY

The Trustees are requested to take final action to approve: (1) the replacement of the Authority’s two current direct firm power service tariffs, Service Tariff Nos. 1 and 1B (‘ST 1’ and ‘ST 1B’) applicable to certain market power customers with the proposed ‘Schedule of Rates for Sale of Firm Market Power,’ Service Tariff No. 1C (‘ST 1C’); and (2) amend the current Western New York (‘WNY’) service tariff, Service Tariff No. WNY-1 (‘ST WNY-1’) which is applicable to the Authority’s Expansion Power (‘EP’) and Replacement Power (‘RP’) customers.  The proposed ST 1C and ST WNY-1 are attached as Exhibits ‘2d-A’ and ‘2d-B,’ respectively.  As proposed, these tariff revisions would become effective with the October 2013 billing period.

BACKGROUND 

At their May 21, 2013 meeting, the Trustees directed the publication in the New York State Register (‘State Register’) of a notice that the Authority proposed to make several administrative changes to the Authority’s current market tariffs and WNY tariff.  The State Register notice was published on June 12, 2013 in accordance with the State Administrative Procedure Act (‘SAPA’).  The public comment period closed on July 29, 2013.

As explained in the May 21st memorandum to the Trustees, the Authority proposed these tariff changes in order to:

·         Provide consistency with the Authority’s other tariffs;

·         Improve clarity and organization;

·         Clarify the Authority’s role with direct service billing by adding provisions addressing estimated billing, adjustments to charges, rendition and payment of bills, late payment charges, and deposits;

·         Add provisions that have been included in other Authority tariffs and are applicable to the service provided to these customer groups; and

·         Eliminate provisions that are no longer relevant.

In addition to the changes proposed at the May 21st meeting, the Authority proposes to make some ministerial formatting changes to the WNY tariff to further improve the tariff’s organization and make it more consistent with the Authority’s other service tariffs.  Such additional changes are administrative in nature, do not affect production rates or billing procedures, and make no substantive change to the original proposal in this SAPA proceeding.

DISCUSSION

                No comments were received in relation to the proposed ST-1C applicable to certain market power customers.  Timely written comments were submitted by Power for Economic Prosperity (‘PEP’) concerning the proposed ST WNY-1 changes, which are attached as Exhibit ‘2d-C.’  PEP is an organization that represents several large industrial consumers in New York State, many of whom purchase EP or RP from the Authority.  A summary of the comments received, along with Authority staff’s analysis and recommendations are set forth below.  Revisions consistent with such recommendations are incorporated in the service tariffs for which approval is requested today.

Issue 1: Agreement References in Load Split Methodology Definition

PEP commented that the proposed definition of the term ‘Load Split Methodology (‘LSM’)’ in the tariff revisions for ST WNY-1 excludes reference to ‘an Agreement between the Authority and the Customer, or an Agreement between the Authority, the Customer and the Customer’s local electric utility, or such utility’s tariff…’  In addition, PEP expressed that this clarification should be incorporated into all sections of the tariff referencing the Agreements as they relate to the term LSM.

Staff Analysis:

                The Authority accepts PEP’s proposed changes to the LSM’s definition in ST WNY-1.  Staff has clarified the definition of the term Load Split Methodology in ST WNY-1 to include references to Customer Agreements involving the Authority and/or the Customer’s local electric utility.

Issue 2: ‘Liquidated Damages’ Term

PEP commented that the inclusion of the term ‘liquidated damages’ in Section IV.G. of the WNY tariff, pertaining to the rendition and payment of bills, is inappropriate and should be deleted from the tariff.  PEP states that ‘liquidated damages’ is a legal term that references monetary compensation ‘awarded by a court judgment or by contract stipulation.’  PEP argues that the interest provision in ST WNY-1 is a penalty to the customer and should not be deemed as liquidated damages.  PEP proposed that all references to the term liquidated damages in

ST WNY-1 should be deleted from the tariff.

Staff Analysis:

                The Authority disagrees with PEP’s request to delete the ‘liquidated damages’ term.  The Authority currently employs this term in its other service tariffs where it performs direct billing, most notably in its Recharge New York tariff, Service Tariff No. RNY-1.  In addition, the Authority’s service tariffs are incorporated into its power sales contracts, so this liquidated damages provision operates like a contractual stipulation.  Black’s Law Dictionary defines liquidated damages as ‘an amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other breaches.’[*]  There has been no suggestion that assessing interest charges in the manner described is an unreasonable way to be compensated for the harm resulting from late payments.  Accordingly, the Authority declines to make the requested change.

FISCAL INFORMATION

                Adoption of the proposed ST WNY-1 and ST 1C will have no financial impact.  The changes proposed are administrative in nature and will have no effect on current production rates.        

RECOMMENDATION

                The Director – Market Analysis and Administration recommends that the attached amended WNY tariff, applicable to the Authority’s Expansion Power and Replacement Power customers, and the proposed market power tariff, applicable to certain Authority market power customers, be approved and that the Trustees authorize the Corporate Secretary to file a Notice of Adoption for publication in the New York State Register in accordance with the State Administrative Procedure Act.  The requested effective date of these tariffs is October 1, 2013.

                It is also recommended that the Senior Vice President – Economic Development and Energy Efficiency, or his designee, be authorized to issue written notice of adoption and the revised tariff leaves, as necessary, to the affected customers.

                For the reason stated above, 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 Senior Vice President – Economic Development and Energy Efficiency or his designee be, and hereby is, authorized to issue written notice of this final action by the Trustees to the affected Customers as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

                RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to file such notices as may be required with the New York State Department of State for publication in the New York State Register; 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 delivery any and all certificates, agreements and other documents to effectuates the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

e.        Direct Sale Contracts for the Sale of Western New

York Hydropower – Transmittal to the Governor

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to: (1) approve proposed final contracts for two Replacement Power (‘RP’) customers, Advance 2000, Inc. and Niagara Refining LLC; and (2) authorize transmittal to the Governor of the proposed final contracts for his approval and authorization for the Authority to execute the contracts pursuant to Public Authorities Law (‘PAL’) §1009.  The proposed final contracts to each customer are attached as Exhibits ‘2e-A-1’ and ‘2e-A-2.’

 

BACKGROUND

 

Under PAL §1005(13), the Authority may allocate and sell directly or by sale for resale, 250 MW of Expansion Power (‘EP’) and 445 MW of RP to businesses located within 30 miles of the Niagara Power Project, provided that the amount of EP allocated to businesses in Chautauqua County on January 1, 1987 shall continue to be allocated in such county.

 

At their May 21, 2013 meeting, the Trustees awarded allocations of RP to Advance 2000, Inc. and Niagara Refining LLC in return for job creation and capital expansion commitments.  The final proposed contracts would enable the Authority to sell these customers their allocations under a direct sale arrangement for the approved seven-year term of the allocations.  Transmission and delivery service for these allocations would be provided by National Grid in accordance with its Public Service Commission-filed delivery service tariffs. 

 

                The following is a summary of some pertinent provisions of these contracts:

 

·         The contracts would provide for the direct billing of all production charges (i.e. demand and energy) as well as all New York Independent System Operator, Inc. (‘NYISO’) charges, plus taxes or any other required assessments, as set forth in the Trustee approved Service Tariff WNY-1 (‘ST WNY-1’). 

 

·         The contracts include each customer’s agreed-upon commitments with respect to employment, power utilization and capital investment.  The Authority would retain the right to reduce or terminate customers’ allocations if employment, power utilization, or capital investment commitments are not met. 

 

·         The contracts include the ability to award additional allocations of EP or RP to the customers at the same facility, which would be incorporated into Schedule A of the contracts.  The Trustees approved this convention in the 2010 long-term extension contracts, which simplifies contract administration.

 

·         To accommodate non-payment risk that could result from a direct billing arrangement with the Authority, the contracts include commercially reasonable provisions concerning, among other things, the ability to require deposits in the event of the customer’s failure to make payment for any two monthly bills.  This is consistent with recent Authority contracts that incorporate direct billing, including the Authority’s Recharge New York sales contracts.

 

The Authority has discussed each contract with the relevant customer and in each case has received the customer’s consent to the proposed contract.  The customers acknowledge that ST WNY-1 rates will apply to their allocations consistent with all allocations of EP and RP as of July 1, 2013.

 

As required by PAL §1009, when the Authority has reached agreement with its co-party on such a contract, it is required to transmit the proposed contract to the Governor and other elected officials and hold a public hearing on the proposed contracts.  At least 30-days’ notice of the hearing must be given by publication once in each week during such period in each of six selected newspapers.  Following the public hearing, the contract may be modified, if advisable. 

 

Upon approval of the final proposed contract by the Authority, the Authority must ‘report’ the proposed contract, along with its recommendations and the public hearing records, to the Governor and other elected officials.  Upon approval by the Governor, the Authority may execute the contract.

 

DISCUSSION

 

At their May 21, 2013 meeting, the Trustees authorized the Corporate Secretary to transmit the proposed contracts to the Governor and legislative leaders and schedule a public hearing on the contracts.  A public hearing on the contracts was held on July 25, 2013 at the Niagara Power Project’s Power Vista Visitors’ Center in Lewiston, New York.  There were no oral statements made at the public hearing and no written statements were submitted.  The official transcript of the public hearing is attached as Exhibit ‘2e-B.’

 

RECOMMENDATION

 

The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the proposed contracts to Advance Inc. and Niagara Refining, as detailed in Exhibit ‘2e-A-1 and 2e-A-2,’ for the sale of Replacement Power and authorize the transmittal of the contracts to the Governor for approval. 

 

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 contracts for the sale of Replacement Power (“RP”) to Advance 2000, Inc. and Niagara Refining, LLC, are in the public interest and should be submitted to the Governor for his approval and that copies of the contracts, along with the record of the public hearing 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; and be it further

 

RESOLVED, That the Chairman and the Corporate Secretary be authorized and directed to execute such contracts in the name of, and on behalf of, the Authority after the contracts have 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 contracts with the companies 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.

 

 


 

f.        Transfer of Business Power Allocations

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

                The Trustees are requested to approve the transfer of Recharge New York (‘RNY’) Power and Replacement Power (‘RP’) allocations for four existing customers, Avery Dennison Information Systems, APP Pharmaceuticals, LLC, ESCO Turbine Technologies Syracuse, and Syracuse Castings Sales Corporation, which have requested such transfers due to changes of corporate ownership.

 

BACKGROUND

 

This is an administrative item brought to the Trustees at regular intervals.  All four of the companies are requesting that the Trustees approve a transfer of their existing power allocation to a new corporate entity.  The power allocation and/or benefits for these four customers will continue to be delivered to the same location.  All of the customers will continue to provide the same products and/or services as they did prior to the transfers.  The reasons for such transfer requests are described below.

 

The transfer of RNY Power allocations involved in this item were approved by the Economic Development Power Allocation Board (‘EDPAB’) at its September 24, 2013 meeting, as required by Economic Development Law § 188-a(g).

 

                The EDPAB and the Trustees have approved transfers of this nature in the past.

DISCUSSION

 

                Avery Dennison Information Systems (‘Avery’), located in Buffalo, Erie County, has a 250-kilowatt (‘kW’) RP allocation most recently extended by the Trustees on May 26, 2010 as part of the comprehensive Western New York hydropower extensions.  Avery is currently in compliance with its contractual obligations.  Avery and all of its assets and liabilities were acquired by CCL Label Inc. (‘CCL’) on July 1, 2013 and CCL has requested the transfer of the RP allocation from Avery to CCL.  The Authority has been advised that the transferee will commit to honor all of the terms and conditions that pertain to the RP allocation including commitments related to jobs and capital investment.

 

APP Pharmaceuticals (‘APP’), located in Grand Island, Erie County, has four RP allocations totaling 4,500 kW, consisting of two active allocations totaling 2,000 kW extended as part of the comprehensive Western New York hydropower extensions, and two pending allocations totaling 2,500 kW not yet in service.  In 2008 APP’s parent company, Fresenius Kabi Pharmaceuticals Holding, Inc. (‘Fresenius’), completed an asset and liability acquisition of APP.  Fresenius decided to keep APP as the corporate subsidiary until August 2012, when Fresenius dissolved APP as a corporate entity and completed the business transition.  The company is requesting to transfer the four allocations to Fresenius Kabi USA, LLC.  The Authority has been advised that the transferee will commit to honor all of the terms and conditions that pertain to the RP allocations including commitments related to jobs and capital investment.

 

ESCO Turbine Technologies Syracuse (‘ESCO’), with facilities located in Chittenango, Madison County, was recommended for and received a 906 kW RNY Power allocation on April 24, 2012.  Due to the sale of the company’s assets and liabilities, ESCO is now named Consolidated Precision Products Syracuse.  The company has requested that the allocation be transferred to a new corporate entity  named ‘Consolidated Precision Products Syracuse’ and has indicated that the new entity will commit to honor all of the terms and conditions of the company’s existing RNY Power contract, including those related to jobs and capital investment.

 

Syracuse Castings Sales Corporation (‘Syracuse Castings’), with facilities located in Cicero, Onondaga County, was recommended for and awarded a 146-kW RNY Power allocation on April 24, 2012.  Due to the sale of the company’s assets and liabilities, Syracuse Castings is now East Jordan Iron Works, Inc., d/b/a EJ USA, Inc.  The company has requested that the allocation be transferred to a new corporate entity named ‘East Jordan Iron Works, Inc.’  The Authority has not yet executed a contract with the customer as it awaits the formal transfer approval.  The Authority has been advised that the transferee will commit to honor all of the terms and conditions that pertain to the RNY Power allocation, including commitments related to jobs and capital investment.

RECOMMENDATION

 

                The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the transfer of the power allocations for four existing customers, Avery Dennison Information Systems, APP Pharmaceuticals, LLC, ESCO Turbine Technologies Syracuse, and Syracuse Castings Sales Corporation, which have undergone changes in corporate ownership.  All of the transferees are maintaining the same industry operations and agree to meet contractual commitments associated with the power allocations.

 

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 Authority hereby authorizes the transfers of Recharge New York and Replacement Power allocations to four companies in accordance with the terms described in the foregoing report of the President and Chief Executive Officer; and be it further

 

                RESOLVED, That the Chairman, the 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.       Energy Management Center – Development

                        and Implementation Services – Contract Award

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

The Trustees are requested to approve the award of a contract to Talisen Technologies, Inc., (‘Talisen’) of St. Louis, Missouri for services related to the development and implementation of the Authority’s Energy Management Center (‘EMC’), including software and licensing fees, for a term of up to five years and an amount not to exceed $1.79 million.

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 proposes to develop a centralized EMC that will provide real-time energy management services to its customers.  The EMC will serve as a virtual hub for continuous monitoring, analysis, forecasting and management of facility energy (electricity and gas) supply, consumption and costs.  The EMC will help participating customers reduce energy use and expenses by identifying operation and maintenance improvements and cost-effective energy efficiency measures and also reducing peak demand, where possible.  Similar monitoring services have been proven to reduce energy consumption by at least five percent through the identification of no-cost and low-cost measures.  As an ongoing resource, the EMC will help ensure customers achieve significant and sustained energy and cost savings.

The EMC will be used to support the implementation of Build Smart NY, Governor Andrew Cuomo’s initiative authorized under New York State Executive Order 88 requiring all state agencies and authorities to reduce their source energy utilization intensity by 20% within seven years.  The Authority serves as the manager and implementer of the Build Smart NY initiative.  The EMC will also provide effective measurement and verification (‘M&V’) tools for energy efficiency projects as well as additional tools and services to support the Authority’s demand response program.  The Authority expects to see increased activity in its energy efficiency and demand response programs as a result of this program.

Eligible customers for the EMC will include all public sector entities (electricity and energy efficiency customers) and businesses that participate in the Authority’s economic development programs.  Target buildings will include office buildings, university campuses, healthcare facilities (including hospitals), transit facilities, garages and warehouses.

A qualified vendor will oversee management of the EMC for the first year and will train NYPA staff in the use of the data system and tools. Thereafter, daily management of the EMC will be transferred to NYPA.  The Authority will dedicate two full-time equivalent staff to oversee the implementation of the EMC in the first year and management of the EMC in subsequent years, including day-to-day customer analytical support.  The Authority envisions charging a fee per energy meter monitored and estimates the costs for the service will be more than paid for by the savings customers will realize from the EMC.

DISCUSSION

The Authority solicited proposals from qualified vendors for the EMC through a Request for Proposals (‘RFP’), Q13-5487FS, advertised in the New State Contract Reporter on June 6, 2013.  One hundred and twenty (120) companies downloaded the RFP.  On July 3, 2013, the proposal due date, thirteen (13) proposals were received.

A cross-departmental Evaluation Committee reviewed the 13 proposals for technical capability to fulfill the requirements of the RFP.  The Committee evaluated the qualifications and experience of each vendor, the functionality of the proposed system, and the range and quality of services offered to support the system, as further discussed in the award recommendation documents. 

After a thorough evaluation of the proposals, proposed costs and subsequent interviews, the Evaluation Committee determined that Talisen is the most technically qualified bidder.  Talisen’s solution is being effectively used in its current form by numerous customers.  Talisen has extensive experience with complex government projects, including work for the State of Missouri and United States Department of Agriculture, and these projects are comparable to the work The Authority will require.  The company successfully helped the State of Missouri achieve a planned ten-year 20% energy reduction target in four years.  The proposed team has demonstrated its ability to manage the Authority’s project effectively and be responsive to both Authority and customer needs.

The services provided by Talisen will include:

1.       Centralized Data System - Establish a centralized data system that will collect and maintain data from local data collection devices at each participating customer site.

 

2.       Local Data Collection Software - Provide vendor neutral software for customer local data collection devices to connect with customer data measurement tools (meters, data loggers, building management systems) and the centralized data system.  Data at each customer site will be aggregated by the local data collection devices which will transmit the data regularly to the centralized data system.

 

3.       Analysis and Reporting Tools - Provide software for analytical and reporting functions, including monitoring of electricity and thermal (gas) energy use, basic energy analysis (comparisons, trends), advanced analysis (anomaly detection, alarms, monitoring and verification support), financial analysis (rate assessment, bill verification), and support for demand response programs.  Functionality will also include configurable dashboards and reports that can be customized by user profile.

 

4.       System Upgrades - Develop system enhancements, functionality and interfaces, as needed, to support Build Smart NY, Energy Efficiency M&V, Demand Response and other Authority programs.

 

5.       Data Analysis, Training and Technical Support - During the first twelve months of implementation, analyze energy consumption data for all buildings connected to the EMC and make recommendations for customer energy usage reduction; train Authority staff on the management of the system and use of the analytical and reporting tools; train customers in use of dashboard and interpretation of reports.  Provide on-going technical support to Authority staff after the first twelve months, as needed.

 

6.       Customer Outreach - Assist Authority in developing plans to market EMC services to other potential customers.

 

7.       Pilot Project and EMC Roll-Out - Connect the Authority’s White Plains office building and three to four additional pilot sites at customer facilities to the EMC.  Connect additional facilities to the EMC as more customers enroll.

 

FISCAL INFORMATION

The total award amount of up to $1.79 million will be made from the Operating Fund.  This award includes funds for EMC data system design and implementation, assistance with EMC management, Authority staff training, and on-going technical support. 

RECOMMENDATION

The Chief of Staff to the President and Chief Executive Officer, the Senior Vice President – Economic Development and Energy Efficiency, the Senior Vice President – Strategic Planning, and the Director of Energy Policy recommend that the Trustees approve the award of a contract to Talisen Technologies, Inc. for services related to the development and implementation of the Energy Management Center, including software and licensing fees, for up to a five-year term and an amount not to exceed $1.79 million. 

 

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.”

 

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

 

RESOLVED, That in accordance with the Guidelines for Procurement Contracts adopted by the Authority and the Authority’s Expenditure Authorization Procedures, approval is hereby granted to award a contract in the amount of up to $1.79 million for the development and launch of an Energy Management Center to the firm listed below, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                                                                                        Contract               Completion

                                                        Consultant                            Approval                     Date         

 

                Talisen Technologies, Inc.       $1.79 million       on or about

                                                                                                        10/15/2018

(or five years

after the actual

effective date)

                                                               

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

 

 


 

h.       Niagara Power Project –

Robert Moses South Access Gate

                        Security Enhancements –

                        South Access Road Improvements

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

The Trustees are requested to approve the award of a two-year contract in the amount of $3,646,000 to Edbauer Construction, Inc. (‘Edbauer’) of West Seneca, NY for the modifications and upgrades required for the Niagara Power Project Robert Moses South Access Gate Security Enhancements, South Access Road Improvements.

 

In order to provide the additional time necessary to complete season-critical construction operations for the road improvements prior to the winter weather, in accordance with the Authority’s Guidelines for Procurement Contracts, interim approval in the amount of $600,000 was authorized in July 2013 by the Chief Operating Officer for Edbauer to commence with the initial construction activities.

 

The Capital Expenditure Authorization Request (‘CEAR’) for the Niagara Power Project Robert Moses South Access Gate Security Enhancements (the ‘Project’) in the amount of $7,769,000 was approved at the Trustees’ July 23, 2013 meeting.  This project consists of two individual contracts, one for the Guard House Replacement and the other for the South Access Road Improvements.  The contract for the Guard House Replacement was subsequently awarded and construction has commenced; it is scheduled to be completed by December 2013.

 

BACKGROUND

 

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

 

The South Access Road (the ‘Road’), a steep inclined road, serves as the main entrance into the Robert Moses Niagara Power Project (‘RMNPP’).  The Road extends along the Niagara River leading to the security guardhouse and main gate at the base of the Niagara River gorge.  Additionally, the Road provides public access to the fishing pier and associated parking lots, one at the top and another at the base of the Road. 

 

Over the last several years, there have been three incidents involving vehicles crashing through the main security gate.  As a result, the gate was modified and reinforced to prevent vehicle intrusion.  Additionally, a highway consultant was contracted to study and propose roadway modifications and enhancements for the Road.  Based on the consultant’s study, the proposed enhancements include:

 

·         An emergency stopping area at the base of the Road to assist drivers with stopping their vehicle;

·         Realignment at the base of the Road to include an ‘S’ curve to prevent vehicles  intentionally trying to breach the security gate at high speed;

·         Construction of a 400 ft. long retaining wall to accommodate the Road realignment;

·         Relocation of the lower public parking area near the fishing pier to improve security, public safety and accommodate the new road configuration;

·         Construction of a dedicated pedestrian path from the upper parking lot to the fishing pier;

·         Installation of radar speed signs and rumble strips to promote slower vehicle speeds;

·         Construction of a vehicle ‘check-in’ point and turnaround area at the top of the Road to prevent unauthorized vehicles from continuing down the Road.

 


 

DISCUSSION

 

The Authority issued an advertisement (Q13-5494JDM) in the New York State Contract Reporter and bid packages were available as of June 14, 2013.  Seventy (70) companies downloaded the bid documents via the Authority’s website.  A bid walk-down at the Niagara Project was conducted on June 25, 2013 and nine (9) companies attended.

 

Three (3) proposals were received on July 17, 2013.  The bidders’ pricing summary is as follows:

 

Edbauer Construction                                                        $ 3,646,000

 

Yarussi Construction                                                          $ 3,955,599

 

Scrufari Construction                                                         $ 4,051,500

 

NYPA Fair Cost Estimate                                                  $ 3,943,343

 

Edbauer’s bid was the lowest in price and was also technically acceptable.  Edbauer, having extensive experience in general construction, has demonstrated knowledge of the scope-of-work and is capable of completing this project in accordance with the required schedule.  In addition, Edbauer has performed to the Authority’s satisfaction on previous projects.

 

FISCAL INFORMATION

 

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

 

RECOMMENDATION

 

The Senior Vice President and Chief Engineer – Operations Support Services, the Vice President – Project Management, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees award a contract to Edbauer Construction of West Seneca, NY in the amount of $3,646,000 for the modifications and upgrades required at the Niagara Power Project, Robert Moses South Access Gate Security Enhancements, South Access Road Improvements.

 

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 pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a two-year contract to Edbauer Construction, Inc., of West Seneca, NY in the amount of $3,646,000 for construction services for implementation of the Niagara Power Project Robert Moses South Access Gate Security Enhancements, South Access Road Improvements, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                                                                Contractor                                   Contract Approval

 

                                        Edbauer Construction, Inc.                     $3,646,000

                                        West Seneca, N.Y.

 


 

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.

 


 

i.         Blenheim Gilboa Power Project –

Security Building and Power Supply –

                        Capital Expenditure Authorization

                        and Contract Award                                 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

The Trustees are requested to authorize capital expenditures in the total amount of $11.45 million to design and construct a new security building, including a new power supply to the spillway and security buildings, at the Blenheim-Gilboa (‘B-G’) Power Project.  In addition, approval is requested to award a contract, in the amount of $3.62 million, to Beebe Construction Services, Inc. (‘Beebe’) of Utica, N.Y. to construct a new security building and associated site development.  The work is scheduled to commence in 2013 and be completed in 2014.

 

The President and Chief Executive Officer has already authorized $1,000,000 for preliminary engineering.

 

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.  Also, in accordance with the Authority’s Expenditure Authorization Procedures, the award of non-personal services or equipment purchase contracts exceeding $3 million require the Trustees’ approval.

 

This funding request includes design and construction of site developments, a new security building at the north gate and a new power supply to the spillway and security buildings.  The proposed location of the new security building optimizes its location outside the north gate enhancing functionality of the security staff and improving the overall security of the B-G Power Project.  In addition to supplying electricity and communications to the new security building, the new power supply will provide highly reliable electric service from the powerhouse station service system to the spillway flood gates, resulting in additional redundancy to operate the tainter gates in extreme emergencies.  

 

The project will be constructed in multiple phases, including installation of a 1.3 mile underground duct bank to bring station service electricity and fiber optic communications from the powerhouse to the spillway and new security buildings.  Also included in this funding request are significant upgrades in site fiber optic network and security monitoring equipment that will satisfy present and future North American Electric Reliability Corporation (‘NERC’) requirements.

 

DISCUSSION

 

The new Security Building and Power Supply Project includes the following tasks: 

 

1.       Engineering and architectural design of site development of the new security building.

2.       Engineering and architectural design of new security building.

3.       Engineering and design of new power supply to spillway and new security buildings.

4.       Engineering and design of fiber optic communications to spillway and security buildings.

5.       Engineering and design to upgrade the access road guardrail along spillway embankment.

6.       Construction of new security building and associated site development.

7.       Construction of power supply to spillway and new security buildings.

8.       Construction of upgraded access road guardrail along spillway embankment.

9.       Procurement and installation of security monitoring equipment upgrades

The Authority issued a Request for Quotation (‘RFQ’) (Q125504RH) in the New York State Contract Reporter and bid packages for the New Security Building and Site Development were available as of July 17, 2013.  Seven (7) proposals were received on August 21, 2013. 

 

The proposals were reviewed by an evaluation committee comprising of staff from C&S Engineers (Engineer of Record), B-G plant, Engineering, Procurement, and Project Management.

 

The Evaluation Committee reviewed in detail the three lowest bids initially submitted and determined that the bid from Beebe was the lowest evaluated technically acceptable bid.  Beebe has extensive experience in construction of this magnitude, has demonstrated knowledge of the scope-of-work and is capable of completing this project in a timely manner.  The Authority’s experience with Beebe on past projects has been satisfactory.  The contract work will be performed from 2013 to 2014.

 

The total project cost is estimated to be $11.45 million as follows:

 

Task

Capital Expenditures

Engineering

$  1,102,500

Procurement

$  1,207,500

Construction

$  6,924,000

Authority Direct Expense

$     666,800

Authority Indirect Expense

$     545,000

Total:

$11,445,800

 

FISCAL INFORMATION

 

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

 

RECOMMENDATION

 

The Senior Vice President and Chief Engineer – Operations Support Services, the Vice President – Project Management, the Vice President – Procurement, the Vice President – Engineering, the Project Manager, and the Regional Manager – Central New York recommend that the Trustees authorize capital expenditures in the amount of $11.45 million and approve the award of a contract to Beebe Construction Services, Inc. of Utica, N.Y., in the amount of $3.62 million for the new security building and power supply project at Blenheim-Gilboa 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 unanimously adopted.

 

RESOLVED, That pursuant to the Authority’s Expenditure Authorization Procedures, approval is hereby granted to authorize capital expenditures in the amount of $11.45 million for a new security building and power supply system at the Blenheim-Gilboa Power Project 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, approval is hereby granted to award a contract to Beebe Construction Services, Inc. in the amount of $3.62 million to furnish all labor, materials, and equipment to construct a new security building and site development for the Blenheim-Gilboa Power Project.

 


 

CONTRACTOR                 CONTRACT APPROVAL

 

Beebe Construction Services, Inc.                  $3.62 million

Utica, N.Y.

 

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

 


 

j.         Procurement (Services) Contract –

Blenheim-Gilboa Pumped-Storage Project

Relicensing – Lead Relicensing Consultant –

                        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 Kleinschmidt Associates, P.A., P.C. (‘KA’) of Pittsfield, ME to provide consulting services in support of the second phase of the relicensing of the Blenheim-Gilboa Pumped-Storage Project (the ‘B-G Project’).  The term of the contract will be for five years.  The amount for which authorization is requested is $5.6 million.

 

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.

                On December 13, 2010, the Trustees authorized the capital expenditure of up to $8.7 million to conduct the first phase of the relicensing of the B-G Project.  This request seeks to award a multiyear contract for the Lead Consultant to assist the Authority in this effort.

 

DISCUSSION

               

In 1969, The Federal Power Commission (now the Federal Energy Regulatory Commission (‘FERC’)), issued a 50-year license for the B-G Project.  This license expires in April 2019.  In addition to the St. Lawrence and Niagara projects, the B-G Project represents the core of the Authority’s generation system.  The Authority needs to obtain a new license for the B-G Project to continue to operate it after the original license expires.

 

                The Authority has considerable experience with relicensing its large hydroelectric projects, but FERC’s relicensing process is long and complicated.  To assist the Authority in this important effort, the Authority is proposing to  engage a Lead Relicensing Consultant who will provide a broad range of services through either its own resources, or, as appropriate, through the use of subcontractors.

 

                Previously, a Lead Consultant was engaged to support the Authority in the first phase that involved assembling and researching information, preparation of documents and support for informal consultation with stakeholders.  The contract for the first phase was awarded to KA and this work is now largely completed.

 

                The second phase will involve the formal FERC relicensing process including issue scoping, study selection and planning, study field work and reporting and preparing the license application.  The second phase is, by regulation, a highly structured schedule driven process and is triggered by the filing of the documents prepared in the first phase.

 

To address the need for a Lead Relicensing Consultant to support the FERC process, the Authority solicited proposals (Q13-5498FS) from qualified consultants, and received one proposal from KA which had provided Lead Consultant Services for the first phase of the B-G relicensing.       

 

KA is well known to the Authority, has extensive hydroelectric relicensing experience and is technically qualified.  KA has proposed to continue a team approach which would combine the resources of Gomez & Sullivan Engineers and TRC Solutions with their own resources.  This is the same team that had satisfactorily supported the first phase of the B-G Project relicensing and is very similar to the team currently implementing the Niagara Project new license Compliance and Implementation program. 

 

The evaluation team agreed that the KA team is very capable of providing a quality work product, and have proven this with their performance in first phase and in other Authority projects.  These organizations have been working together successfully on Authority projects for years.  Their experience in relicensing pumped-storage projects is unparalleled.  The KA team has firsthand knowledge of B-G and the relicensing effort to date, and have a clear understanding of the steps necessary to advance this effort.  The KA team has extensive experience with the New York State regulatory agencies such as the New York State Department of Environmental Conservation that will play a pivotal role in the relicensing.  The KA team has extensive staff resources which addresses the concern that the departure of key personnel would reduce the consultant’s ability to assist the Authority. 

 

The proposed contract would be a time and materials contract.  The KA team proposal should completely meet the Authority’s needs in this effort in light of their extensive experience with pumped-storage project relicensing and New York regulatory agencies, as well as the extent of their staff resources.

FISCAL INFORMATION

 

Since these expenditures are related to the relicensing of the Blenheim-Gilboa Project, they will be treated as a capital expense and payments will be made from the Capital Fund.  There are sufficient funds remaining from the $8.7 million authorization to cover the cost of this contract; therefore, no additional authorization is being sought at this time.  It is possible that additional funding may be necessary after the scope and nature of the studies necessary to support the relicensing are better known.

 

RECOMMENDATION

 

The Vice President – Project Development and Licensing, the Vice President – Procurement, the Regional Manager – Central New York and the Director – Relicensing and Implementation recommend that the Trustees authorize award of a contract to Kleinschmidt Associates P.A., P.C. for $5.6 million to provide consulting services in support of the second phase of the relicensing of the Blenheim-Gilboa Pumped-Storage 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 unanimously adopted.

 

 

RESOLVED, That pursuant to the Authority’s Expenditure Authorization Procedures and the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a contract to Kleinschmidt Associates P.A., P.C. for five years, in an amount of $5.6 million to provide consulting services in support of the second phase of the relicensing of the Blenheim-Gilboa Pumped-Storage Project, as recommended in the foregoing report of the President and Chief Executive Officer;

 

Contractor                                           Contract Approval

 

Kleinschmidt Associates P.A., P.C.                $5,600,000

                               

 

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.

 

 

 

 

 


 

k.       Procurement (Services) Contract –

St. Lawrence/FDR Project –

                        Environmental Services Consultant – 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 Kleinschmidt Associates, P.A., P.C. (‘KA’) to provide consulting services in support of ongoing Federal Energy Regulatory Commission (‘FERC’) environmental commitments as part of the relicensing of the St. Lawrence/FDR Project.  The term of the contract will be for two years with an option to extend for one year.  The amount for which authorization is requested is $800,000.

 

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.

 

DISCUSSION

 

                FERC issued a New License for the St. Lawrence/FDR Project on October 23, 2003.  The Trustees accepted the New License at their meeting of November 25, 2003.  As part of the New License, the Authority is required to construct ten Habitat Improvement Projects (‘HIPs’), perform a substantial rehabilitation of the Wilson Hill Wildlife Management Area (‘WHWMA’) and provide safe passage for migrating American eel.

 

                Substantial progress has been made in fulfilling these commitments; however there are three large projects currently being completed at Nichols Hill Island, Little Sucker Brook and in the WHWMA.   Further, several of the smaller HIPs that require providing additional opportunities for Osprey and Common Tern nesting and Sturgeon spawning remain to be completed.  The Authority has fulfilled its commitments to provide upstream passage for American eel, but continues to partner with other agencies to research and develop a solution to provide for safe passage of out-migrating American eel.

 

                To fulfill ongoing environmental relicensing commitments, on July 17, 2013 the Authority issued a Request for Proposal (‘RFP’) (Q13-5503JF) for the above services, including placement of a notice in the New York State Contract Reporter.  Proposals were received from two firms:  Kleinschmidt Associates and Barton & Loguidice, P.C. (‘BL’).

 

                Staff from the Authority’s Relicensing and Implementation and Procurement groups evaluated the proposals for technical qualifications and pricing.  The KA team was judged superior in several technical areas.  Because KA was the successful bidder in a previous competitive bidding process for the subject services, they have firsthand knowledge of the development and design of the St. Lawrence/FDR Project HIPs and experience in assisting the Authority with obtaining the regulatory permits for their construction.  The KA proposal demonstrated a clearer understanding of the tasks being undertaken in this project and working with the Authority. 

 

 Although the hourly rates for each bidder were comparable, the KA proposal provided a precise delineation of the tasks to be performed and their associated costs to be completed.  The company’s familiarity with the tasks and the technical ability of its proposed subcontractors provided a level of assurance to the evaluation team that the proposed costs were reasonable and reliable.

 

                The competing bidder, BL, did not provide itemized costs for the tasks as the company is not currently familiar with the projects.  BL did not propose an approach or cost estimate of how the development of a working knowledge of the ongoing projects would be addressed.  The evaluation team concluded that the amount of time and effort required to develop a working knowledge of the projects posed a risk and the overall costs would ultimately be significantly higher than KA’s. 

 

FISCAL INFORMATION

 

Since these expenditures are related to the relicensing of the St. Lawrence/FDR Project, they will be treated, generally, as capital expenses and payments will be made from the Capital Fund.  As some of these tasks are transitioning from implementation to an operational mode, a small amount (~20%) will be funded from budgeted O&M funds.

 

RECOMMENDATION

 

The Vice President – Project Development and Licensing, the Vice President – Procurement and the Director – Relicensing and Implementation recommend that the Trustees authorize the award of a contract to Kleinschmidt Associates P.A., P.C. for $800,000 to provide environmental consulting services in support of fulfilling commitments of the New License for the St. Lawrence/FDR Project.

 

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.”

 

                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 contract to Kleinschmidt Associates P.A., P.C. for two years, with an option to extend for one year, in the amount of $800,000, to provide consulting services in support of fulfilling environmental commitments of the New License for the St. Lawrence/FDR Project, as recommended in the foregoing report of the President and Chief Executive Officer;

 

Contractor                                           Contract Approval

 

Kleinschmidt Associates P.A., P.C.                        $800,000

                               

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.

 


 

l.         Procurement (Services) Contracts –

                        Business Units and Facilities –

                        Awards, Extensions and/or 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 ‘2l-A,’ as well as the continuation of the procurement (services) contracts listed in Exhibit ‘2l-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 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 $55,000 to $3 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 ‘2l-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 ‘2l-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:

Business Services

 

Energy Risk Assessment and Control

 

                The Authority’s Enterprise Risk Management program (‘ERM program’) provides a coordinated approach to identifying, assessing and managing risks across the organization, in the areas of finance, as well as infrastructure, operational reliability, safety, workforce management, customer and legal and regulatory compliance.  The Authority enlisted the services of risk management consultants to assist with program implementation and to advise staff on various risk-related matters, as needed.  The Authority’s Risk Management group now plans to further develop and mature the ERM program, with the continued assistance of such consultants, to support activities that include, but are not limited to: review of governance, corporate culture and communication materials; recommendations for incident response initiatives; identification, assessment, modeling and quantification of key risks; defining the process and development of risk tolerances and thresholds; and development of key risk mitigation strategies.  Staff also intends to advance the Authority’s Energy Commodity and Credit Risk Management program, with continued consulting support for tasks involving risk modeling and quantification, credit risk evaluation and energy derivative fair market valuation and/or validation.  Since the existing competitively bid contracts for such services are expiring at the end of 2013, and the need for these services is ongoing, staff developed a new Request for Quotations (‘RFQ’ No. Q13-5471).  Bid documents were downloaded electronically from the Authority’s Procurement website by 78 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Eight proposals were received and evaluated.  A thorough technical review of the proposals, as more fully discussed in the Award Recommendation documents, indicated that no single firm was fully responsive to all requirements set forth in the RFQ.  A number of firms demonstrated specific expertise, experience, skills, strengths and qualifications in different areas that complement each other and, which taken as a whole, would provide the Authority with the ability to award specific well-defined tasks to the best-qualified firm that can complete each task most efficiently and at competitive rates.  Based on the foregoing, staff recommends the award of contracts to the following five firms: The Brattle Group, Inc. (‘Brattle’), Deloitte & Touche LLP (‘Deloitte’), KEMA, Inc. (‘KEMA’), PA Consulting Group, Inc. (‘PA Consulting’) and RMG Financial Consulting, Inc. (‘RMG’) (PO#s TBA), which meet the bid requirements and are the most technically qualified to provide such risk management consulting services, on an ‘as needed’ basis.  Additionally, some of these firms have provided satisfactory services under existing contracts for such work.  The new contracts would become effective on or about January 1, 2014 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 contracts, $3 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.

 


 

Energy Resource Management

 

Fuel Operations

 

                The contract with Saybolt LP (‘Saybolt’) (PO# TBA) would provide for independent petroleum inspection and other related services in connection with the delivery, transfer and storage of various types of distillate fuel oil within the New York Harbor and Long Island areas.  Such services include, but are not limited to, the inspection, measurement and testing of bulk oil deliveries and transfers made via barge, tanker, pipeline or truck to the Authority’s electric generating stations and/or oil storage facilities situated within the aforementioned areas for the Richard M. Flynn, 500 MW and Astoria Energy II power plants.  The resulting data on oil quantity and quality provides the basis for both paying for oil delivered and assessing penalties for non-conforming oil, as well as for providing evidence of compliance with environmental quality regulations.  Since the existing contract for such services expires at the end of the year, and the need for such services is ongoing, staff developed a new Request for Proposals (QFS-2013-03).  Bids were solicited from seven firms, including those that may have responded to a notice in the New York State Contract Reporter.  Five proposals were received and evaluated.  Based on each firm’s unit pricing for the required services and forecasted demand / projected usage, staff calculated the total costs for providing such services (including a mixture of delivery modes and quantities for each mode of delivery or activity) for each of the bidders.  Based on the foregoing and as further set forth in the Award Recommendation documents, staff recommends the award of a contract to Saybolt, the lowest-priced evaluated bidder, which is qualified to perform the services, is fully responsive to the Authority’s bid requirements and has provided satisfactory services under an existing contract for such work.  The new contract would become effective on or about January 1, 2014 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, $55,000.

 

Enterprise Shared Services

 

Human Resources

 

                The Authority provides a comprehensive benefits program to its employees and retirees, and retains the services of a benefits consultant to review and analyze its current program, recommend alternative benefits design in response to emerging plan costs or benefits practices, perform the requisite actuarial testing and valuations, and ensure the program is in compliance with federal and state laws and regulations.  The contract with Buck Consultants LLC (‘Buck’) (Q13-5442; PO# TBA) would provide for such benefits consulting and actuarial  services to assist the Authority in the following areas: compliance, health care reform / benefits plan design and cost management, Request for Proposals (‘RFP’) process for health care plans, retiree benefits reporting and additional consulting services, as needed.  Specific tasks / services include, but are not limited to: providing expert guidance on legislation and regulations that impact the Authority’s retirement savings and health plans to ensure that our plans are in compliance with all applicable laws; conducting required annual coverage and nondiscrimination testing for the Authority’s dependent care flexible spending account and providing an annual actuarial attestation regarding prescription drug coverage for Authority retirees; assisting Authority staff with formulating a benefits action plan to respond to health care reform mandates and to determine their financial impact on the Authority; analyzing and evaluating the costs and funding of various plans and options; managing the RFP process for health care plans, including RFP preparation and bid evaluation and analysis; preparing biennial actuarial valuations / reports of retiree benefits (Other Post-Employment Benefits other than pensions, ‘OPEB’),  in accordance with Governmental Accounting Standards Board (‘GASB’) requirements, and additional consulting services for emergent issues, on an ‘as needed’ basis.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 78 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated, as further set forth in the Award Recommendation documents.  Staff recommends the award of a contract to Buck, the lowest-priced bidder, which is qualified to provide such services, meets the bid requirements and has performed satisfactory services under a prior contract for such work.  The new contract would become effective on or about October 1, 2013 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, $530,000.

 

Information Technology

 

                The contract with Ricoh USA, Inc. (‘Ricoh’) (Q13-5457; PO# TBA) would provide for maintenance services for approximately 135 departmental class Multi-Function Devices (‘MFDs’) that provide Managed Print Services (‘MPS,’ including document printing, copying, scanning and faxing) to support business functions at the Authority’s offices and facilities, as well as a dedicated on-site service manager in the White Plains Office.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 29 firms, including those that may have responded to a notice in the New York State Contract Reporter.  One proposal was received and evaluated.  Reasons provided by some of the other firms that did not submit a proposal include, but are not limited to, they are not an authorized Ricoh dealer and therefore lack access to replacement parts and cannot service Ricoh MFDs or they downloaded the bid documents for information purposes only.  As the original equipment manufacturer of the vast majority of the Authority’s MFDs, Ricoh is uniquely qualified to provide such maintenance services, replacement parts and on-site support services for this equipment, including fully integrated software for MFD and MPS tracking and analysis for maintenance and management reporting.  Additionally, Ricoh is an authorized service provider for several other major manufacturers of such equipment also covered under this contract.  Based on the foregoing, as well as its reasonable pricing, staff recommends the award of a contract to Ricoh, which is technically qualified to perform such work, meets the bid requirements and has provided satisfactory services under the existing contract for such work.  Based on past utilization history and usage projections, staff recommends that the contract be funded for a total of $1.1 million.  The new contract would become effective on or about October 1, 2013 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, $1.1 million.

 

 

Operations - Support Services and - Power Generation

 

                The contract with Applied Ecological Services, Inc. (‘AES’) (Q13-5470; PO# TBA) would provide for planting services in connection with the Frog Island Wetland Restoration Habitat Improvement Project (Phase II), as part of the implementation of the New License and associated Settlement Agreement commitments for the Niagara Power Project.  Services include all labor and services, supervision, materials and equipment necessary to perform the work, as set forth in the bid documents.  The planting contractor will supply (cultivate or procure) the specified plant species for subsequent installation of the plant material, including plants in shrub, plug and tuber form, within a newly restored wetland area in the upper Niagara River known as Frog Island.  Since some of the native plant species may not be readily available, it is anticipated that such plants will need to be procured or cultivated well in advance of the scheduled planting periods, expected to be between May and July of 2014 and 2015, respectively.  (It should be noted that the restoration of Frog Island (Phase I -- dredging and excavation work) is currently in progress; such work is being performed by another contractor under a separate competitively bid contract, as approved by the Trustees at their meeting of May 21, 2013.)  Bid documents for Phase II services were developed by staff and were downloaded electronically from the Authority’s Procurement website by 31 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 the award of a contract to AES, the lower-priced bidder, which is qualified to perform such services, fully meets the bid requirements, has demonstrated relevant experience and a thorough understanding of the work scope, and has provided satisfactory service under prior and existing contracts for such work.  The new contract would become effective on or about October 1, 2013 for an intended term of up to two years and three months, 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, $542,505.  It should be noted that AES’s proposed supplier of all plant material for this project, including herbaceous plants, riparian shrubs and submerged aquatic vegetation, is located in New York State and is a New York State-certified Women-owned Business Enterprise (‘WBE’).

       

                The contract with BRG Machinery Consulting (‘BRG’) (Q13-5466; PO# TBA) would provide for consulting services to support all major rotating machinery and the Nuovo Pignone centrifugal gas compressors at the Authority’s plants in the Southeastern New York (‘SENY’) region.  Such services include, but are not limited to, providing highly specialized technical expertise on- and off-site, as needed, during scheduled periodic maintenance of such equipment (performed by another contractor under a separate competitively bid contract), as well as troubleshooting, making recommendations, diagnosing and resolving or repairing equipment failures on an emergency or other ‘as needed’ basis.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 38 firms, including those that may have responded to a notice in the New York State Contract Reporter; one proposal was received and evaluated.  Reasons why some of the other firms did not submit a proposal include, but are not limited to, their key personnel / expertise were unavailable at this time, it was not their scope of work or they downloaded the bid documents for information purposes only.  Based on its strong analytical expertise and technology coupled with practical experience, staff recommends award of a contract to BRG, the technically qualified bidder, which is capable of performing the work, compliant with the bid requirements and has provided satisfactory services under previous contracts for such work.  The new contract would become effective on or about October 1, 2013 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, $450,000.

 

                In 2001, the Authority initiated a project with the Electric Power Research Institute (‘EPRI’) to utilize acoustic emissions for the detection of electrical / thermal fault sources within transformers at various Authority facilities and locations.  Since the project’s inception, 12 Authority transformers have been tested employing this technology.  Valuable condition assessment / evaluation reports, generated from the data obtained via this method of monitoring, have provided important information for operational and maintenance decisions regarding these transformers, resulting in greater reliability and safety.  Since some faults within a transformer may not be revealed during short-term monitoring, the Authority is now pursuing a five-year contract to allow for the application of this technology and long-term monitoring over an extended timeframe.  The proposed contract with MISTRAS Group, Inc. (‘MISTRAS’) (Q13-5462; PO# TBA) would provide for such monitoring and analysis of acoustic emission data on transformers, reactors and other power system equipment to identify and locate the source of abnormal electrical behavior within such equipment.  Services also include, but are not limited to, installation and use of leased instrumentation / equipment to conduct such testing, as well as system maintenance, data downloading and analysis, and preparation of monthly and final reports including recommendations for maintenance solutions.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 28 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Based primarily on its experience utilizing acoustic emission technology on large power apparatus, and as further set forth in the Award Recommendation documents, staff recommends the award of a contract to MISTRAS, the technically qualified bidder that fully meets the bid requirements and technical specification, has demonstrated extensive relevant work experience within the electrical utility industry, and has provided satisfactory service under previous contracts for such work.  The new contract would become effective on or about January 1, 2014 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, $300,000.

 

                The contract with Quintal Contracting Corp. (‘Quintal’) (RFQ 6000140180; PO# TBA) would provide for algae removal and disposal services for the Richard M. Flynn Power Plant.  Services include the removal (scraping) of algae buildup from the bottom and sides of the North and South Reinjection Basins (on an ‘as needed’ basis, approximately seven times per year) and the addition of duct bank material (coarse sand) to the bottom of the basins to maintain basin depth within 12 inches of the top of the water inlet vault, as well as the removal of all such excavated material and proper disposal off-site.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 26 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 the award of a contract to Quintal, the lower-priced bidder, which is qualified to perform such work, meets the bid requirements and has provided satisfactory services under an existing contract for such work.  The new contract would become effective on or about October 1, 2013 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, $200,000.  It should be noted that Quintal is a Small Business Enterprise.

 

 

Contract Extensions:

Enterprise Shared Services

Information Technology

                At their meeting of September 28, 2010, the Trustees approved the award of competitively bid contracts to a maximum of twelve prequalified firms to provide for the services of specialized SAP temporary programming personnel, on an ‘as needed’ basis, for an intended term of up to two years, in the aggregate amount of $3 million.  Staff indicated that contracts would only be awarded to those firms that successfully placed a candidate and all such contracts would expire on the same date, regardless of their duration.  Contracts have been awarded to four of the prequalified firms: BayForce Technology Solutions, Inc. (‘BayForce’) (4600002707), Carlyle Consulting Services, Inc. (‘Carlyle’) (4600002705), Mitchell / Martin, Inc. (4600002335) and Sapta Global, Inc. dba Zen4IT (‘Sapta’) (4600002367).  An extension of services through September 30, 2013 was authorized in accordance with the Authority’s Guidelines for Procurement Contracts and Expenditure Authorization Procedures.  These services have been rebid and an evaluation of the proposals received in response to the Authority’s Request for Quotations is in progress.  Staff now requests a three-month extension of the subject contracts through December 31, 2013 to allow sufficient time to complete a thorough evaluation process; the Trustees’ approval for the new awards will be sought at the December meeting.  The current aggregate ‘Target Value’ allocated to date is $957,800 (of the originally approved $3 million); there is sufficient funding to cover services provided during the extended term.  The Trustees are requested to approve a three-month extension of the subject contracts, with no additional funding requested.  It should be noted that Sapta Global is a New York State-certified Minority and Women-owned Business Enterprise (‘M/WBE’).

 

 

Operations Support Services

Project Management

                At their meeting of January 23, 2013, the Trustees approved the award of competitively bid contracts to three firms, CH2M HILL, Inc. (‘CH2M’) (4600002626), CHA Consulting, Inc. (‘CHA’) (4600002640) and RCM Technologies, Inc. (‘RCM’) (4600002627), to provide for on-call engineering, project and construction management services to support the Authority’s Transmission Life Extension and Modernization (‘T-LEM’) program and various other projects at Authority facilities throughout the state as needed, for a term of up to five years, in the initial aggregate total award amount of $10 million.  T-LEM is a multiyear program that will upgrade the Authority’s existing transmission system to maintain availability, increase reliability and ensure regulatory compliance.  The Program, which encompasses Authority transmission assets in the Central, Northern and Western regions, has been divided into several projects, including:  upgrades, refurbishments and replacements associated with switchyards and substations; transmission line structures or towers and associated hardware, including tower painting; replacement of the submarine cable on PV-20; and work along rights-of-way, including access roads.  The work scope is a result of internal and external assessments and recommendations.  Funding is requested in a tiered approach for each project as the complete plan of work is developed.  Based on equipment condition and senior management’s decision to accelerate switchyard equipment replacements associated with T-LEM, additional support from the aforementioned firms is now required.  The additional engineering and project management services will supplement the Authority’s existing resources and ensure the proper implementation of T-LEM.  Based on the foregoing, staff recommends that additional funding in the amount of $10 million be approved.  The current aggregate ‘Target Value’ is $10 million.  The Trustees are requested to approve the additional funding requested for the subject contracts, thereby increasing the aggregate total amount to $20 million, in accordance with the aforementioned tiered approach.  Total commitments and expenditures for these contracts will continue to be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures, including travel and living expenses.

 


 

FISCAL INFORMATION

                Funds required to support contract services for various Business Units/Departments and Facilities have been included in the 2013 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.

RECOMMENDATION

                The Senior Vice President – Enterprise Shared Services, the Senior Vice President – Operations Support Services and Chief Engineer, the Senior Vice President – Power  Generation, the Senior Vice President – Energy Resource Management, the Senior Vice President and Chief Risk Officer, the Vice President – Project Management, the Vice President – Engineering, the Vice President – Environment, Health and Safety, the Vice President – Procurement, the Vice President – Information Technology and Chief Information Officer, the Vice President – Project Development, Licensing and Compliance, the Vice President – Human Resources, the Director – Asset and Maintenance Management, the Regional Manager – Northern New York, the Regional Manager – Western New York, the Regional Manager – Central 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 ‘2l-A’ and the extension and/or funding of the procurement (services) contracts listed in Exhibit ‘2l-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 with Trustee LeChase being recused from the vote as it pertains to CHA Consulting, Inc.

 

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 “2l-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 “2l-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.


 

Discussion Agenda:

 

3.                   Report of the President and Chief Executive Officer

 

a.                   Corporate Performance

                President Quiniones welcomed the Trustees to the Niagara Project.  He stated that his report would include the summary of the reports of the Chief Operating Officer, Chief Financial Officer, and the Chief Risk Officer, after which, the Trustees can ask questions on the respective reports.  He said a panel of Authority staff will summarize all of the activities by the Authority in Western New York.  Also, Mr. Robert Lurie, Senior Vice President of Strategic Planning, will provide a progress report on the Authority’s strategic planning process, after which the Trustees can engage in dialogue with him and the executive management team on its content.  President Quiniones continued that based on the Performance Scorecard, the Authority is doing extremely well, to date.

Responding to a question from Chairman Koelmel, President Quiniones said the Authority continues to address the transmission system reliability which result, as indicated in the Performance Scorecard, is a function of the failure of one of the Authority’s lines that connects Westchester to Long Island.  He said although it remains in the performance metrics, the Authority is still ahead of its performance.

Summary of Summer Events

President Quiniones highlighted some of the events during summer 2013 as follows:

1.       The Authority issued its Sustainability Report which outlined the Authority’s progress with the thirty-nine (39) specific actions outlined in the original Report issued in 2010. 

2.       As required by Legislation, the Authority issued its Report on Energy Efficiency in Schools;

3.       The Authority issued its Build Smart NY Benchmarking Report which creates the baseline on energy performance on all state-owned buildings under Build Smart NY.

4.       ALCOA conducted the ground-breaking of its East Plant in Massena, NY;

5.       The Authority celebrated the 40th anniversary of the operations at the Blenheim-Gilboa Plant;

6.       President Quiniones attended the 75th anniversary celebration of GM's Tonawanda Engine Plant.

 

b.                   Operations Report

President Quiniones said the Authority did extremely well in July and August and this trend continues year-to-date. He said the failure of the Y-49 transmission line affected the performance metrics, but, overall, operationally, including environmental and safety, the Authority is trending positively and doing well. 

c.                    Financial Report

President Quiniones said financially, the Authority is ahead of its budget with Net Income $43 million higher than the budget.  The year-end projections remain above the budget and this is due in large part to higher capacity and energy prices in the market.  He continued that, as outlined in Mr. Concadoro's mid-year financial report, the Balance Sheet and liquidity are very strong.  He ended by saying that, from a financial perspective, all the key indicators are showing positive performance.

d.                   Enterprise Risk Report

President Quiniones said the utility industry is changing and enterprise risk will be very important as a result of those changes.  He said enterprise risk will be very important during this time and the utilities have to adapt to these changes.  To that end, the Authority will incorporate enterprise risk in all aspects of its operations, both operationally and financially, and the Trustees will be provided with updates and reports on its enterprise risk.

 

In response to a question from Chairman Koelmel, President Quiniones said optimization of the Authority’s position of strength both operationally and financially is part of the core focus of the Authority’s strategic planning process which will be completed by the end of the year. Also, the Trustees will be provided an update on the process prior to its completion.  Responding to further questioning from Chairman Koelmel, Mr. Russak said the year 2014 is projected to be a positive year for the Authority financially.  He said the areas that drive the Authority’s earnings are performing well. Gas prices are expected to continue to be low and this will translate into low energy prices, which will benefit customers.  There is a firming up on the capacity market side and this trend is expected to continue next year.  He continued that there has been an increase in the amount of water available during the course of this year, another positive sign, and this will further support the solid position of the Authority.  Mr. Russak also said the Authority does have opposing issues, for example the HTP project and the residential discounts for the Recharge New York program; however, those payments are handled well within the construct of the Authority’s financial picture.  Responding to further questioning from Chairman Koelmel, Mr. Russak said the Authority is in the process of developing its proposed four-year plan and O&M Budget for 2014 which will be presented to the Trustees for consideration at the meeting in December.

                In response to a question from Chairman Koelmel, Mr. Welz said the Authority is aggressively investing in its infrastructure.  The Operations Business Unit is proposing an increase in its capital budget for 2014 over 2013 and is working with Finance in order to manage its very significant budget.

                Responding to a question from Trustee Flynn, Mr. Welz said the Authority is making significant investments at the Niagara Project.  Some of the investments include a $460 million Life Extension and Modernization (“LEM”) Program at Lewiston -- the first of 12 units to be overhauled has just been successfully completed; LEM of 13 units at the Robert Moses Plant; and a preliminary investment of replacing the control systems at the Moses Plant.  In response to further questioning from Trustee Flynn, Mr. Welz said the Authority uses a significant amount of local contractors and labor in the area for its projects, for example the dam face project; upgrade of the switchyard breakers at Niagara and modernization of the road at Niagara University.  President Quiniones added that as industry regulations change, it will be necessary for the Authority to make its assets more reliable.  Therefore, as part of its long-term view of investing capital into its assets, by upgrading the Authority’s power plants, such as LPGP, the Authority will actually increase the efficiency of the plants, and by upgrading the controls, add the flexibility required to support the integration of more variable resources into the entire system. 

Responding to a question from Trustee Nicandri, Mr. Welz said that since Mr. Francois’ promotion as Regional manager at the Niagara Project he has made management changes with the staffing.  He has also identified projects that can be undertaken by the internal workforce instead of by contractors, adding to the Authority’s productivity.  He continued that with regard to staffing, although the Authority conducts internal training of its staff, it has been very successful in employing qualified people from outside, when necessary.  He added that more trouble-shooters are needed on staff and, to that end, they are now in the process of developing this skill set internally.


 

4.                   Power Allocations:

 

a.       Power Allocations Under the Recharge New York Program

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

               

The Trustees are requested to approve an allocation of Recharge New York (‘RNY’) Power available for ‘expansion’ purposes to Corning Incorporated (‘Corning’) as listed in Exhibit ‘4a-A.’  This action was recommended by the Economic Development Power Allocation Board (‘EDPAB’) at its July 22, 2013 meeting.

               

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’).  The program makes available 910 megawatts (‘MW’) of ‘RNY Power,’ 50% of which will be provided by the Authority’s hydropower resources and 50% of which will be procured by the Authority from other sources.  RNY Power contracts can be for a term of up to seven years in exchange for job and capital investment commitments.

 

                RNY Power is available to businesses and not-for-profit corporations for job retention and business expansion and attraction purposes.  Specifically, Chapter 60 provides that at least 350 MW of RNY Power shall be dedicated to facilities in the service territories served by the New York State Electric and Gas, National Grid and Rochester Gas and Electric utility companies; at least 200 MW of RNY Power shall be dedicated to the purpose of attracting new businesses and encouraging expansion of existing businesses statewide; and up to 100 MW shall be dedicated for eligible not-for-profit corporations and eligible small businesses statewide.

 

        The basic application for the RNY Power Program was approved by EDPAB at its meeting on September 26, 2011.  Applications for RNY Power are subject to a competitive evaluation process and are evaluated based on the following criteria set forth in the statutes providing for the RNY Power Program (the ‘RNY Statutes’):

 

‘(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, the applications are scored and ranked.  Evaluations also consider input provided by the relevant Regional Economic Development Council under the third and eighth criteria. 

 

                In arriving at recommendations for RNY Power for EDPAB’s consideration, staff, among other things, attempted to maximize the economic benefits of low-cost NYPA hydropower, the critical state asset at the core of the RNY Power Program, while attempting to ensure that each recipient receives a meaningful RNY Power allocation.

 

RNY Power allocations have been awarded by the Trustees on six prior occasions – in April, June, September and December of 2012, and March and July of this year.  There is currently 38.1 MW of unallocated RNY Power of the 710 MW available for business ‘retention’ purposes.  Of that 710 MW retention block, 100 MW was set aside for not-for-profit corporations and small businesses, of which 5.4 MW is available to allocate to such entities.  Lastly, there is 140.9 MW of unallocated RNY Power of the 200 MW available for business ‘expansion’ purposes.  These figures include allocations that were awarded, modified, declined and/or withdrawn prior to today’s recommendation.

 

DISCUSSION

 

At its July 22, 2013 meeting, EDPAB recommended that a 6,300 kW RNY Power allocation (expansion-based) be made to Corning to support a proposed business expansion as described in the company’s application for RNY.  The recommended allocation would be for a term of seven years.  At its July 23, 2013 meeting, the Trustees were unable to act on the recommendation due to the lack of a quorum resulting from a potential conflict of interest raised by one or more Board members.  This item brings EDPAB’s original recommendation back to the Trustees for approval.

 

Applications for the expansion-based RNY Power are scored based on the statutory criteria, albeit with a focus on information regarding each applicant’s specific project to expand or create their new facility or business (e.g., the expansion project’s cost, associated job creation, and new electric load due to the expansion).  Corning has proposed to invest $260 million of capital to expand business operations while creating 250 new jobs above a base employment level of 500 employees at its Addison, Steuben County facility.  The company requested 9,000 kW of RNY Power to serve the estimated new electric load that the expansion project would create.

 

                The recommended 6,300 kW expansion-related allocation as listed in Exhibit ‘4a-A’ is intended to provide approximately 70% of the individual expansion project’s estimated new electric load, consistent with previously approved expansion-based RNY Power allocations.  Because the recommended amount is based on new electric load estimates, and to ensure that an applicant’s overestimation of the amount needed would not cause that applicant to receive a higher proportion of RNY Power to new load, the allocation is recommended on an ‘up to’ amount basis.   In addition to other commitments, Corning, like all previous RNY expansion-based awardees, would be required to add the new electric load as stated in its application, and would be allowed to use up to the amount of their RNY Power allocation in the same proportion of the RNY Power allocation to the requested load as stated in Exhibit ‘4a-A.’

 

Recommendation

 

The Manager – Business Power Allocations and Compliance recommends that the Trustees approve an allocation of 6,300 kW of RNY Power for expansion purposes to Corning Incorporated as listed in Exhibit ‘4a-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 with Trustee LeChase being recused from the vote.

 

WHEREAS, the Economic Development Power Allocation Board (“EDPAB”) has recommended that the Authority approve a Recharge New York (“RNY”) Power allocation for expansion purposes to Corning Incorporated as described in Exhibit “4a-A”;

 

NOW THEREFORE BE IT RESOLVED, That the Authority hereby authorizes an allocation of RNY Power for expansion purposes to Corning Incorporated in accordance with the terms described in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the 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.

 


 

b.       Allocation of Hydropower and Notice of Public Hearing      

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to approve an allocation of available hydropower totaling 4,000 kilowatts (‘kW’) to Alita USA Holdings, Inc. (‘Alita’) as further described herein and in Exhibit ‘4b-A.’  This allocation will support capital expansion valued at more than $101.85 million and the creation of 172 jobs.  The Trustees are also requested to authorize a public hearing pursuant to Public Authorities Law (‘PAL’) §1009 on the proposed direct sale contract for the allocation to Alita, the current form of which is attached as Exhibit ‘4b-B.’

 

BACKGROUND

 

In summary, under PAL §1005(13), the Authority may contract to allocate up to 250 megawatts (‘MW’) of firm hydroelectric power as Expansion Power (‘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 PAL §1005(13)(a).  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 (‘ESD’), the Buffalo Niagara Enterprise, the Niagara County Center for Economic Development and Erie County Industrial Development Agency (‘ECIDA’) to coordinate other economic development incentives that may help bring projects to New York State.  Staff confers with these entities to help maximize the value of hydropower to improve the economy of WNY and the State of New York.  The following recommendation has been discussed with each of these entities and each has expressed support for the proposed recommendation.

 

At this time, there is 6,895 kW of unallocated EP and 38,053 kW of unallocated RP available for eligible businesses under the criteria set forth in PAL §1005(13)(a).

 

DISCUSSION

               

                Alita USA Holdings, Inc.

 

Alita is a start-up company out of Dubai that plans to build a high frequency, electric resistance weld oil country tubular goods pipe mill.  Alita has narrowed its list of potential locations for this mill to a vacant industrial site in Buffalo, and another in Houston, a location being considered due to its proximity to potential customers. 

 

Alita has submitted an application requesting 6.5 MW of hydropower with a proposal to construct a 324,000-square-foot pipe mill and a 16,000-square-foot facility dedicated to a lab, storage and an office area on Rittling Boulevard in Buffalo.  Once fully operational in the summer of 2015, Alita would operate three shifts at four separate production centers at its mill with the goal of producing 150,000 tons of pipes annually.  It should be noted that while Alita’s application requests 6.5 MW, it also indicates that when the mill is fully operational the maximum amount of power it would use is 5 MW.  

 

Alita would commit to creating 172 new jobs, of which 157 positions would be located at the new pipe mill and 15 more located either on site or elsewhere in New York State, as a result of this project and proposed allocation.  The calculated job creation ratio for 157 new jobs in Western New York and a 4 MW proposed allocation is 39 jobs per MW.  This ratio is above the historic average of 18.6 new jobs per MW for the last four years.  The total capital investment of $101.85 million committed by Alita would result in a capital investment ratio of $25.4 million per MW.  This ratio is above the four-year historic average of $20.8 million per MW.

 

Because the majority of Alita’s potential customers are located closer to Houston, Alita estimates that locating the mill in Buffalo would add approximately $9 million annually to its shipping and logistical costs.  A low- cost hydropower allocation could help offset some of this expense and make this project much more financially palatable.

 

ESD, ECIDA and other state and local agencies are contributing to an incentive package to Alita in support of this project. 

 

                In summary, staff recommends that a RP allocation totaling 4,000 kW be awarded to Alita in exchange for a total of $101.85 million of capital investment and the creation of 172 new jobs.  The recommendation is described in Exhibit ‘4b-A’ showing, among other things, the amount of power requested by the applicant, the recommended allocation amount, and the applicant’s proposed commitment to job creation and capital investment.  Additional information on the project is contained in the application summary attached as Exhibit ‘4b-A-1.’

 

CONTRACT INFORMATION

 

                The Authority is in the process of discussing the proposed contract with Alita and anticipates receiving customer approval of a contract form substantially similar to that attached as Exhibit ‘4b-B.’  Accordingly, the Trustees are requested to authorize a public hearing pursuant to PAL §1009 on the contract form attached as Exhibit ‘4b-B.’ 

 

                As required by PAL §1009, when the Authority believes it has reached agreement with its prospective co-party on a contract for the sale of EP or RP, it will transmit the proposed form of contract to the Governor and other elected officials, and hold a public hearing on the contract.  At least 30-days’ notice of the hearing must be given by publication once in each week during such period in each of six selected newspapers.  Following the public hearing, the form of contract may be modified, if advisable.  Upon approval of the final proposed contract by the Authority, the Authority must ‘report’ the proposed contract, along with its recommendations and the public hearing records, to the Governor and other elected officials.  Upon approval by the Governor, the Authority may execute the contract.

 

                The general form of the proposed contract is consistent with recently approved contracts for the sale of EP and RP.  Some pertinent provisions of the proposed form of contract include the provision for direct billing of all production charges (i.e., demand and energy) as well as all New York Independent System Operator, Inc. (‘NYISO’) charges, plus taxes or any other required assessments, all as set forth in the Authority’s Service Tariff No. WNY-1.  The proposed form of contract would also include (i) commercially reasonable provisions relating to financial security to reflect a direct billing arrangement between the Authority and its EP/RP customers, and (ii) provisions authorizing data transfers and addressing other utility-driven requirements which are necessary for efficient program implementation.  Such provisions have been used in other Authority contracts forms, including the Authority’s Recharge New York Power Program contracts.

 

                As is typical, the provision of electric service for this hydropower allocation is subject to enforceable employment and usage commitments.  The standard contract form includes annual job reporting requirements and a job compliance threshold of 90%.  Should Alita’s actual jobs reported fall below the compliance threshold, the Authority has the right to reduce the allocation on a pro-rata basis.  We anticipate that the allocation would be sold to Alita pursuant to the Authority’s Service Tariff No. WNY-1, which applies to all allocations of EP and RP commencing July 1, 2013.  Transmission and delivery service for this allocation would be provided by National Grid in accordance with its Public Service Commission-filed service tariffs.

               

RECOMMENDATION

 

The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the allocation of Replacement Power totaling 4,000 kW to Alita USA Holdings, Inc. as detailed in Exhibit ‘4b-A.’  It is also recommended that the Trustees authorize the Corporate Secretary to convene a public hearing on the form of the proposed contract finally negotiated with this company, the current form of which is attached as Exhibit ‘4b-B,’ and transmit copies of such proposed form of contract to the Governor and legislative leaders pursuant to PAL §1009.  Staff will report to the Board of Trustees on the public hearing and the contract and at that time make additional recommendations regarding the proposed contract.

 

                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 an allocation totaling 4,000 kW of Authority hydropower to Alita USA Holdings, Inc. (“Alita”) as detailed in Exhibit “4b-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 Trustees hereby authorize a public hearing on the terms of the proposed form of direct sale contract for the sale of hydropower and energy finally negotiated with Alita (the “Contract”), subject to rates previously approved by the Trustees; and be it further

 

RESOLVED, That the Corporate Secretary be, and hereby is, authorized to transmit copies of the proposed Contract to the Governor, the Speaker of the Assembly, the Minority Leader of the Assembly, the Chairman of the Assembly 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 Public Authorities Law (“PAL”) §1009; and be it further

 

RESOLVED, That the Corporate Secretary be, and hereby is, authorized to arrange for the publication of a notice of public hearing in six newspapers throughout the State, all done in accordance with the provisions of PAL §1009 of the Public Authorities Law; 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.        Hydropower Allocation – Contract Extension

                to Citigroup Technology, Inc.                              

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to approve a five-year extension of the 1,100 kW allocation of Replacement Power (‘RP’) and associated contract previously provided to Citigroup Technology, Inc. (‘Citigroup’), whose current direct sale contract for the sale of hydropower expires September 30, 2013.

 

BACKGROUND

 

Under PAL §1005(13), the Authority may allocate and sell directly or by sale for resale, 250 MW of Expansion Power (‘EP’) and 445 MW of RP to businesses located within 30 miles of the Niagara Power Project, provided that the amount of EP allocated to businesses in Chautauqua County on January 1, 1987 shall continue to be allocated in such county.

 

Since the late 1980s, the Authority’s sales of EP and RP had been handled almost exclusively under contracts that the Authority entered into with Niagara Mohawk Power Corporation d/b/a National Grid (‘National Grid’) and New York State Electric and Gas Corporation (‘NYSEG’), both of which facilitated the provision of Authority hydropower to end-use customers on a sale-for-resale basis.  These contractual arrangements expired on June 30, 2013, and the Authority has made arrangements to continue the sale of the EP and RP allocations under a direct sale contract with each of the customers having remaining or extended terms beyond June 30, 2013. 

 

On January 30, 2007, the Trustees awarded Citigroup an allocation of RP to support an expansion plan that would create 500 jobs in Amherst, New York.  Citigroup constructed, via a third-party developer, a 150,000 square-foot facility at 580 Cross Point Parkway in Amherst at a cost of more than $35 million.  The expansion created 500 new jobs with an average salary in excess of $45,000.  The RP allocation was awarded for a term of five years and electric service commenced October 1, 2007 upon completion of the facility.

 

Citigroup did not receive a long-term contract extension, having declined the offer made as part of the Authority’s Western New York contract extension initiative in 2010.  Because the allocation’s original term extends beyond the June 30, 2013 expiration of the sale-for-resale arrangements with the local utility, Citigroup received a direct sale contract to finish the remaining term of the allocation.  The new direct sale contract, set to expire September 30, 2013, received all necessary authorizations earlier this year pursuant to PAL §1009, including a public hearing on April 25th, Trustee approval at their May 21st meeting, and approval by the Governor on June 28, 2013.

 

DISCUSSION

 

                Citigroup has formally requested an extension of the RP allocation beyond the September 30, 2013 expiration date.  The company stated that the Amherst operations continue to be very cost-effective and that a key component of the continued cost effectiveness of the Amherst operations is the 1,100 kW of RP awarded by the Authority.  The company maintains that continuance of this benefit upon the expiration of Citigroup’s current agreement, September 30, 2013, is critical to maintaining the attractiveness of Amherst as a low-cost center for Citigroup’s operations. 

 

As a condition of the extension of Citigroup’s RP allocation, the customer is willing to commit to maintaining the 500 jobs created as a result of the construction of the 580 Cross Point Parkway facility.  Additionally, the customer will commit to making additional capital investments of at least $7,500 per year at the leased facility.

 

Staff has evaluated the request for an extension including comparing Citigroup’s commitment to maintain 500 employees and to continue investing in the Amherst facility to the commitments made by other hydropower customers during the Western New York contract extension initiative.  Additionally, staff reviewed the recently Trustee-approved allocation extensions to three customers in similar circumstances.  Citigroup has a history of contract compliance having created and maintained the 500 employment level through the initial term of the award.  Staff recommends the Trustees approve a five-year extension to the 1,100 kW RP allocation to Citigroup as detailed in Exhibit ‘4c-A.’

 

RECOMMENDATION

               

The Manager – Business Power Allocations and Compliance recommends that the Trustees approve a five-year extension to the term of Citigroup Technology, Inc.’s 1,100 kW Replacement Power allocation and associated contract as described in Exhibit ‘4c-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.”

 

            Mr. Michael Huvane provided highlights of staff’s recommendation to the Trustees. In response to a question from Trustee Foster, Mr. Huvane said the general approach recommending extensions such as this is to make sure the company is still a substantial player in the community from an economic perspective; that it is compliant with its job commitment and continue to invest in its facility.  He said Citigroup’s facility is leased, so it is not expected that the company will do a lot of investment at the facility; however, this is one of the many back offices that has recently been located to Western New York.  Staff generally recommends the extension for this type of operation as long as the company was committing to jobs and makes a positive contribution to the local economy.

                In response to a question from Trustee Nicandri, Mr. Huvane said the Authority is hopeful that Citigroup will continue to develop this Data Center in Western New York.  However, if and when the Authority can leverage Citigroup for additional investment and job growth, it will. 

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

 

RESOLVED, That the Trustees hereby authorize the extension of the direct sale contract for the sale of hydropower and energy generated by the New York Power Authority for Citigroup Technology, Inc. for a term of five years, subject to rates previously approved by the Trustees; 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.

 

 

5.                   Awards of Fund Benefits from the Western New York

Economic Development Fund Recommended by the

Western New York Power Proceeds Allocation Board

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

               

The Trustees are requested to accept the recommendations of the Western New York Power Proceeds Allocation Board (‘WNYPPAB’) and approve the award of Fund Benefits from the Western New York Economic Development Fund to the eligible applicants, Field & Fork Network, Global Outreach Mission, Inc.,Michigan Street African American Heritage Corridor Commission, Inc., and the Aquarium of Niagara listed in Exhibit ‘5-A,’ and authorize the other actions described herein with respect to such applicants and awards.

 

For informational purposes, Exhibit ‘5-B’ lists: (1) projects and applicants the WNYPPAB has determined are ineligible for Fund Benefits; (2) projects the WNYPPAB has determined are not being recommended for an award of Fund Benefits; (3) applications that have been withdrawn; (4) applications that were deferred for future consideration; and (5) projects that have been preliminarily recommended for an award of Fund Benefits but which are not being forwarded to the Board at this time pending a determination of whether the projects must satisfy additional legal requirements before an award decision can be made by the Trustees.

               

BACKGROUND

 

1.       Western New York Power Proceeds Allocation Act

 

On March 30, 2012, Governor Cuomo signed into law the Western New York Power Proceeds Allocation Act (the ‘Act’).  The Act provides for the creation, by the Authority, of the Western New York Economic Development Fund.  The Fund consists of the aggregate excess of revenues received by the Authority from the sale of Expansion Power (‘EP’) and Replacement Power (‘RP’) produced at the Niagara Power 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 EP or RP customer under the applicable tariff or contract.

 

                Under the Act, an ‘eligible applicant’ is a private business, including a not-for-profit corporation.  ‘Eligible projects’ is defined to mean ‘economic development projects by eligible applicants that are physically located within the State of New York within a thirty-mile radius of the Niagara power project located in Lewiston, New York that will support the growth of business in the state and thereby lead to the creation or maintenance of jobs and tax revenues for the state and local governments.’  Eligible projects include, for example, capital investments in buildings, equipment, and associated infrastructure owned by an eligible applicant for fund benefits; transportation projects under state or federally approved plans; the acquisition of land needed for infrastructure; research and development where the results of such research and development will directly benefit New York state; support for tourism and marketing and advertising efforts for western New York state tourism and business; and energy-related projects.

 

Eligible projects do not include public interest advertising or advocacy; lobbying; the support or opposition of any candidate for public office; the support or opposition to any public issue; legal fees related to litigation of any kind; expenses related to administrative proceedings before state or local agencies; or retail businesses as defined by the board, including without limitation, sports venues, gaming and gambling or entertainment-related establishments, residential properties, or places of overnight accommodation.

 

Fund Benefits have been provided to successful eligible applicants in the form of grants.  It is anticipated that Fund Benefits will be disbursed as reimbursement for expenses incurred by an Eligible Applicant for an Eligible Project.   

 

At least 15% percent of Fund Benefits must be dedicated to eligible projects which are ‘energy-related projects, programs and services,’ which is ‘energy efficiency projects and services, clean energy technology projects and services, and high performance and sustainable building programs and services, and the construction, installation and/or operation of facilities or equipment done in connection with any such projects, programs or services.’

 

Allocations of Fund Benefits may only be made on the basis of moneys that have been deposited in the Fund.  No award may encumber future funds that have been received but not deposited in the Fund.

 

2.       Western New York Power Proceeds Allocation Board

 

Under the Act, the WNYPPAB is charged with soliciting applications for Fund Benefits, reviewing applications, making eligibility determinations, and evaluating the merits of applications for Fund Benefits.  WNYPPAB uses the criteria applicable to EP, RP and PP, and for revitalization of industry as provided in Public Authorities Law §1005.  Additionally, WNYPPAB is authorized to consider the extent to which an award of Fund Benefits is consistent with the strategies and priorities of the Regional Economic Development Council having responsibility for the region in which an eligible project is proposed.  A copy of these criteria (collectively, ‘Program Criteria’), adapted from WNYPPAB’s ‘Procedures for the Review of Applications for Fund Benefits,’ is attached as Exhibit ‘5-C.’

 

The WNYPPAB met on March 4, 2013 and, in accordance with the Act, adopted by-laws, operating procedures, guidelines related to the application, and a form of application.  At that time, WNYPPAB defined ‘retail business’ to mean 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.

 

WNYPPAB also designated the Western New York Regional Director of Empire State Development Corporation (‘ESD’) to be its designee (‘Designee’) to act on its behalf on all administrative matters.  Among other things, the Designee was authorized to preform analyses of the applications for Fund Benefits and make recommendations to WNYPPAB on the applications. 

 

3.       Application Process

 

                In an effort to provide for the efficient review of applications and disbursement of Fund Benefits, the WNYPPAB established a series of application due dates coupled with a schedule of dates through the end of 2013 on which the WNYPPAB would meet to consider applications.  In addition, the application process was promoted through a media release and with assistance from state and local entities, including the Western New York and Finger Lakes Regional Economic Development Councils, the Empire State Development Corporation and other local and regional economic development organizations within the State.  A webpage was created that is hosted on WWW.NYPA.GOV/WNYPPAB with application instructions, a link to the approved application form and other program details including a contact phone number and email address staffed by the Western New York Empire State Development regional office.  Additionally, ESD and NYPA hosted a meeting on June 25, 2013 in Buffalo with a plethora of Western NY economic development agencies to further educate them on the Fund and how they can continue to market the Fund to their constituents. 

                               

As of July 2, 2013, the third application due date, the WNYPPAB had received 16 applications seeking more than $18 million in Fund Benefits.  WNYPPAB’s staff analyzed the applications and made recommendations to WNYPPAB concerning each of the applications based on eligibility requirements and Program Criteria.  Copies of the recommendations from WNYPPAB staff to the WNYPPAB can be found in ‘Exhibit ‘5-D.’ 

 

At its September 10, 2013 meeting, the WNYPPAB took the following actions on applications for Fund Benefits:

 

1.        Recommendations for Awards of Fund Benefits

 

The WNYPPAB is recommending to the Trustees that the applications listed on Exhibit ‘5-A,’ each receive an award of Fund Benefits in the amount indicated.  The applicants have indicated that the proposed projects would directly create or retain approximately 71 jobs in Western New York.  The total to be expended on the proposed projects is expected to exceed $5.8M.  These are the recommendations that are presently before the Trustees for consideration.

 

2.       Other Determinations

 

For your information, Exhibit ‘5-B’ lists: (1) projects and applicants the WNYPPAB has determined are ineligible for Fund Benefits; (2) projects the WNYPPAB has determined are not being recommended for an award of Fund Benefits; (3) applications that have been withdrawn; (4) applications that were deferred for future consideration; and (5) projects that have been preliminarily recommended for an award of Fund Benefits but which are not being forwarded to the Board at this time pending a determination of whether the projects must satisfy additional legal requirements, such as review under the State Environmental Quality Review Act (‘SEQRA’), before an award decision is made by the Trustees.   The Authority is subject to SEQRA.  Under SEQRA, the Authority must review the environmental impacts of projects that it funds, approves or undertakes which change the use or appearance of any natural resource or structure, as well as planning activities that commit the Authority to a future course of action.   The Authority’s decision to award Fund Benefits to an ‘eligible applicant’ is often an action subject to SEQRA.   As such, the Authority must review each application to determine if it is subject to SEQRA and, if so, what must be done in order to comply with SEQRA. 

 

This information is being provided to the Trustees for their information only.  No action by the Trustees is required with respect to these matters. With respect to projects that have received recommendations for awards, but which have not yet been forwarded to the Trustees for action (item (5) above), WNYPPAB staff will keep NYPA apprised on the determinations and the status of the underlying projects.

 

DISCUSSION

 

Under the Act, a recommendation for Fund Benefits by WNYPPAB is a prerequisite to an award of Fund Benefits by the Authority, and the Act authorizes the Authority to award Fund Benefits to an applicant upon a recommendation of the WNYPPAB.  Upon a showing of good cause, the Authority has discretion as to whether to adopt the WNYPPAB’s recommendation, or to award benefits in a different amount or on different terms and conditions than proposed by the WNYPPAB.  In addition, the Authority is authorized to include within the contract covering an award (‘Award Contract’) such other terms and conditions the Authority deems appropriate.

 

Given the nascent stage of the proposed projects, it was not possible at this time to identify all of the terms and conditions that would be applicable to each award and memorialized in an Award Contract.  With the Trustees’ authorization, it is anticipated that the Authority, in consultation with ESD, will negotiate final terms and conditions with successful applicants after receipt of more detailed information concerning the projects and proposed schedules.  In addition to appropriate business terms, staff anticipates that Award Contracts will contain provisions for periodic audits of the successful applicant for the purpose of determining contract and program compliance, and where appropriate, terms providing for the partial or complete recapture of Fund Benefits disbursements if the applicant fails to maintain agreed-upon commitments, relating to, among other things, employment levels and/or project element due dates. 

 

Recommendation

 

The Vice President, Marketing recommends that:

 

(1)     the Trustees accept the recommendations of the WNYPPAB and make awards of Fund Benefits to the applicants and in the amounts listed in Exhibit ‘5-A,’ conditioned upon an agreement to be negotiated with each applicant on the final terms and conditions that would be applicable to each award to be contained in an Award Contract approved by the President and Chief Executive Officer and approved by the Executive Vice President and General Counsel as to form;

 

(2)     the Senior Vice President – Economic Development and Energy Efficiency, or his designee(s), in consultation with ESD, be authorized to negotiate with the applicants concerning such final terms and conditions that will be applicable to the awards; and

 

(3)     the Senior Vice President – Economic Development and Energy Efficiency, or his designee, be authorized to execute on behalf of the Authority Award Contracts for each of the awards listed on Exhibit ‘5-A’ subject to the forgoing conditions.

 

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 provided highlights of staff’s recommendation to the Trustees.  In response to a question from Trustee Nicandri, Mr. Huvane said the African American Heritage Corridor Commission is a historic corridor in Western New York which is responsible for the restoration of some of the landmark buildings in the area. The goal is to make this one of the major inner city attractions for tourism in the area. 

In response to a question from Chairman Koelmel, Mr. Huvane said the Trustees are not authorized to approve any application relative to grants until the State Environmental Quality Review Act (“SEQRA”) requirements are met.  Staff is evaluating the companies listed in Exhibit “5-B” titled “Applications being recommended for an award but not transmitted to NYPA” to ensure that the SEQRA requirements are met before recommending them to the Board for approval.  Responding to further questioning from Chairman Koelmel, Mr. Huvane said  the SEQRA process is now included in the initial evaluations of applications and, providing there are no time sensitive issues with the companies listed in Exhibit “B,” staff will bring them to the Board in December for approval.

Responding to a question from Trustee Nicandri, Ms. McCarthy said an agency in the state of New York would be the lead agency for SEQRA review of the grants; that agency will provide a notice to the Authority when it is completed.  She said no final action will be taken by the Authority until all environmental reviews are completed.  The WNYPPAB will recommend that the NYPA Board make awards from the fund; however, that recommendation is contingent upon SEQRA review, if necessary, and the other requirements.  After the WNYPPAB makes a recommendation, Authority staff holds it in abeyance and will not bring it to the NYPA Board for approval until all concerns are satisfied and staff can assure the NYPA Board that there are no issues with the project.

Responding to a question from Chairman Koelmel, Mr. Huvane said the aquarium project indirectly stimulates jobs.  He said Niagara Falls gets more than six million visitors per year and the aquarium would get only a small portion of those tourists.  They hope to make this a world class destination; so, in addition to the recent investment in the state park, it is anticipated that this investment will create a world class environment in Niagara Falls.

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

 

                WHEREAS, the Western New York Power Proceeds Allocation Board (“WNYPPAB”) has recommended that the Authority make awards of Fund Benefits from the Western New York Economic Development Fund (“Fund”) to the eligible applicants listed in Exhibit “5-A”;

 

                NOW THEREFORE BE IT RESOLVED, That the Authority hereby accepts the recommendations of the WNYPPAB and authorizes the awards of Fund Benefits to the applicants and in the amounts listed in Exhibit “5-A,” conditioned upon an agreement between the Authority and each applicant on the final terms and conditions that would be applicable to each award and set forth in a written award contract (“Award Contract”) between the Authority and each applicant approved by the President and Chief Executive Officer and approved by the Executive Vice President and General Counsel as to form; and be it further

 

                RESOLVED, That the Senior Vice President – Economic Development and Energy Efficiency, or his designee, in consultation with the Empire State Development Corporation, is authorized to negotiate with successful applicants concerning such final terms and conditions that will be applicable to the awards; and be it further

 

                RESOLVED, That the Senior Vice President – Economic Development and Energy Efficiency, or his designee, is authorized to execute on behalf of the Authority Award Contracts for each of the awards listed on Exhibit “5-A” subject to the forgoing conditions; 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.

 

 

 


 

6.                   Charge NY Program – Expenditure Authorization and Contract Award

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

The Trustees are requested to authorize up to $15 million over a five-year term to implement the Charge NY Program (‘Charge NY’ or the ‘Program’).  Charge NY would fund electric vehicle charging station deployment and research, outreach and education projects.  The program would be developed in support of the Governor’s Charge NY Program announced in his 2013 State of the State Address.  Program funding will be used for the installation of electric vehicle charging stations at state and local government sites, a pilot deployment of state of the art rapid chargers, and for public education and research programs related to electric vehicles and their interactions with the grid.  The Trustees are also requested to authorize the first contract award under this new program to EV Connect, Inc. of Los Angeles, CA in the amount of $1,568,108 for the installation of charging stations in 100 parking spaces throughout New York State.

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 mission includes the supply of clean, economical, reliable and safe energy while promoting energy efficiency and innovation for the benefit of its customers and all New Yorkers.  The Authority has worked to help the State reach the  goals of Executive Order No. 111 (which requires agencies to reduce energy consumption while transitioning to renewable energy sources) and ‘45x15’ (which aims for 45% of the State’s electricity needs to be met through improved energy efficiency and renewable sources by 2015).  In that regard, the Authority has provided energy services projects throughout New York State resulting in nearly $139 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. 

The Authority has also played a role in developing and expanding electric vehicle technology in New York State.  These efforts started in 1995, resulting in the placement of over 1,200 electric vehicles in government fleets.  These vehicles have driven over eleven million miles in total and have benefited the people of New York by improving air quality, reducing greenhouse gases and minimizing the use of imported fossil fuels.  In partnership with the Electric Power Research Institute, the Authority has engaged the major automakers in the development of new vehicle technologies such as the plug-in hybrid drivetrain and the standardization of vehicle charging hardware.

The 2013 State of the State Address included the Charge NY program, which goal is to expand the market for electric vehicles from government fleets to the general public.  The Program is designed to play an integral role by targeting the issues where the vehicles and the utility grid interact.  By clarifying and optimizing these issues early in the development of the technology, the Program will establish New York as a technology leader in this important emerging market.


 

DISCUSSION

 

The Charge NY Program requires $50 million in funding to meet these goals.  The plan outlines roles for the New York Public Service Commission (‘PSC’), the Investor-Owned Utilities (‘IOUs’), New York State Energy and Research Development Authority (‘NYSERDA’) and the Authority.  The PSC has been requested to review regulatory issues and electric rates that can incentivize the use of electric vehicles by consumers and the IOUs has been requested to provide $30 million in funding for electric vehicle incentive programs.  NYSERDA allocated funding of $5 million for the existing research efforts including local permitting issues and the early rollouts of public charging station installations.  The Authority has been requested to fund $15 million of the Program, consisting primarily of charging station installations throughout the State.  These installations will be at state and local government sites and will address the electric charging needs of the general public and government employees. 

 

If authorized by the Trustees, the Charge NY Program would consist of a non-recoverable fund of up to $15 million to be available for expenditures over a five-year period commencing September 24, 2013.  The funding would enable research and project activity in four main areas: public and workplace charging station deployment; rapid charging equipment deployment; charging equipment research and development; and public outreach efforts. 

 

The first area, public and workplace charging station deployment, would engage state and local government sites to host $10 million in electric vehicle charging equipment funded by the Authority.  Some sites, such as train stations, municipal parking lots and airports, would have charging stations available for use by the general public.  Other sites, such as State University campuses, may have charging stations installed in their employee parking lots for use by faculty and staff.  These sites will be selected through a competitive solicitation seeking state and local government entities, non-profit colleges and the Authority’s energy customers interested in hosting electric vehicle charging stations on their property.

 

The second area, rapid charging equipment deployment, will target a limited number of sites to host state-of-the-art hardware capable of charging a vehicle battery in minutes instead of hours.  Possible host sites would be airports and highway rest stops.  Funding allocated for this second area would be $2.5 million.

 

The third area, charging equipment research and development, will consist of technical studies, analysis and demonstrations of new charging technologies.  Smart metering and battery swapping are two possible technologies for study.  Funding allocated for this third area would be $1.5 million.

 

The last area, public outreach and education, would endeavor to raise awareness of the technology among members of the general public.  Studies have shown that the majority of individuals are unaware or ill-informed about electric vehicles, their costs and perceived limitations.  An educational campaign targeting the Authority’s municipal and rural cooperative utility customers will be developed.  Funding allocated for this final area would be $1 million.

 

The Trustees are also requested to authorize the first contract award under this new program to deploy electric vehicle chargers at public locations.  In March 2012, the Authority was awarded a grant of $989,920 from NYSERDA to install electric vehicle chargers at public locations, such as commuter railroad parking lots.   Subsequently, Authority staff issued a Request for Proposals (‘RFP’) for the charging equipment, installation and maintenance service in March 2013 and received proposals in July 2013.  After completing their review of the proposals, Authority staff recommends an award of $1,568,108 be made to EV Connect, Inc.  The NYSERDA grant will be used to reimburse a portion of the Authority’s expenses in implementing this project.  Under this contract the vendor will install charging stations in 100 parking spaces throughout New York State.

 

The Charge NY Program will be conducted through an additional series of competitive solicitations, either independently or in collaboration with NYSERDA.  A steering committee will be formed within the Authority to review all competitive solicitations to be issued under the Program, as well as all resulting contract and grant award recommendations.  Additional Trustee authorization for contract awards will be sought according to the Authority’s expenditure authorization procedures.

 

Staff will coordinate with NYSERDA and other industry stakeholders to develop program priorities and share expertise and results.  Collaboration and additional co-funding will also be sought from the US Department of Energy, the Electric Power Research Institute, National Research Labs, and others, to secure additional research funding for New York.

 

FISCAL INFORMATION

The Charge NY Program will be funded from the Authority’s Operating Fund.  

RECOMMENDATION

The Senior Vice President – Strategic Planning recommends that the Trustees formally approve the Charge NY Program as described 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.”

 

Mr. John Markowitz provided highlights of staff’s recommendation to the Trustees.  Responding to a question from Trustee Foster, Mr. Markowitz said the charging equipment would be deployed to various public host sites; this funding is non-refundable, therefore the Authority will not be recovering any of the money.  Mr. Russak added that funding for this program was included in this year's budget and it is also part of the Authority’s four-year budget plan.  President Quiniones also added that the recommendation is for funding up to $15 million; if the growth rate of electric cars is not as anticipated, the Authority will not expend the funds.

                Responding to a question from Chairman Koelmel, Mr. Markowitz said the Authority has been tracking the registration of electric vehicles that would use these charging stations in the state.  The Authority anticipates that the Governor’s target of electric vehicles registrations of 40,000 within the five-year timeframe is realistic and supports the recommendation.  The Authority plans to launch the installations in phases and at each phase track the registration data.  Also, the Authority will be installing the charging equipment at host sites where there is a high concentration of electric cars.

                In response to further questioning from Trustee Foster, Mr. Markowitz said it is not the Authority’s intention to charge for the use of charging on the units; the host sites will be able to charge the end-user for using the equipment in order to recoup their electric cost.  In response to further questioning from Trustee Foster Mr. Markowitz said this is a traditional grant program and part of the Authority’s R&D efforts to expand this technology throughout the state.  The host site will contribute towards the cost of installing the equipment and the Authority would be donating the cost of the hardware.

Responding to still further questioning from Trustee Foster, President Quiniones said that part of the Authority’s role is to advance new technology in the state.  NYSERDA is also investing in this program which the Governor expects will be catalytic through its rate of adoption.   He said the rate of adoption is as projected by the Authority, and reiterated that the Authority is tracking this very closely so that it does not expend money ahead of the demand.

Responding to further questioning from Chairman Koelmel, President Quiniones said the Trustees can approve the request of $1.5 million and staff can make recommendations to the Trustees for additional funding on an ongoing basis. 

The Trustees agreed to amend the resolution authorizing the amount of up to $2 million of the $15 million Charge NY program.

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

 

WHEREAS, the Governor has announced the Charge NY Program to increase the adoption of electric vehicle technology among both government fleets and the general public of New York State; and

 

WHEREAS, the Authority has an extensive history of developing and implementing programs in the area of electric vehicle technology;

 

BE IT RESOLVED, That pursuant to the Authority’s Expenditure Authorization Procedures the Trustees hereby authorize up to $2 million in total available funds to be used for electric vehicle charging station deployment, rapid charger equipment deployment, charging station research and development, and public outreach and education, with such funds being utilized over a five-year period for the Charge NY Program as described 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, approval is hereby granted to award a contract to EV Connect, Inc.,  in the amount of $1,568,108, for the installation of charging stations throughout New York State; 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

   Fund                                        (not to exceed)                     Expires                 

 

Deployment Projects,

Research Studies, Public

Outreach Programs                  $2 million                        9/24/2018

 

 

 

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.

 

 

 

 


 

7.                   Informational Item: NYPA Benefits to Western New York

 

Chairman Koelmel said that at the Board’s request Mr. Harry Francois, Regional Manager of Western New York, Mr. Michael Huvane, Vice President of Marketing and Ms. Katherine Rougeux from the Strategic Planning department will make a presentation on the benefits the Authority provides to Western New York (“WNY”).

Mr. Harry Francois, provided a summary of some of the benefits that the Authority provides to Western New York as follows:

 

NYPA provides many direct and indirect benefits to the region including relicensing benefits, economic development power programs and other initiatives, energy efficiency, and many other projects and benefits.

 

Niagara Power Project

 

The Niagara Power Project is the largest electricity producer in New York State, generating 2.6 million kilowatts—enough power to light 26 million 100-watt bulbs at once. This low-cost electricity saves the state's residents and businesses millions of dollars per year.  In addition, approximately half of the project’s total power generation produced at the plant stays in the region.

 

NYPA is a major employer in the region, providing a direct economic impact through employing about 300 workers, with an annual payroll of more than $29 million at the Niagara Power Project.

 

In 2006, a $298 million upgrade and modernization at the Robert Moses Niagara Power Project was completed. This was a 15-year project to upgrade all 13 generators from 150 MW to 215 MW. As part of the upgrade, all 13 turbines were replaced and other improvements were made to generating equipment in the power dam, enabling the project to operate at maximum efficiency well into the 21st century. In 2012, the Authority began a $460 million, multi-year life extension and modernization of the Lewiston Pump-Generating Plant which is still underway.  In fact, the first unit has just been completed with eleven more to go.

 

Relicensing

 

As part of the federal relicensing process required in order to maintain operations of the Niagara Power Project, NYPA engaged the public to address local concerns. This process resulted in settlement agreements that reflect issues that are important to the stakeholder groups and include both license-related and non-license related commitments made by NYPA to provide benefits to the communities near the project. The total value of these relicensing benefits will be more than $1 billion for the 50-year license (which was granted in 2007) – as of August 2013, $217 million has been spent towards this commitment. Host communities – which include Niagara County, the City of Niagara Falls, the Town of Niagara, Town of Lewiston, and the Lewiston-Porter, Niagara Wheatfield and Niagara Falls school districts – received $250 million, and 28 megawatts of low-cost power.  Erie County and the City of Buffalo will receive $179 million as part of the relicensing agreement.  The Settlement Agreements provide hundreds of millions of dollars for capital improvements and economic development along with millions in savings from power allocations for these entities over the 50 year term of the license.

 


 

Additional relicensing benefits include 4 MW of low-cost power and more than $30 million allocated to the Tuscarora Nation and Niagara University.  Funding has been provided to Niagara University for capital investments in the campus, landscaping, and athletic field upgrades. Ecological improvements account for $48.2 million of funding in the region, in addition to the $450 million in support of the establishment of the Niagara River Greenway.  For example, one Habitat Improvement Project currently under construction is the Frog Island project, a $3.8 million project to restore 4 acres of historic wetland in the Niagara River to attract and benefit fish and wildlife.  Recreational enhancements account for an additional $18.6 million in spending in the region over the term of the license. Examples of recent recreational enhancements include the recently completed $6 million renovation and upgrade of Reservoir State Park featuring new and refurbished ball fields, basketball and tennis courts, and a new Winter Pavilion and ice rink.  Along the lower Niagara River, NYPA has enhanced a pair of outdated overlooks at the gorge rim and along the water’s edge that feature wonderful views of the Niagara Falls, and connected the two overlook sites with an award-winning stone stairway.

 

Mr. Michael Huvane provided highlights of the Authority’s Economic Development and Energy Efficiency efforts in Western New York as follows:

 

Western New York Economic Development Power Programs

 

More than one-third of the project’s output is tied to two low-cost power programs for businesses within a 30-mile radius of the Niagara Power Project, with a small amount set aside for businesses in nearby Chautauqua County, at a price that is currently more than 40 percent lower than wholesale market electricity in the region.  The 30-mile radius also covers a small piece of both Genesee and Orleans County

 

The hydropower programs, otherwise known as Expansion Power and Replacement Power, have allocations that are directly linked to roughly 30,000 jobs at 127 Niagara Frontier businesses.

 

In addition, most recently added to the Authority’s portfolio of economic development power programs is Recharge New York.  NYPA administers this statewide program and utilizes some of the Niagara project’s low-cost power as part of a mix of hydropower and market-purchased power.

 

Currently, 93 WNY companies have been awarded ~48 MW of Recharge NY power, supporting more than 27,000 jobs in the region.

 

Western New York Economic Development Fund

 

The Western New York Economic Development Fund is new and a very innovative way to assist economic development projects in WNY.  Essentially, the Authority uses the net earnings it receives from the marketplace from any unused Expansion or Replacement Power sold into the market at higher rates. Proceeds from the fund can be used to fund economic development projects within a 30-mile radius of the Niagara Power project. Prior to today’s action on the Fund, a total of $7 million was awarded by the NYPA Board to five businesses.  Approximately $23 million is now in escrow.

 

Niagara Economic Development Fund

NYPA Capitalized the Niagara Economic Development Fund (“NEDF”), providing low-interest loans to businesses locating or expanding in Niagara County. Currently, 13 loans have assisted 11 businesses in expanding and helped to create more than 650 jobs.  Some beneficiaries of the Fund are USA Niagara Development Corporation, the Niagara County Center for Economic Development and the Niagara Frontier Transportation Authority have been past beneficiaries.

 

It is important to note that NYPA has a strong working relationship with the Economic Development Professionals in WNY and enjoys being a part of the team.

 

Energy Efficiency

 

NYPA has robust Energy Efficiency Programs throughout the state.  Over the last two-and-a-half decades, NYPA has financed more than $95 million in completed energy efficiency and clean energy projects at 475 sites in Western New York. These improvements save taxpayers nearly $5.5 million per year and reduce greenhouse gas emissions by approximately 38,000 tons annually.

 

Some examples of NYPA’s energy efficiency efforts are:

 

·         Williamsville Central Schools: NYPA worked with this suburban school district for an energy-saving makeover at the district’s 13 elementary, middle and high schools.  Efficiency measures include new lighting, cooling, heating and ventilation upgrades and other measures to enhance comfort levels for the nearly 11,000-student body.

·         University at Buffalo: NYPA performed multiple phases of major energy efficiency upgrades throughout the campus. These improvements include ventilation and air-conditioning system upgrades, along with lighting retrofits and new and improved field lighting at University at Buffalo’s Stadium.

·         City of Niagara: NYPA is currently working with the City for a LED lighting upgrade at the Niagara Falls Veterans Memorial Monument.

 

Ms. Katherine Rougeux provided highlights of the Authority’s Economic Development and Energy Efficiency efforts in Western New York as follows:

 

The Power Authority marked its 50th anniversary at the Niagara Power Vista’s admission-free visitor’s center, hosting nearly seven million visitors from around the world since it opened in 1963. The Power Vista is proud to provide free family fun to area residents and tourists alike, seven days per week, year-round. Also, NYPA will to be hosting the annual Wildlife Festival this upcoming weekend.

 

Electric Vehicles

NYPA has also helped to make New York State a leader in electric-drive and clean transportation technologies, and to put more than 75 electric and hybrid-electric vehicles into service in Niagara and Erie counties at various public entities, including the City of Niagara Falls, the Town of Niagara, the Town of Grand Island, and Niagara Falls State Park. NYPA also utilizes approximately 24 electric vehicles and hybrids for use at the Niagara project.  These vehicles help improve air quality and reduce our carbon footprint.

 

Ice Boom Relocation

In recognition of the importance and significance of the Buffalo waterfront, NYPA enabled the creation of two new public waterfront parks.  NYPA relocated the site of its ice boom storage facility, previously stored on Buffalo’s Outer Harbor, to a new site two miles up the Buffalo River at 100 Katherine Street, in the Old First Ward of Buffalo.  NYPA invested nearly $24 million into the new ice boom storage facility and Mutual Riverfront Park. In addition, a New Outer Harbor Park – named Wilkeson Pointe - was created at the previous storage location.

 

Grain Elevators

 

NYPA also recently completed an extensive reconstruction effort on the connecting terminal grain elevators located at the First Buffalo River Marina along the Buffalo River.  NYPA implemented measures to protect and secure the elevators including stabilizing the structure and remediation work. NYPA relicensing funding is also enabling Erie Canal Harbor Development Corporation to move forward with a plan to illuminate and activate grain elevators and bridges to revitalize the Buffalo waterfront. This project is part of an effort to highlight Buffalo’s powerful industrial history and support future improvements along the waterfront.

 

 Maid of the Mist

 

NYPA has entered into an agreement between the Maid of the Mist, an iconic Western New York company, and the New York State Office of Parks, Recreation and Historic Preservation which will allow the company to stay in business, create and save jobs, and offer better access on the American side of Niagara Falls. NYPA is issuing permits after technical review and comment on the drawings and specifications, and is closely monitoring the construction of the facility at the former Schoellkopf Power Station No. 3 site, located only minutes away from the Falls.  November 2013 has been targeted as the completion date for a functional dry dock, with full completion and restoration expected in summer 2014.  Construction is progressing at the site - the crane needed to take the boats out of the water arrived at the site from Europe earlier this month, on track, to be able to begin operation by winter.  NYPA is the driving force behind the site’s historic preservation and interpretation. Schedule of interpretation of the site is still in the discussion phases, but will be a collaborative effort with local stakeholders, State Parks and the National Park Service.  The expectation is to have interpretive signage in place when the site reopens to the public in 2014.

 

Workforce Development

NYPA has undertaken an initiative in response to the Energy Highway recommendation to support workforce development for the energy industry and has partnered with Empire State Development as part of the Buffalo Billion strategy to support advanced manufacturing workforce training.  Both the energy and manufacturing industries are facing a high percentage of employees nearing retirement age and a deficiency of young members of the workforce – creating a need to hire and train an unprecedented number of new employees to fill the gaps.  NYPA has been working closely with Empire State Development, New York State electric utilities, local educational providers and labor organizations to formulate and implement a strategy to address the workforce development needs and challenges in Western New York.

 

 In response to a question from Trustee Foster, Mr. Russak said that as part of the relicensing settlement agreements, the Authority is providing $9 million per year to various parts of the Niagara Greenway over the course of the 50-year license.  Also, as part of the relicensing, the Authority has amended the Greenway agreement with the state parks in order to accelerate some of the investments to the park; as a result, the state parks are able to make a one-time investment instead of having to wait yearly for the funds.

Chairman Koelmel thanked staff for the presentations.  He said the Authority should continue to work on raising the level of clarity regarding what the Authority does in WNY with the goal of making others aware of the economic impact the Authority is making across the state.  President Quiniones agreed that the Authority should work on communicating to the people of Western New York the benefits it provides to the region. As an example, the major investments in the infrastructure of the Niagara Project also create jobs and stimulate economic activity in the region.  The Authority has also been fulfilling the significant commitments it made during the relicensing of the project.  The Authority has done a lot in terms of economic development, providing low-cost hydropower and Recharge New York power and energy efficiency initiative, and number of other projects that are being planned, for the counties, municipals, villages and towns all within the Governors economic development plans for the region.  He ended by saying that these significant activities need to be communicated within and outside the Authority and he will take it as a challenge to work on a plan to indicate how the Authority can better communicate this message.

 


 

8.                   Informational Item: Strategic Planning Process and Content

 

Mr. Robert Lurie provided an update of the status of the Authority’s strategic planning process and discussed some of the content and issues being studied and how they may affect the Authority in the future.

Strategic Planning Process

 

Mr. Lurie provided an overview of the timeline of the major steps in the strategic planning process which began in June.  He said during the summer, strategic planning staff did a scan of the Authority’s external business environment, focusing on the business drivers and trends that are affecting the state, its customers and the industry.  That scan was then inputted to the three off-site management planning sessions, the first of which took place on September 9 and 10, with the others to be completed in October.  Staff will then meet with the Trustees in November to review the content of the plan and make any revisions necessary.  Staff hopes to complete the draft plan by the end of December, and use the plan as the basis for the Business Unit planning in 2014.

 

The external scan included reports, surveys, and interviews with more than 30 stakeholders and experts.  The stakeholders include customers, state agencies, academics, think tanks, financial experts and other experts and NGOs.

 

NYPA’s senior management was also interviewed to get their views of the external and internal issues facing the Authority.

 

Staff is now engaged in management planning workshops as follows:

 

1.       The first workshop, “understanding the now,” was dedicated to understanding the current environment, trends affecting NYPA, and discussing its mission statement. 

2.       The second workshop will focus on the future, questioning “what are various scenarios of what the future might look like” and “what should the Authority’s goals be in shaping that future.”  Staff will be establishing quantifiable targets associated with those goals.

3.       The third workshop will focus entirely on the action plan, starting with identifying the key long-term risks and opportunities that can be agreed upon based on all the previous work.  From that basis, staff will decide on and prioritize strategies and projects that they want to propose to meet those long-term goals.

Several experts were invited to the first workshop.  The themes identified at the workshop include:

 

1.       The opportunity for NYPA, as it has in the past, to exercise a leadership role in helping the state navigate a future of great change in the energy industry, one that is likely to include many new energy technologies and choices for customers;

2.       The need for the grid to become more flexible, resilient, and connected in order to accommodate these new technologies and choices; and

3.       Talent management strategies which are changing across many industries, including the utility industry, due to the combination of pending retirements and much greater employee mobility and increasing retention challenges.

The themes were presented to the management team by a cross-functional group of NYPA employees, called the Core Team, who gathered the information from all of the external and internal sources and distilled it into themes and sub-themes to make it understandable.

 Of the themes identified, management discussed and agreed upon a top 10 list of trends that are likely to impact NYPA and its customers the most.  Some of these could be viewed as risks, some as opportunities, but most are both risks and opportunities. These include, but are not limited to:

 

·      The urgent issue of retirements and turnover among employees, which is creating the need for improved knowledge transfer and more strategic workforce planning;

·      System reliability which is increasingly threatened by factors including extreme weather, cyber-terrorism, and aging infrastructure;

·      Other trends which include the need for a smarter grid, increasing demand from customers for services that help them reduce the cost or increase the quality of their electric power, and the reduced availability of governmental resources for energy, requiring greater leveraging of private capital.

At the first workshop, staff also discussed NYPA’s mission, and worked to separate the “ends” NYPA is trying to achieve, versus the “means” of what it could do to accomplish those ends.  Both the ends and means are informed by NYPA’s enabling statute.

 

Among the “ends” discussed were: providing economic benefits to the citizens of New York State; fulfilling NYPA’s role as “stewards” of its energy and financial assets; and contributing to the achievement of NY State energy policy goals.

 

The means, as defined by the Authority’s statute, include providing low-cost power, expanding new clean energy technologies such as renewables that benefit the environment, and maintaining or increasing reliability of the system.

 

Mr. Lurie ended by saying staff has prioritized the drivers and trends that are likely to affect NYPA, its customers, and the state in the future and will focus on those trends at the other workshops.  Staff will then formulate goals and strategies that would provide tremendous benefits for the state and further NYPA’s legacy of building the energy infrastructure that New York will need in the 21st century.

 

                In response to a question from Trustee Foster, President Quiniones said the upgrades being undertaken at the Authority’s power plants will result in increased output; also, as part of the Governor’s Blueprint on the Energy Highway initiative, the Authority will participate in some of the energy initiatives which will benefit the state, consistent with its mission and the statutory requirements.

                In response to a question from Chairman Koelmel, Mr. Lurie said the top ten list of trends is intended to capture opportunities for the Authority to play leadership roles in the future of the transmission system and also in potential initiatives it could consider undertaking to make the grid more effective.  Responding to further questioning from Chairman Koelmel, President Quiniones said the Authority is viewed as one of the leaders in the utility industry, therefore, as part of its strategic planning process, the Authority will assess generational type projects that it can take the lead on that will benefit the state over time.

                Responding to a question from Trustee Nicandri, Mr. Lurie said because identifying risks that are part of the Enterprise Risk report and that of the strategic plan are an interactive process there is communication/feedback between Risk Management and the office of Strategic Planning.  They are in the early stages of developing the Enterprise Risk Management and Strategic Planning reports, and these will show how they integrate with each other.

Chairman Koelmel suggested, and it was agreed, that since the Authority collaborates with other agencies in its initiatives, Richard Kauffman, Chairman of Energy Policy, NYSERDA and the PSC be invited to a meeting of the Board as part of the discussions on the Authority’s strategic plan.


 

9.                   Appointment of Vice Chair of the Authority

 

The Chairman submitted the following report:

 

SUMMARY

 

                In accordance with Section 1004 of the Public Authorities Law (the ‘Power Authority Act’), the Trustees are requested to select Joanne M. Mahoney as Vice Chair of the Authority, effective immediately. 

 

DISCUSSION

 

                Section 1004 of the Power Authority Act, provides that the Trustees may select from their own, a Trustee to hold the position of Vice Chair of the Authority. 

 

RECOMMENDATIONS

 

                Based on her outstanding record of service, it is recommended that Joanne M. Mahoney be selected to fill the vacancy of Vice Chair created by the resignation of John S. Dyson. 

 

                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 Chairman, was unanimously adopted.

               

RESOLVED, That Joanne M. Mahoney of Syracuse, New York be, and is hereby selected as Vice Chair of the Power Authority of the State of New York, effective immediately.

 

 

 

 


 

10.                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 (d)(e) and (f) to discuss matters leading to the promotion or demotion of a particular person.  Upon motion made and seconded an Executive Session was held.

 


 

11.                Motion to Resume Meeting in Open Session

 

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


 

12.                  Next Meeting

 

The Regular Meeting of the Trustees will be held on December 17, 2013, 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

                Upon motion made and seconded, the meeting was adjourned by the Chairman at approximately 2:00 p.m.

 

 

Delince Signature

 

Karen Delince

Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                

 

 

 

 



[*]  Black’s Law Dictionary at p. 447 (9th ed. 2009).