As the New York Power Authority observes its 75th anniversary, we continue to make extraordinary progress in working to achieve Governor George Pataki's vision for New York State of a reliable energy supply in harmony with the environment.

Perhaps our most notable accomplishment during 2005 was the start of operation of our new 500-megawatt combined-cycle power plant in Queens. The plant uses heat normally lost in the generating process to produce additional electricity, making it one of the cleanest and most efficient generating facilities in New York City.

Our ability to continue to provide abundant clean, renewable, low-cost electricity for New York State was strengthened in 2005 when we applied for a new 50-year federal license to operate the Niagara Power Project, New York's largest source of electricity. With Governor Pataki's support, we also reached an agreement on the hydropower project's relicensing with the City of Buffalo and Erie County, following an earlier agreement with the Niagara Power Coalition, a group of local governments and school districts near the project. In 2003 the Power Authority received a new 50-year operating license for our other major hydropower project, the St. Lawrence-Franklin D. Roosevelt Power Project in Massena. In 2005 we dedicated a new visitors center for that project, at Hawkins Point.

We concluded landmark long-term agreements in 2005 with all of our New York City governmental customers, ensuring continued deliveries of economical electricity. Under the terms, customers take an active part in implementing the contracts, participate in supply decisions and receive information on NYPA operations, including operating costs, plant operations, fuel costs, and electricity and gas hedging strategies.

In the area of clean transportation, the Power Authority continues to place electric-drive and hybrid-electric vehicles in our own fleet and with other agencies across the state, to demonstrate how improved air quality can be achieved through reduced vehicle emissions. We've now delivered about 800 vehicles, with more than 5 million miles driven, since our Clean Transportation Program began.

Under Governor Pataki's direction, we achieved the initial goals of our Clean School Bus Program, installing control devices to significantly cut harmful diesel emissions on up to 1,000 New York City school buses, and we're working to do even more.

The impact of Power Authority energy-efficiency programs continued to grow in 2005, as we installed more high-efficiency lighting, heating, air conditioning, motors and advanced control systems in public buildings across the state. Since the program's inception, we have completed work at more than 2,300 facilities, saving taxpayers $92 million in energy costs annually and avoiding 728,000 tons of greenhouse gas emissions each year.

NYPA is working to secure a LEED (Leadership in Energy and Environmental Design) certification from the United States Green Building Council for the Rappleyea Building, its White Plains headquarters, in 2006. The program recognizes high-performance "green" buildings that are energy-efficient, environmentally sound and healthier places to work. We are well-along on this project—in recent years we have invested $3.8 million in energy-efficiency upgrades, cutting energy consumption by 50 percent.

Our overall energy-efficiency efforts in 2005 included sponsorship with state agencies and others of two "energy expos," in the Tri-Lakes Region of the Adirondacks and in Buffalo, providing energy-saving tips and information to consumers.

NYPA's continuing work on new energy technologies includes combined heat and power (CHP), or cogeneration, which produces electricity and meets thermal energy needs (heat, hot water, steam, heating and cooling) simultaneously. CHP offers greater efficiency, reduced energy costs, decreased emissions and improved reliability. NYPA is pursuing CHP projects around the state, including fuel cells and the use of gases from landfills.

The theme of this Annual Report is how the Power Authority, taking pride in what we have accomplished during our first 75 years, plans to build on our history of innovation. We look forward to finding new and better ways to meet the energy needs of the people of New York State.