ECONOMIC
DEVELOPMENT POWER
ALLOCATION
BOARD
MINUTES
December
14, 2004
Video
Conference – 10:00 a.m.
Louis
P. Ciminelli Construction,
1. Approval of the Minutes of the Meeting of November 23, 2004
2. Economic Development Plan for the Use of Industrial Incentive Awards
OTHER BUSINESS
3. Informational Item - Power for Jobs - Status of Approved
Applications and Summary of Action on Applications
4. Informational Item – Economic
Development Power - Status of
Approved Applications and
Summary of Action on Applications
5. Next Meeting
A regular meeting of the Economic Development
Power Allocation Board was held via video conference at the following
participating locations:
1)
2)
3) Louis
P. Ciminelli Construction,
The following Members of the
Board were present at the following locations:
Louis
P. Ciminelli, Chairman (
James
A. Duncan, Member (
Bernard P. McGarry, Member (
Kevin S. Corbett, Member – Excused
Also in attendance were:
David E. Blabey Executive
Vice President, Secretary and General Counsel, NYPA
Louise M. Morman Senior
Vice President – Marketing, Economic Development
& Supply Planning, NYPA
Gary Paslow Vice
President – Governmental Affairs & Policy Development
Thomas Warmath Vice President and Chief Risk
Officer, NYPA
James
H. Yates Vice
President – Major Account Marketing &
Economic Development, NYPA
Angela D. Graves Deputy
Secretary, NYPA
Joseph J. Carline Assistant
General Counsel – Power & Transmission, NYPA
John B. Hamor Executive
Director – State Governmental Relations, NYPA
James F. Pasquale Manager
– Business Power Allocations and Compliance, NYPA
Bonnie Fahey Executive
Administrative Assistant
Mary Jean Frank Associate Secretary, NYPA
Lorna M. Johnson Assistant Secretary, NYPA
Michael J. Santarcangelo Director, Policy, ESDC
Noelle Kinsch Attorney,
LeBoeuf, Lamb, Greene & MacRae
1. Adoption of Minutes
The minutes of the meeting of November 23, 2004, were unanimously
adopted.
2. Economic Development Plan for the Use of
Industrial Incentive Awards
The members of the Economic Development Power
Allocation Board (“Power Allocation Board”) are requested to approve an
Economic Development Plan (“Plan”) for 2004 submitted by the Power Authority of
the State of
BACKGROUND
Section 1005 of the Power Authority Act as amended directs the Authority to identify annually net revenues produced by the sale of Expansion Power, which is 250 MW of firm hydroelectric power generated at the Niagara Power Project allocated to businesses within 30 miles of the Niagara switchyard and in Chautauqua County. The Authority is further directed to identify an amount of such net revenues that will be used solely for industrial incentive awards. These awards are to be made in conformance with a Plan covering all such net revenues. Plans are to be submitted annually by the Authority to the Power Allocation Board and approved by the Power Allocation Board pursuant to the EDL.
Net revenues are defined by Section 1005 of the Power Authority Act as any excess of revenues properly allocated to the sales of Expansion Power over costs and expenses properly allocated to such sales.
In connection with approval of an application for power submitted on behalf of Chase Manhattan Bank, the Power Allocation Board approved a resolution on December 1, 1988 that concluded the available industrial incentive awards be used for the purpose of assisting Power Authority efforts to limit future Fitzpatrick production rate increases for all industrial, business and Economic Development Power customers of the plant. Further, the Board recommended that future Boards act affirmatively on any economic development plan submitted to them by the Authority to the extent it provides for such use of industrial incentive awards.
At their meeting of November 27, 2001, the Trustees of the Authority approved a five-year plan providing for the use of net revenues from the sale of Expansion Power that support the rates for business customers served under power programs associated with the Power Authority’s former James A. Fitzpatrick Nuclear Power Plant (the “Fitzpatrick Power Programs”). These programs include the High Load Factor, Economic Development and Municipal Distribution Agency power programs. The Power Allocation Board previously approved Plans submitted annually by the Authority for 1996 through 2000 that provided for such use of the net revenues. Through calendar year 2002, the Authority reported cumulative net revenues of $98,787,000.
DISCUSSION
The Authority last increased the rates for the Fitzpatrick Power Program customers, by an average of 5% effective January 1, 1993. There were no rate increases for the period 1994-99. Late in 1998, rates were lowered by 10% to Fitzpatrick Power Program customers that selected an Authority long-term contract option. The long-term contract option was selected by 87% of eligible customers.
In order to continue to serve Fitzpatrick Power Program
customers on a competitive basis consistent with the aim of the legislation
creating the Programs, the rates for these customers must be kept low enough to
be of sufficient economic incentive for industries to locate or expand in
In calendar year 2003, net revenues of $8,415,000 were produced from the sale of Expansion Power.
RECOMMENDATION
It is recommended that Power Allocation Board approve the Economic Development Plan submitted by the Authority which provides for the use of net revenues produced in 2003 from the sale of Expansion Power to support rates to Fitzpatrick Power Program customers as described herein.
The following resolution was unanimously adopted by members of the Board present.
WHEREAS,
Section 1005 of the Public Authorities Law authorizes the Power Authority of
the State of New York to identify an amount of the net revenues produced by the
sale of Expansion Power that will be used for industrial incentive awards; and
WHEREAS,
such industrial incentive awards must be made in conformance with an Economic
Development Plan submitted by the Authority and approved by the Board pursuant
to Section 188 of the Economic Development Law; and
WHEREAS,
the Board, on December 1, 1988, endorsed the use, to the extent necessary, of
available industrial incentive awards for the purpose of assisting Authority
efforts to limit future rate increases for Fitzpatrick Power Program customers;
and
WHEREAS,
the Board, on December 1, 1988, recommended that any future Economic Development
Plan submitted by the Authority be approved to the extent it provides for such
use of industrial incentive awards; and
WHEREAS,
the Authority approved a five-year Economic Development Plan for 2001 that provides
for the use of net revenues from the sale of Expansion Power to support rates
for Fitzpatrick Power Program customers and, further, authorized the submission
of such Plan to the Board for its approval;
NOW
THEREFORE BE IT RESOLVED, That the Board hereby determines that the Economic
Development Plan for 2003 submitted by the Authority and its implementation are
consistent with the criteria and requirements provided for in Sections 184 and
185 of the New York Economic Development Law and in Part 370 of Title 21 of the
Official Compilation of Codes, Rules and Regulations of the State of New York;
and be it further
RESOLVED,
That the Power Allocation Board hereby approves such Plan providing for the use
of net revenues from the sale of Expansion Power to support rates for
Fitzpatrick Power Program customers, in accordance with the foregoing
resolution.
3. Informational Item - Power for Jobs
- Status of Approved
See Exhibit “3-A”
4. Informational Item –
Economic Development Power - Status of
Approved Applications and
Summary of Action on Applications
See
Exhibit “4-A”
5. Next Meeting
The next meeting of the Board is to be
determined.