ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

MINUTES

June 28, 2005

Video Conference – 10:00 a.m.

            New York Power Authority Offices:

30 South Pearl Street, 10^th Floor, Albany, NY

123 Main Street, 16^th Floor, White Plains, NY

Louis P. Ciminelli Construction, 369 Franklin Street, Buffalo, NY

1.                    Approval of the Minutes of the Meeting of May 24, 2005

2.                    Power for Jobs Extended Benefits Recommendations for

Electricity Savings Reimbursements:

3.                      Transfer of Power – Name/Location Changes

4.                      Informational Item - New Legislation

OTHER BUSINESS

5.             Next Meeting

            A regular meeting of the Economic Development Power Allocation Board was held via video conference at the following participating locations:

1)       New York Power Authority, 30 South Pearl Street, Albany NY

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

3)       Louis P. Ciminelli Construction, 369 Franklin Street, Buffalo, NY

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

Louis P. Ciminelli, Chairman (White Plains, NY)

James A. Duncan, Member (Buffalo, NY)

Kevin S. Corbett, Member (New York, NY)

Bernard P. McGarry, Member (Excused)

Also in attendance were:

Eugene W. Zeltmann                           President and Chief Executive Officer

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

Joseph Leary                                        Director – SENY Public & Governmental Affairs, NYPA

James F. Pasquale                                Director – Business Power Allocations, Regulation and Billing, NYPA

Michael A. Saltzman                            Director – Public Relations, NYPA

Niko Ladopoulos                                 Legislative Liaison – Public & Governmental Affairs, NYPA

Anthony C. Savino                              Manager – Business Power Allocations & Compliance, NYPA

Bonnie Fahey                                       Executive Administrative Assistant, NYPA

Mary Jean Frank                                  Associate Secretary, NYPA

Lorna Johnson                                     Assistant Secretary, NYPA

Michael J. Santarcangelo                    Director - Energy Policy, ESDC

1.                   Adoption of Minutes

The minutes of the meeting of May 24, 2005, were unanimously adopted.

2.                   Power for Jobs Extended Benefits Recommendations
for Electricity Savings Reimbursements                                      

The members of the Board considered the 42 applications for electricity savings reimbursements and/or contract extensions listed below for Power for Jobs.  Mr. Pasquale explained that some 29,875 jobs would be impacted.  See Exhibit ‘2-A.’

                The following resolution was unanimously adopted by members of the Board present.

WHEREAS, the following entities have applied for electricity savings reimbursements under the Power for Jobs program:

NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such applications meet the requirements of the Power for Jobs legislation contained in Chapter 316 of the Laws of 1997; Chapter 386 of the Laws of 1998; Chapter 63 of the Laws of 2000; Chapter 226 of the Laws of 2002; and Chapter 59 of the Laws of 2004, would advance the public policy set forth in Section 189(i) of the Economic Development Law to provide effective incentives to promote economic development, maintain and develop jobs, and encourage new capital investment throughout New York State; and be it further

RESOLVED, That the Board recommends to the Power Authority of the State of New York the 42 applications for electricity savings reimbursements discussed herein totaling 32,624 kW until December 31, 2005.

3.                   Transfer of Power – Name/Location Changes

SUMMARY

                The members of the Economic Development Power Allocation Board (“Power Allocation Board”) are requested to recommend approval to changes to the companies as detailed below.  

BACKGROUND

                The Power Allocation Board is requested to approve the transfer of power allocations for seven existing customers that have changed names and/or locations for various business reasons.  The Power Allocation Board has approved transfers of this nature at past meetings.

DISCUSSION

                The proposed transferees are as follows:

                Agri-Link Foods, Inc.  (“ALF”) is a food-processing and marketing company in Fulton.  The company was approved for a 1,500 kW Power for Jobs (“PFJ”) allocation for 215 jobs by the Authority Trustees at their meeting of September 28, 1998.  In March 2005, ALF changed its name to Birds Eye Foods, Inc., with no change in ownership.  The company changed its name for marketing reasons in order to capitalize on the Birds Eye Foods name.  It will continue to operate out of its Fulton location and honor its existing job commitments.

                AIM Corrugated Container Corporation (“AIM”) is a manufacturer of corrugated boxes for packaging.  The company was approved for a 200 kW PFJ allocation for 86 jobs by the Authority Trustees at their meeting of January 25, 2000.  Norampac Industries Inc., a New York corporation, bought AIM’s assets.  Norampac will remain at the Lancaster facility and produce the same products, retaining the former employees of AIM and honoring the employment commitments made in the past.

                The American Craft Museum (“Museum”) located in Manhattan, presents solo and group exhibitions of American artists working in the craft media.  The Museum was initially approved for a 70 kW PFJ allocation for 36 jobs by the Authority Trustees at their meeting of May 25, 1999.  The Museum changed its name to the Museum of Arts & Design.  Ownership has not changed and it is still a non-profit organization.  The Museum believes the new name expresses the institution’s mission and commitment to craft media.  It will continue to honor all of the terms and conditions of its contract.

Hughes-Treitler Manufacturing Corp. (“Hughes-Treitler”) located in Garden City, makes heat exchangers for the defense and commercial aircraft industries.  The company was approved for a 1,000 kW PFJ allocation for 168 jobs by the Authority Trustees at their meeting of March 31, 1998.   Hughes-Treitler was recently acquired by AMETEK Aerospace and Defense, Inc. and will change its name to AMETEK Hughes-Treitler.  The company continues to operate in the same facility, has retained the same employees, and produces the same products.  AMETEK Hughes-Treitler agrees to honor all contract terms and conditions, including job commitments.

                Kraft Foods (“Kraft”), located in North Lawrence, produces cottage cheese and flavored yogurt products.  The company was approved for a 1,000 kW PFJ allocation for 140 jobs by the Authority Trustees at their meeting of September 28, 1998.  Coolbrands Dairy Inc., through their wholly owned subsidiary Integrated Brands, acquired certain Kraft assets and liabilities associated with the North Lawrence facility in March 2005.  Coolbrands will honor all the terms and conditions of the allocation agreement and continue to produce similar products at the facility.

                Power Pallet Inc. (“Power Pallet”) is a pallet-recycling company located in the Capital Region.  The company was allocated 250 kW of PFJ power for 65 jobs by the Authority Trustees at their meeting of April 27, 1999.  Power Pallet recently relocated from Schenectady to a larger facility in Amsterdam.  The new location gives Power Pallet the ability to expand its business and marketplace in an effort to grow and add more jobs in the future.  Power Pallet wishes to transfer the allocation to the new facility and agrees to honor all contract terms and conditions, including job commitments.

                Tartan Textiles Services, Inc. (“Tartan”) is a commercial laundry service located in Hempstead, Long Island.  The company was allocated 700 kW of EDP for 256 jobs by the Authority Trustees at their meeting of February 23, 1993.  Angelica Textile Services has acquired the laundry operations of Tartan as a result of a full-asset sale.  The company will continue the same type of business operations as Tartan and remain at the same location.  The new company will continue to honor the contract terms and conditions, including job commitments made by the prior owners.

RECOMMENDATION

      It is recommended that the Power Allocation Board approve the name and/or location changes detailed above.

                The members of the Board present approved the recommendation to changes to the companies as detailed above.

4.             Informational Item – New Legislation

                Mr. Paslow briefed the Board members on recent legislative developments. 

                On June 23^rd, both houses of the New York State Legislature approved comprehensive power legislation (S.5866/A.8960) addressing an array of Authority programs that provide economical electricity for economic development. The legislation included provisions relating to extending programs under EDPAB’s jurisdiction. 

                In addition, provisions of legislation (S.3669/A.6843) enacted as part of the State Fiscal Year 2005-06 Budget changed the sunset of the Power for Jobs (“PFJ”) program from December 31, 2005 to December 31, 2006, authorizing another year of benefits for PFJ customers.

Comprehensive Power Legislation

Archaic “FitzPatrick” Statutory Language Amended

The comprehensive legislation removes outdated references to the FitzPatrick Nuclear Power Plant, which the Authority sold to Entergy Nuclear in 2000, as the source of power for the Authority’s Economic Development Power (“EDP”), High Load Factor Power (“HLFP”) and Municipal Distribution Agency Power (“MDAP”) programs.  The legislation clarifies that the Authority may use power from other sources to serve the customers in these programs.  The Authority can draw on its existing generation resources and, rather than adding more resources of its own, solicit bids for generation on a competitive basis from generators and other market suppliers. 

Energy Cost-Savings Benefit Created

The legislation authorizes EDPAB to solicit applications and recommend “energy cost savings benefits” for “eligible businesses” based on criteria set forth in the law to promote economic development, maintain and develop jobs and encourage new capital investment throughout the State.

For an initial period lasting until December 31, 2006, the only recipients eligible for the benefit will be among a set of 69 Authority customers in the EDP, HLFP and MDAP programs that may be subject to rate increases prior to December 31, 2006.

The legislation does not include any specific pricing provisions. However, it has been agreed that the energy cost-savings benefit will help the Authority phase in rate increases, averaging a total of approximately 6% for the 14-month term.

The legislation authorizes up to 70 MW of unallocated power from the Niagara Power Project and up to 20 MW of currently unallocated power from the St. Lawrence-FDR Project to be sold into the market to help fund the energy cost-savings benefit. (However, the 20 MW of St. Lawrence-FDR power is only authorized to be part of the program through December 31, 2006.) In addition, up to 38.6 MW of power from the St. Lawrence-FDR Project may be allocated for the benefit if that power is voluntarily relinquished by business.

The energy cost-savings benefit is authorized to continue beyond December 31, 2006 (with the support of up to 70 MW of Replacement Power and potentially as much as 38.6 MW of St. Lawrence-FDR power). Eligibility after December 31, 2006 will be determined by EDPAB under the criteria established in the new §183(h) of the Economic Development Law, including:

1)      overall economic impact of the company in forms of jobs created or retained, payroll, capital investment and the use of in-state suppliers;

2)      the likelihood that absent approval a company would close, contract or relocate outside of New York State;

3)      the company’s compliance with prior contractual commitments to retain and/or create jobs; and

4)       the extent to which a benefit would affect the overall productivity or competitiveness of the company and its existing in-State employment.

Power for Jobs -- Revised Commitments Authorized

The legislation amended the Economic Development Law to allow complete or partial electricity reimbursements and contract extensions under the PFJ program, subject to revised commitments to be established by EDPAB.

On February 24, 2005, Chairman Ciminelli on behalf of EDPAB wrote to the Governor and legislative leaders advising them that the 2004 law creating the extended benefits provisions of the PFJ program included provisions stating that an applicant would be eligible for extended benefits only if it is in compliance with the job commitments of its prior contract.  As a consequence, 121 of the 322 applications were determined to be ineligible under the law. 

With the enactment of the provision of S.5866/A.8960, previously ineligible applicants will become eligible for EDPAB to review, revise job commitments and recommended benefits consistent with revised job commitments.

2005-06 State Budget Legislation

Power for Jobs Program Extended

As proposed by the Governor in his Executive Budget, the budget legislation approved by the legislature continues extended PFJ benefits in the form of contract extensions or electricity saving reimbursement rebates for all existing PFJ customers for another year (from the currently scheduled end of the program on December 31, 2005 to December 31, 2006.)

As a result, the 288 PFJ customers with contracts expiring on December 31, 2005 will become eligible to apply for a year of extended benefits (either contract extensions or energy savings reimbursement rebates). In addition, a total of 322 applicants for extended benefits under the 2004 law will also be eligible to apply for an additional year of extended benefits (an overall total of 610 applicants).

                Chairman Ciminelli informed the Board that this was his last official meeting.  He thanked all Members and Authority staff for their dedication and effort, wished them luck and urged them to keep doing good work.

                Board Member Corbett thanked the Chairman for the good job he had done for Western New York and requested that a resolution in honor of Chairman Ciminelli be prepared for the next meeting of the Board.

5.             Next Meeting

The next meeting of the Board is to be determined.

Closing

             Upon motion duly made and seconded, the meeting was closed at 10:16 a.m.

JuneMins