ECONOMIC DEVELOPMENT POWER

ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

MINUTES

January 30, 2006

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

Niagara Power Project, 5777 Lewiston Road, Lewiston, NY

Empire State Development Corporation, 633 Third Avenue, New York, NY

1. Approval of the Minutes of the Meeting of December 13, 2005

2. Report from the Chairman

3. Power for Jobs Extended Benefits Recommendations for Contract Extension

A. Company Not in Job Compliance

Con Edison – Service Territory

Display Producers, Inc.

Bronx – Bronx County

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

Con Edison – Service Territory
92nd Street YM-YWHA New York – New York County Henry Street Settlement New York – New York County Kingsbrook Jewish Medical Center Brooklyn – Kings County Lincoln Center for the Performing Arts New York – New York County Liz Claiborne, Inc. New York – New York County Long Island Jewish Medical Center Manhasset – Nassau County New Museum of Contemporary Art New York – New York County	New York Presbyterian Hospital New York – New York County New York University New York – New York County North General Hospital New York – New York County NYU Medical Center New York – New York County Pepsi Cola Bottling Company College Point – Queens County S. R. Guggenheim Museum New York – New York County South Street Seaport Museum New York – New York County
Long Island Power Authority – Service Territory
AMETEK Hughes-Treitler Military Corp. Garden City – Nassau County Enzo Clinical Labs, Inc. Farmingdale – Suffolk County	Good Samaritan Hospital West Islip – Suffolk County John Hassall, Inc. Westbury – Nassau County
National Grid – Service Territory
Diemolding Corporation Canastota – Madison County Edward John Noble Hospital Gouverneur – St. Lawrence County Interface Solutions, Inc. Fulton – Oneida County LB Furniture Industries, LLC Hudson – Columbia County Lewis County General Hospital Lowville – Lewis County Mohawk Paper Mills Cohoes – Albany County Nathan Littauer Hospital & Nursing Home Gloversville – Fulton County Natrium Products, Inc. Cortland – Cortland County		Queensboro Farm Products, Inc. – Canastota Canastota – Madison County Revere Copper Products Rome – Oneida County Robinson & Smith, Inc. Gloversville – Fulton County Snyder Industries, Inc. N. Tonawanda – Niagara County Spancrete Northeast, Inc. (Oldcastle) South Bethlehem – Albany County St. Joseph’s Hospital Health Center Syracuse – Onondaga County Syracuse University Syracuse – Onondaga County Welch Allyn Data Collection Inc. Skaneateles Falls – Onondaga County

5. Power for Jobs Reconsideration

6. Recommendation to Extend Two Existing

Economic Development Power Program Customers

Long Island Power Authority – Service Territory
Stellex Monitor Aerospace Corp. Amityville – Suffolk County
New York State Electric and Gas – Service Territory
Racemark International, Inc. Malta – Saratoga County

7. Energy Cost Savings Benefits Recommendations

A. Companies in Job Compliance

Long Island Power Authority – Service Territory
Stellex Monitor Aerospace Corp. Amityville – Suffolk County
National Grid – Service Territory
Middleport Cold Storage Middleport – Herkimer County

B. Company Not in Job Compliance

New York State Electric and Gas – Service Territory

Racemark International, Inc.

Malta – Saratoga County

Other Business

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) Niagara Power Project, 5777 Lewiston Road, Lewiston, NY

4) Empire State Development Corp. 633 Third Avenue, NY

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

Frank S. McCullough, Jr., Chairman (White Plains, NY)

Bernard P. McGarry, Member (Albany, NY)

James A. Duncan, Member, (Lewiston, NY)

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

Also in attendance were:

Eugene W. Zeltmann President and Chief Executive Officer, NYPA

Timothy S. Carey Chief Operating Officer, NYPA

David E. Blabey Executive Vice President, Secretary and General Counsel, NYPA

Carmine J. Clemente Deputy Secretary and Deputy General Counsel, NYPA

Louise M. Morman Senior Vice President – Marketing, Economic Development
& Supply Planning, NYPA

Gary Paslow Vice President – Governmental Affairs & Policy Development

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 Director – Business Power Allocations, Regulation and Billing, NYPA

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

Niko Ladopoulos Legislative Liaison – Public & Governmental Affairs, NYPA

Bonnie Fahey Executive Administrative Assistant, NYPA

Mary Jean Frank Associate Secretary, NYPA

Lorna M. Johnson Assistant Secretary, NYPA

Michael A. Saltzman Senior Information Specialist, NYPA

Lynnette J. Taylor Senior Legal Secretary, NYPA

Michael J. Santarcangelo Director – Energy Policy, ESDC

Chairman McCullough said that staff had finally received the transcript from the October Assembly hearing. Staff reviewed the transcript and feels that the reconsideration criteria EDPAB adopted are very consistent with the recommendations made at the hearing, so there is no need to amend the criteria at this time.

The members of the Board considered one application for extended benefits recommendations for contract extension for a company not in job compliance listed below for Power for Jobs. Mr. Pasquale explained that some 311 jobs would be impacted. See Exhibit “3-A.”

In response to a question from Mr. Corbett, Mr. Pasquale said that the power allocation reduction for Display Producers, Inc. was in direct proportion to the number of jobs it fell below its commitment.

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

WHEREAS, the following entity has applied for extended benefits recommendations for a contract extension under the Power for Jobs program:

NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such application meets 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; Chapter 59 of the Laws of 2004; and Chapter 313 of the Laws of 2005, 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 one application for extended benefits recommendations for a contract extension discussed herein totaling
300 kW until December 31, 2006.

The members of the Board reconsidered the 34 applications for full or partial reinstatement of extended benefits recommendations for contract extensions listed below for Power for Jobs. Mr. Pasquale explained that some 58,071 jobs would be impacted. See Exhibit “4-B.”

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

WHEREAS, the following entities have applied for extended benefits recommendations 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 extended benefits provisions of the Power for Jobs legislation contained in Article 6 of the Economic Development Law as amended by Chapter 313 of the Laws of 2005; and be it further

RESOLVED, That the Board recommends to the Power Authority of the State of New York the 34 applications for extended benefits recommendations for electricity savings reimbursements discussed herein totaling 37,474 kW until December 31, 2006.

The members of the Board considered the 53 applications for full or partial reconsideration for contract extensions, 16 applications for full or partial reconsideration for electricity savings reimbursements, and 23 applications for full or partial reconsideration for the benefits to remain at the reduced amount listed below for Power for Jobs. Mr. Pasquale explained that some 18,687 jobs would be impacted. See Exhibits “5-C1,” “5-C2” and “5-C3.”

Mr. Pasquale said that staff had reviewed approximately 100 requests for reconsideration of the allocation reduction, with each request being reviewed by at least three people. (If there was no consensus on a given request, Mr. Pasquale would also review it.) The requests were then assigned to one of three categories: (1) clearly met the reconsideration criteria, (2) clearly didn’t meet the reconsideration criteria, or (3) not as clear whether reconsideration criteria were met. Those requests in category (3), most of which claimed that the companies had been affected by regional or global competition, are being recommended to receive one-half of the amount of their allocation that was taken back due to their not meeting their job commitments. In response to a question from Mr. Corbett, Mr. Pasquale said that staff from Empire State Development Corporation (“ESDC”) did not review any of the requests for reconsideration, but that ESDC staff had reviewed the reconsideration criteria. In response to a question from Mr. Duncan, Mr. Corbett said that ESDC staff likes to be aware of EDPAB’s actions with regard to companies that ESDC is also working with for consistency’s sake.

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

WHEREAS, the following entities have applied for reconsideration for full or partial reinstatement under the Power for Jobs program:

RESOLVED, That the Board recommends to the Power Authority of the State of New York the 53 applications for full or partial reconsideration for contract extensions; 16 applications for full or partial reconsideration for electricity savings reimbursements and 23 applications for full or partial reconsideration for the benefits to remain at the reduced amount discussed herein totaling 53,988 kW until December 31, 2006.

The members of the Economic Development Power Allocation Board (Power Allocation Board) are requested to recommend approval of an extension to the term of service to December 31, 2006 for two existing economic development power program customers, as listed in Exhibit “6-A.”

The New York Power Authority sells electricity to businesses under several state-authorized economic development programs. These power sales are made through the Economic Development Power program, High Load Factor Manufacturer program, Municipal Distribution Agency Industrial Power program and other power sales programs. The capacity and energy for these sales are provided by market purchases and supported by other Authority sources as needed. In some instances, these customers are served directly by the Authority and in other cases, the customers receive Authority power through resale arrangements with municipal distribution agencies or investor-owned utilities. Contracts range in length from five to more than 20 years.

Chapter 313 of the Laws of 2005 was signed into law by Governor George E. Pataki on July 26, 2005. The new law allows certain Authority power program customers who would be exposed to price increases before December 31, 2006 to apply for an Energy Cost Savings Benefit. Under the new law, businesses eligible to receive Energy Cost Savings Benefits are limited to Authority customers currently supplied power under the Economic Development Power, Municipal Distribution Agency and High Load Factor programs. The Energy Cost Savings Benefit will be available for the period November 1, 2005 through December 31, 2006.

The customers detailed in Exhibit “5-A” have allocation contracts, previously recommended by the Power Allocation Board and approved by the Power Authority Trustees, that expire prior to December 31, 2006. We are requesting the Power Allocation Board to recommend that the Trustees extend these agreements until December 31, 2006 so that the customers may receive the benefits associated with the recently passed law. The extension will help maintain costs and enable the customers to compete more effectively. In addition, it will further secure employment levels in New York State.

It is requested that the Power Allocation Board recommend extensions to the term of service to December 31, 2006 for the two existing economic development power program customers, as listed in Exhibit “6-A.”

Following consideration of such applications, the Members of the Board present voted unanimously to extend the contract.

WHEREAS, two customers have applied for extensions to their existing Economic Development Power contracts;

NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such applications meet the requirements of Section 184 of the Economic Development Law; and be it further

RESOLVED, That the Board hereby recommends to the Power Authority of the State of New York the total allocation of 2,250 kW to extend the existing contract of the business listed on Exhibit “6-A” to December 31, 2006, and that the terms set forth on such Exhibit be incorporated into the Power Authority’s contract for Economic Development Power.

The Members of the Economic Development Power Allocation Board (Power Allocation Board) are requested to recommend approval of Energy Cost Savings Benefits for three companies as listed in Exhibit “7-A.”

Chapter 313 of the Laws of 2005 was signed into law by Governor George E. Pataki on July 26, 2005. The new law allows certain New York Power Authority power program customers who would be exposed to bill increases as a result of higher market prices before December 31, 2006 to apply for an Energy Cost Savings Benefit. Under the new law, businesses eligible to receive Energy Cost Savings Benefits are limited to Authority customers currently being supplied power under the Economic Development Power, Municipal Distribution Agency and High Load Factor programs.

The Energy Cost Savings Benefit will be available for the period November 1, 2005 through December 31, 2006. Each application will be evaluated under criteria adopted by the Power Allocation Board in consultation with the Power Authority. The new law states that such criteria shall include:

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

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

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

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

The Power Allocation Board can recommend a partial or complete withdrawal of the Energy Cost Savings Benefit if the company fails to maintain mutually agreed-upon commitments including jobs, capital investment and power utilization.

The legislation also authorizes the sale of Authority power into the wholesale market with net earnings from such sales (and other funds deemed feasible and advisable by the Trustees) to be used for the Energy Cost Savings Benefits. Power available to fund Energy Cost Savings Benefits includes:

· up to 38.6 MW of preservation power relinquished or withdrawn after the effective date of the new legislation and

· up to 20 MW of power from the St. Lawrence/FDR project for the period ending December 31, 2006.

The three organizations listed in Exhibit “7-A” have agreed to retain more than 500 jobs in New York State in exchange for these benefits. The companies will be eligible to receive these benefits until December 31, 2006.

Funding of Energy Cost Savings Benefits for the all the companies participating in the program is not expected to exceed $7,500,000.

The Power Allocation Board is requested to recommend that the Authority’s Trustees approve Energy Cost Savings Benefits to the three businesses listed in Exhibit “7-A.”

Mr. Pasquale said that all of the companies that were eligible to apply for economic development power contract extensions and Energy Cost Savings Benefits (“ECSBs”) have now done so and that EDPAB will have no more ECSB applications to consider unless legislation is passed extending them.

Following consideration of such applications, the Members of the Board present voted unanimously to adopt the following resolution:

NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such applications meet the requirements of the energy cost savings benefits under the Power for Jobs legislation contained in Article 6 of the Economic Development Law as amended by Chapter 313 of the Laws of 2005; and be it further

RESOLVED, That the Board recommends to the Power Authority of the State of New York the three applications for energy cost savings benefits discussed herein totaling 2,550 kW until December 31, 2006.

Chairman McCullough said that staff has been trying to get information out to the EDPAB members sooner so that the members have more time to review it before the EDPAB meetings. He also urged the other EDPAB members to feel free to call him if they had any issues they would like to discuss.

CONTRACT EXTENSIONS
Albany International Corp. Albany Amsterdam Printing & Litho Amsterdam Beechnut Nutrition Corp. Canajoharie Blasch Precision Ceramics Albany Byrne Dairy, Inc. Syracuse Climax Manufacturing Co. Carthage Codino’s Italian Foods, Inc. Scotia Crucible Specialty Metals Syracuse Eastern Castings Corp. Cambridge Elmira College Elmira Hadco (Sanmina) Oswego Hadco Corp. Oswego Harding Manufacturing Corporation Rome Henry Modell Inc. / Modell’s NY Inc. Bronx Kaz Incorporated Hudson Keymark Corporation Fonda Little Falls Hospital Little Falls Novapak Corporation Philmont Orion Bus Industries Oriskany Producto Machine Company – Ring & Pierce Jamestown Quebecor World Buffalo, Inc. Depew Richards Machine Tool Co., Inc. Lancaster Roberson Memorial, Inc. Binghamton Rome Specialty Company, Inc. Rome Samaratin Medical Center Watertown Schoolhouse Companies Gloversville Staroba Plastic & Metal Products Holland	The Jewish Museum New York Universal Instruments Corporation Binghamton American Pipe & Plastics, Inc. Binghamton Auburn Vacuum Forming Co., Inc. Auburn BSU, Inc. Ithaca Buflovak, LLC Buffalo Canterbury Printing Company of Rome, Inc. Rome Carville National Leather Corp. Johnstown Chapin Watermatics, Inc. Watertown Cherry Creek Woodcraft, Inc. South Dayton CWR Manufacturing, Co. Syracuse Deck Bros., Inc. Buffalo Exolon-ESK Company Tonawanda Hardinge Inc. Elmira ILC Data Device Corporation Bohemia International Fiber Corporation North Tonawanda ITT Standard Cheektowaga Kintz Plastics, Inc. Howes Cave Knowlton Specialty Paper Watertown Lancaster Knives, Inc. Lancaster Niagara Fiberboard, Inc. Lockport Par Foam Products, Inc. Buffalo Sabin Metal Corporation Scottsville Schilling Forge, Inc. Syracuse Tompkins Metal Finishing, Inc. Batavia W.W. Custom Clad, Inc. Canajoharie
ELECTRICITY SAVINGS REIMBURSEMENTS
Audiosears Stamford Dodge-Graphic Pres Inc. Utica Fitzpatrick & Weller, Inc. Ellicotville Kilian Syracuse Manitoba Lancaster Norampac Maspeth Quad Graphics Saratoga Springs Seneca Foods Corporation Marion	Syroco Baldwinsville Utica Corp. (TECT) Whitesboro Vail Ballou Press (Maple-Vail Book Manuf) Binghamton Cooper Industries (Crouse-Hinds) Syracuse Jada Rochester Lydall Manning Green Island Specialized Packaging Group Baldwinsville Syracuse China Syracuse
BENEFITS TO REMAIN AT REDUCED AMOUNT
A.T. Reynolds (Leisure Time) Kiamesha Lake Accumed Technologies, Inc. Buffalo B.H. Aircraft Company, Inc. Ronkonkoma Canajo Manufacturing Company Canajoharie Dupli Envelopes & Graphics, Corp. Syracuse F.P. Pla Tool & Manufacuring Co. Buffalo Graphic Controls LP, A Tyco Int. LT Buffalo Hebeler Corporation Tonawanda Indian Country Inc. Deposit J.C. Plastics, Inc. Rochester Marlette National Corporation Buffalo Metalico, Inc. Buffalo		Metweld Altamont Midstate Spring, Inc. Syracuse Niagara Gear Corp. Kenmore NIBCO, Inc. South Glens Falls Pearl Leather Finishers, Inc. Johnstown Remarketing Services (Fiserv) Amherst Rich Plain Food Service, Inc. Clark Mills Sentry Metal Blast, Inc. (dba Sentry Metal Services) Niagara Falls Spray Nine Corporation Johnstown Stella D’Oro Biscuit Co., Inc. Bronx Syracuse Label Co., Inc. Liverpool