ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

 

MINUTES

 

January 29, 2008

Video Conference – 10:00 a.m.

 

New York Power Authority Offices:
                123 Main Street, 16th Floor, White Plains, NY
                30 South Pearl Street, 10th Floor, Albany, NY
Fort Myers Interactive Video, 1408 Bayview Ct., Fort Myers, FL

 

 

1.             Approval of the Minutes of the Meeting of December 20, 2007

 

 

2.             Power for Jobs Extended Benefits Recommendations

                for Electricity Savings Reimbursements                          

 

A.         COMPANIES IN JOB COMPLIANCE

 

Con Edison - Service Territory

Bank of New York

New YorkNew York County

 

New York Presbyterian Hospital

New YorkNew York County

 

NYU Medical Center

New YorkNew York County

 

Pepsi Cola Bottling Company

College Point – Queens County

 

Streamline Plastics Co., Inc.

Bronx – Bronx County

 

Long Island Power Authority - Service Territory

American Technical Ceramics                                                    North Shore Health System

Huntington Station – Suffolk County                                      Manhasset – Nassau County

 

 

National Grid - Service Territory

Albany International Corp.

Homer – Cortland County

 

Albany Molecular Research, Inc.

AlbanyAlbany County

 

Borg Warner Morse Tech Corp.

CortlandCortland County

 

Cooper Hand Tools

CortlandCortland County

 

Dielectric Laboratories, Inc.

Cazenovia – Madison County

 

Diemolding Corporation

Canastota – Madison County

 

General Electric Plastics

Selkirk – Albany County

 

Intertek Testing Services

CortlandCortland County

 

Mohawk Paper Mills

CohoesAlbany County

 

Natrium Products, Inc.

CortlandCortland County

 

OAB Holdings, Inc.

BuffaloErie County

 

Welch Allyn Data Collection Inc.

Skaneateles Falls – Onondaga County

 

New York State Electric and Gas – Service Territory

Agri-Mark, Inc.

Chateaugay – Franklin County

 

B.            COMPANIES NOT IN JOB COMPLIANCE

 

Con Edison - Service Territory

East Harlem Arts & Education Local Development Corp.
New YorkNew York County

 

 

National Grid - Service Territory

Cascades Tissue Group                                                              Organichem, Inc.

WaterfordSaratoga County                                                   Rensselaer – Rensselaer County

 

Interface Solutions, Inc.

FultonOswego County

 

 

3.        Transfer of Industrial Power

 

Exolon Company

TonawandaErie County

 

General Semiconductor, Inc

Westbury – Nassau County

ILC Data Device Corporation

BohemiaSuffolk County

 

ORC Plastics

OneidaMadison County

 

 

4.        Economic Development Plan for Use of Industrial Incentive Awards

 

 

        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)       Fort Myers Interactive Video, 1408 Bayview Ct., Fort Myers, FL

 

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, (Fort Myers, FL)

 

Kevin S. Corbett, Member (Excused)

 

Also in attendance were:

 

Roger B. Kelley                    President and Chief Executive Office, NYPA

Thomas J. Kelly                    Executive Vice President, General Counsel and Chief of Staff, NYPA

Gil C. Quiniones                   Executive Vice President – Energy Marketing and Corporate Affairs, NYPA

James H. Yates                     Senior Vice President, Marketing and Economic Development, NYPA

Thomas Warmath                                Vice President and Chief Risk Officer, NYPA

Anne B. Cahill                      Corporate Secretary, NYPA

Joseph C. Carline                 Assistant General Counsel, NYPA

Angela Graves                      Deputy Corporate Secretary, NYPA

John B. Hamor                      Executive Director – State Governmental Relations, NYPA

James F. Pasquale                Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing, NYPA

Michael A. Saltzman            Director – Media Relations, NYPA

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

Mary Jean Frank                  Associate Corporate Secretary, NYPA

Lorna M. Johnson               Assistant Corporate Secretary, NYPA

Jack Murphy                         Temporary Public Relations Counsel, NYPA

Keith Corneau                          Energy Policy, ESDC


1.                    Adoption of Minutes

The minutes of the meeting of December 20, 2007, were unanimously adopted.


 

2.             Power for Jobs Program - Extended Benefits

 

 

SUMMARY

 

The Members of the Economic Development Power Allocation Board (“EDPAB”) are requested to approve extended benefits for 24 Power for Jobs (“PFJ”) customers as listed in Exhibits “A” and “B.” 

 

BACKGROUND

 

                In July 1997, the New York State Legislature approved a program to provide low-cost power to businesses and not-for-profit corporations that agree to retain or create jobs in New York State.  In return for commitments to create or retain jobs, successful applicants receive three-year contracts for PFJ electricity.

 

The PFJ program originally made 400 megawatts (“MW”) of power available.  The program was to be phased in over three years, with approximately 133 MW made available each year.  In July 1998, as a result of the initial success of the program, the Legislature amended the PFJ statute to accelerate the distribution of the power and increase the size of the program to

450 MW.

 

                In May 2000, legislation was enacted that authorized another 300 MW of power to be allocated under the PFJ program.  Legislation further amended the program in July 2002.

 

                Chapter 59 of the Laws of 2004 extended the benefits for PFJ customers whose contracts expired before the end of the program in 2005.  Such customers had to choose to receive an “electricity savings reimbursement” rebate and/or a power contract extension.  The Authority was also authorized to voluntarily fund the rebates, if deemed feasible and advisable by the Trustees.

 

PFJ customers whose contracts expired on or prior to November 30, 2004 were eligible for a rebate to the extent funded by the Authority from the date their contract expired through December 31, 2005. 

 

PFJ customers whose contracts expired after November 30, 2004 were eligible for rebate or contract extension, assuming funding by the Authority, from the date their contracts expired through December 31, 2005.

 

Approved contract extensions entitled customers to receive the power from the Authority pursuant to a sale-for-resale agreement with the customer’s local utility.  Separate allocation contracts between customers and the Authority contained job commitments enforceable by the Authority.

 

In 2005, provisions of the approved State budget extended the period PFJ customers could receive benefits until December 31, 2006.  Chapter 645 of the Laws of 2006 included provisions extending program benefits until June 30, 2007.  Chapter 89 of the Laws of 2007 included provisions extending program benefits until June 30, 2008.

 

At its meeting of October 18, 2005, EDPAB approved criteria under which applicants whose extended benefits EDPAB had reduced for non-compliance with their job commitments could apply to have their PFJ benefits reinstated in whole or in part.  EDPAB authorized staff to create a short-form application, notify customers of the process, send customers the application and evaluate reconsideration requests based on the approved criteria.

 

DISCUSSION

 

                EDPAB is requested to recommend that the Authority Trustees approve electricity savings reimbursement rebates to the 24 PFJ customers, 20 of which are meeting their current job commitment and are listed in Exhibit “A.” However, four customers reported actual job numbers below their contractual commitment; we are recommending that these customers have their allocations reduced proportionately to their job shortfalls where appropriate.  These customers are listed in Exhibit “B.”  Collectively, these organizations have agreed to retain more than 39,000 jobs in  New York State in exchange for rebates. The rebate program will be in effect until June 30, 2008, the program’s sunset.

 

RECOMMENDATION

 

It is requested that the Economic Development Power Allocation Board recommend that the Power Authority’s Trustees approve the payment of electricity savings reimbursements to the 24 businesses listed in Exhibits “A” and “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:

COMPANIES IN JOB COMPLIANCE

 

Con Edison - Service Territory

Bank of New York

New YorkNew York County

 

New York Presbyterian Hospital

New YorkNew York County

 

NYU Medical Center

New YorkNew York County

Pepsi Cola Bottling Company

College Point – Queens County

 

Streamline Plastics Co., Inc.

Bronx – Bronx County

 

Long Island Power Authority - Service Territory

American Technical Ceramics                                    North Shore Health System

Huntington Station – Suffolk County                         Manhasset – Nassau County

 

National Grid - Service Territory

Albany International Corp.

Homer – Cortland County

 

Albany Molecular Research, Inc.

AlbanyAlbany County

 

Borg Warner Morse Tech Corp.

CortlandCortland County

 

Cooper Hand Tools

CortlandCortland County

 

Dielectric Laboratories, Inc.

Cazenovia – Madison County

 

Diemolding Corporation

Canastota – Madison County

 

General Electric Plastics

Selkirk – Albany County

 

Intertek Testing Services

CortlandCortland County

 

Mohawk Paper Mills

CohoesAlbany County

 

Natrium Products, Inc.

CortlandCortland County

 

OAB Holdings, Inc.

BuffaloErie County

 

Welch Allyn Data Collection Inc.

Skaneateles Falls – Onondaga County

 

New York State Electric and Gas – Service Territory

Agri-Mark, Inc.

Chateaugay – Franklin County

 


COMPANIES NOT IN JOB COMPLIANCE

 

Con Edison - Service Territory

East Harlem Arts & Education Local Development Corp.
New YorkNew York County

 

National Grid - Service Territory

Cascades Tissue Group                                                 Organichem, Inc.

WaterfordSaratoga County                                      Rensselaer – Rensselaer County

 

Interface Solutions, Inc.

FultonOswego County

 

 

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 645 of the Laws of 2006; and be it further

 

RESOLVED, That the Board recommends to the Power Authority of the State of New York the 24 applications for extended benefits recommendations for electricity savings reimbursements discussed herein totaling 41,665 kW until June 30, 2008.

 




 

3.             Transfers of Industrial Power

 

 

SUMMARY

 

                The Economic Development Power Allocation Board (“EDPAB”) is requested to recommend approval of Industrial Power (“IP”) transfers as detailed below.

 

BACKGROUND

 

EDPAB is requested to approve the transfer of IP allocations for four existing companies that have changed names and or/locations for various business reasons.  EDPAB has approved transfers of this nature at past meetings

 

DISCUSSION

 

                The proposed transferees are as follows:

 

The Exolon Company (“Exolon”), located in Tonawanda, Erie County, has been in business since 1914, with this facility in operation since 1943.  Exolon manufactures various- sized abrasive grains made of silicone carbide and fused aluminum oxide, primarily used by grinding wheel manufacturers.  The company was awarded a 600 kW Power for Jobs (“PFJ”) allocation for 130 jobs by the Authority’s Trustees at their meeting of September 28, 1998.  The PFJ contract was extended by the Trustees at their September 26, 2000 meeting.  Exolon chose to take the contract extension option in 2005, and was approved for 150 kW and 35 jobs through the end of 2006 by the Trustees at their meeting of September 20, 2005.  Exolon applied for reinstatement of its reduced allocation.  At their January 31, 2006 meeting, the Trustees approved partial reinstatement of the allocation, such that through the end of 2006 the allocation was 375 kW with 35 jobs.  Exolon applied for the extended benefits contract extension for January 1, 2007 through June 30, 2007, with 375 kW and 52 jobs, as approved by the Trustees at their meeting of November 28, 2006.  The contract extension option has been extended through June 30, 2008, with 375 kW and 52 jobs, as approved by the Trustees at their meeting of June 26, 2007.  The company was purchased by Washington Mills Company, Inc. (“Washington Mills”) in 2001.  Effective January 1, 2008, Washington Mills established two separate corporate entities, one to be based in New York and one to be based in Illinois.  The new New York company, with Washington Mills as its parent company, will be called Washington Mills Tonawanda, Inc. and will assume all assets and liabilities of Exolon.  The location will remain the same, as will the business carried on at the location.  Exolon requests that its PFJ allocation be transferred to Washington Mills Tonawanda, Inc., which will continue to honor all of the terms and commitments of its contract with the Authority.

 

General Semiconductor, Inc. (“GSI”), located in Westbury, Nassau County, has been in business for more than 50 years.  GSI manufactures cutting-edge silicon epitaxial materials for use in manufacturing semiconductor devices.  The company was awarded an 850 kW Economic Development Power (“EDP”) allocation for 44 jobs by the Trustees at their meeting of February 23, 1993.  In September 1998, the company signed a long-term contract with the Authority through October 31, 2007.  On October 1, 2001, GSI was purchased by Vishay Intertechnology Inc. (“Vishay”).  GSI is now a wholly owned subsidiary of Vishay.  The business conducted by the company remains unchanged from before the acquisition and the Westbury location remains the same as well.  At their June 26, 2007 meeting, the Trustees extended the EDP allocation through June 30, 2008 and granted the company Energy Cost Savings Benefits for the same period in exchange for 44 jobs.  The company is now named Vishay GSI, LLC.  The company will continue to honor all of the terms and commitments of its contract with the Authority. 

 

ILC Data Device Corporation (“IDDC”), located in Bohemia, Suffolk County, was founded in 1964.  The company manufactures microelectronics, including digital converters, data bus devices, solid-state power controllers and motor drivers.  The company is changing its name only, without any ownership change, to Data Device Corporation.  The Trustees approved a 1,400 kW PFJ allocation with 456 jobs at their December 16, 1997 meeting.  The allocation was extended by the Trustees at their meeting on September 26, 2000.  At their September 20, 2005 meeting, the Trustees granted extended benefits with a contract extension for the allocation, with 1,200 kW and 384 jobs, through December 31, 2006.  IDDC applied for reinstatement of its full allocation.  At their meeting of January 31, 2006, the Trustees approved partial reinstatement of the allocation, such that through the end of 2006 the allocation was 1,300 kW with 384 jobs.  At their November 28, 2006 meeting, the Trustees extended the allocation through June 30, 2007, with 1,300 kW and 381 jobs.  At their June 26, 2007 meeting, the Trustees extended the allocation through June 30, 2008.  The company will continue to honor all of the terms and commitments of its contract with the Authority.  The company requests that the Trustees approve its name change for contractual purposes.

 

ORC Plastics, a division of Reunion Industries Inc. (“ORC”), located in Oneida, Madison County, and Phoenix, Oswego County, has been in business since 1964, and manufactures injection-molded plastic products for parts in original equipment, mostly for IBM and Xerox.  The Trustees approved a PFJ allocation for the Oneida location, ORC 3, for 400 kW with 78 jobs at their June 26, 2001 meeting.  The Trustees approved a PFJ allocation for the Phoenix location, ORC Plastics 1, for 125 kW with 53 jobs at their June 26, 2001 meeting.  At their March 29, 2005 meeting, the Trustees extended the PFJ allocations, with ORC 1 having 59 jobs and ORC 3 having 76 jobs, through December 31, 2005.  The Trustees extended the PFJ allocations through December 31, 2006 at their meeting on September 20, 2005.  The Trustees extended the PFJ allocations through June 30, 2007 at their October 24, 2006 meeting.  The allocations were extended through June 30, 2008 at the June 26, 2007 Trustees’ meeting.  At their meeting of October 30, 2007, ORC 1’s allocation and employment commitment was adjusted to 100 kW and 46 jobs by the Trustees.  Oneida Molded Plastics, LLC purchased Reunion Industries, Inc.’s assets in March 2006.  The company is moving its workforce and consolidating all production at the Oneida location.  The company requests that the Trustees transfer the Phoenix location allocation, including its employment commitment, to the Oneida location.  The company’s name is now Oneida Molded Plastics, LLC.  At the Oneida location, the company will continue to honor all of the terms and commitments of both of its current contracts with the Authority.

 

RECOMMENDATION

 

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

 

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

RESOLVED, That the members of the Economic Development Power Allocation Board hereby approve the transfer of power allocations for four existing companies that have changed names and/or locations for various business reasons as described in the above memorandum to the Board.


4.             Economic Development Plan - Use of Net

                Revenues Produced by Sale of Expansion Power

 

 

SUMMARY

 

                The Economic Development Power Allocation Board (“EDPAB”) is requested to approve an Economic Development Plan (“Plan”) for 2007 submitted by the New York Power Authority (“Authority”) for the use of industrial incentive awards pursuant to Section 188 of the Economic Development Law (“EDL”).

 

BACKGROUND

               

                Section 1005 of the Public Authorities Law (“PAL”), as amended by Chapter 32 of 1987, directs the Authority to identify net revenues produced by the sale of Expansion Power (“EP”) and, further, to identify an amount of such net revenues to be used solely for Industrial Incentive Awards.  These awards are to be made in conformance with a Plan covering all such net revenues.  The Authority is to submit Plans annually to EDPAB and approved by EDPAB pursuant to the EDL.

 

                Net revenues are defined by Section 1005 as any excess of revenues properly allocated to the sales of EP 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, EDPAB approved a resolution on December 1, 1988 that concluded that available industrial incentive awards be used to assist the Authority in its efforts to limit future production rate increases for all industrial, business and Economic Development Power (“EDP”) customers of the James A. Fitzpatrick Nuclear Power Plant (“Fitzpatrick Plant”).  Further, EDPAB recommended that it should act affirmatively on any Plan submitted to it subsequently by the Authority to the extent that the Plans provide for such use of industrial incentive awards.

 

The Authority approved five-year programs in 1990, 1996 and 2001 and a one-year program in 2006 under which EP net revenues were to be dedicated to helping maintain stable industrial rates. 

 

At their meeting of December 18, 2007, the Authority’s Trustees approved a one-year Plan that provides for the use of net revenues from the sale of EP that support rates for business customers served under the High Load Factor, Economic Development and Municipal Distribution Agency power programs associated with the former Fitzpatrick Plant.  EDPAB previously approved Plans submitted annually by the Authority for 1996 through 2005 that provided for such use of EP net revenues.  Through calendar year 2005, the Authority reported net EP revenues totaling $121.071 million.

                 

DISCUSSION

 

                Allocations of EDP have been a useful economic development tool.  EDPAB has recommended allocations associated with creating or retaining more than 95,000 jobs, totaling 428 MW, to date.  The costs of providing EDP are greater than the revenues produced by such sales.  In order to continue to market EDP on a competitive basis consistent with the aim of the legislation creating the EDP programs, the rates for industrial power must be kept low enough to provide sufficient economic incentive for industries to locate or expand in New York State.

 

                In December 2006, the Temporary State Commission on the Future of New York State Power Programs for Economic Development recommended numerous changes in the form and administration of the Authority’s EDP programs.  Any such changes would require legislation.  Moreover, the Power for Jobs (“PFJ”) and Energy Cost Savings Benefit (“ESCB”) programs will end on June 30, 2008.  ECSB awards go to the same customers that benefit from current industrial incentive award rate relief.  Thus, pending clarification of these programs’ future, it is appropriate to again propose extensions of the industrial incentive awards for one year instead of the usual five years.

 

                In calendar year 2006, net revenues of $7.283 million were produced from the sale of EP.  It is recommended that EDPAB approve the use of the 2006 EP net revenues towards the cost of serving the former Fitzpatrick Plant customers from the marketplace.

 

RECOMMENDATION

 

It is recommended the Economic Development Power Allocation Board approve the Economic Development Plan submitted by the Authority, which provides for the use of net revenues produced in 2006 from the sale of Expansion Power to support rates to industrial power program customers for one year as described herein.

 

Following consideration of such applications, the Members of the Board present voted unanimously to approve the Economic Development Plan.

WHEREAS, Section 1005 of the Public Authorities Law authorizes the Power Authority to identify an amount of the net revenues produced by the sale of Expansion Power to 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 Economic Development Power Allocation Board pursuant to Section 188 of the Economic Development Law; and

 

WHEREAS, EDPAB, 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, EDPAB, on December 1, 1988, recommended that any Economic Development Plan submitted by the Authority in the future be approved to the extent it provides for such use of industrial incentive awards; and

 

WHEREAS, the Authority has approved an Economic Development Plan for 2007 that provides for the use of net revenues from the sale of Expansion Power to support rates for industrial power program customers and, further, has authorized the submission of such Plan to EDPAB for its approval;

 

NOW THEREFORE BE IT RESOLVED, That EDPAB hereby determines that the Economic Development Plan for 2007, which is 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 State 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 EDPAB hereby approves such Plan providing for the use of net revenues from the sale of Expansion Power to support rates for industrial power program customers, in accordance with the attached memorandum.


5.             Next Meeting

 

                The next meeting of the Board is to be determined.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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