ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

MINUTES

 

September 26, 2011

Videoconference – 10:00 a.m.

 

 

 

 

 

                        New York Power Authority Offices:

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

                                    St. Lawrence/FDR Power Plant, 830 Barnhart Island, Massena, NY

                        Empire State Development Corporation, 95 Perry Street, Suite 500, Buffalo, NY

                        City of Oswego Community Development, 20 W. Oneida St., 3^rd Floor, Oswego, NY

 

 

 

                       

1.            Approval of the September 26, 2011 Meeting Agenda

2.            Approval of the Minutes of the Regular Meeting of July 25, 2011.

3.            Recharge New York Power Program

4.            Other Business

5.            Next Meeting

 

 

 

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

 

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

2)     St. Lawrence/FDR Power Plant, 830 Barnhart Island, Massena, NY

3)     Empire State Development Corporation, 95 Perry Street, Suite 500, Buffalo, NY

4)     City of Oswego Community Development, 20 W Oneida St., 3^rd Floor, Oswego, NY

 

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

Kenneth Schoetz, Chairman (Buffalo, NY)

Eugene L. Nicandri, Member, (Massena, NY)

Robert B. Catell, Member, Excused

Mary Vanouse, Member, (Oswego, NY)

 

 

Also in attendance were:

 

Gil Quiniones                 Acting President and Chief Executive Officer

Judith McCarthy             First Deputy General Counsel, NYPA

James F. Pasquale           Senior Vice President - Marketing & Economic Development, NYPA

Michael Huvane              Vice President Marketing, Business & Municipal Marketing

Karen Delince                 Corporate Secretary, NYPA

Vincent Esposito             Assistant General Counsel, Legislative & Regulatory Affairs

Dennis Eccleston             Vice President Information Technology/Chief Information Officer – Information

Technology, NYPA

Michael Saltzman            Director, Media Relations, NYPA

Lorna Johnson                Assistant Secretary, NYPA

Sheila Baughman                        Senior Secretary, NYPA

 

Mr. Samuel Hoyt, newly appointed Chairman of the Board, introduced himself to Board members saying that he appreciates the opportunity given him by Governor Cuomo to serve with them on this Board.  Chairman Holt then welcomed the Board members and staff to the meeting.

 

1.         Adoption of the Meeting Agenda

The agenda for the September 26, 2011 meeting was unanimously adopted.

 

 

2.         Adoption of the Minutes

 

The Minutes of the Regular Meeting of July 25, 2011 were unanimously adopted.

3.         Recharge New York Power Program

 

SUMMARY

 

            On April 14, 2011 the Governor signed legislation amending Economic Development Law (“EDL”) and the Power Authority Act to create a new “Recharge New York” (“RNY”) power program (“RNY”).  The new law (Chapter 60 of the Laws of 2011, Part CC) (“Chapter 60”) mandates that the applications for RNY power be in the form and contain such information, exhibits and supporting data as prescribed by the Economic Development Power Allocation Board (“EDPAB”) in consultation with the New York Power Authority (“Authority”).

 

BACKGROUND

 

Power sales under the RNY power program will commence July 1, 2012, coincident with expiration of the Power For Jobs (“PFJ”) and Energy Cost Savings Benefit (“ECSB”) programs on June 30, 2012.  RNY is a 910 megawatts (“MW”) economic development power program, consisting of 455 MW of hydroelectric power and an equal amount of market power.  The 455 MW block of hydropower was previously sold to three upstate utilities, New York State Electric & Gas Corporation (“NYSEG”), Niagara Mohawk Power Corporation d/b/a National Grid (“National Grid”) and Rochester Gas & Electric Corporation (“RG&E”), for the benefit of their rural and domestic consumers, and has been redeployed pursuant to Chapter 60 for use in the RNY power program.  

 

            EDPAB will review applications and recommend RNY power allocations for approval by Authority Trustees based on the following criteria listed in the Economic Development Law:

(1)  the significance of the cost of electricity to the applicant’s overall cost of doing business, and the impact that a RNY power allocation will have on the applicant's operating costs;

(2)  the extent to which a RNY power allocation will result in new capital investment in the State by the applicant;

(3)  the extent to which a RNY power allocation is consistent with any regional economic development council strategies and priorities;

(4)  the type and cost of buildings, equipment and facilities to be constructed, enlarged or installed if the applicant were to receive a RNY power allocation;

(5)  the applicant’s payroll, salaries, benefits and number of jobs at the facility for which a RNY power allocation is requested;

(6)  the number of jobs that will be created or retained within the State in relation to the requested RNY power allocation, and the extent to which the applicant will agree to commit to creating or retaining such jobs as a condition to receiving a RNY power allocation;

 (7) whether the applicant, due to the cost of electricity, is at risk of closing or curtailing facilities or operations in the State, relocating facilities or operations out of the State, or losing a significant number of jobs in the State, in the absence of a RNY power allocation;

(8)  the significance of the applicant’s facility that would receive the RNY power allocation to the economy of the area in which such facility is located;

(9)  the extent to which the applicant has invested in energy efficiency measures, will agree to participate in or perform energy audits of its facilities, will agree to participate in energy efficiency programs of the Authority, or will commit to implement or otherwise make tangible investments in energy efficiency measures as a condition to receiving a RNY power allocation;

(10) whether the applicant receives a hydroelectric power allocation or benefits supported by the sale of hydroelectric power under another program administered in whole or in part by the authority;

(11) the extent to which a RNY power allocation will result in an advantage for an applicant in relation to the applicant's competitors within the State; and

(12) in addition to the foregoing criteria, in the case of a not-for-profit corporation, whether the applicant provides critical services or substantial benefits to the local community in which the facility for which the allocation is requested is located.

            RNY power allocations may not exceed a term of seven years, and relinquished RNY power can be reallocated to eligible applicants.  A recipient of a RNY power award will have the choice to purchase the market power component of the award from the Authority or some other party (i.e., an ESCO or the recipient’s local utility).

 

            Eligible applicants include businesses other than not-for-profit corporations which normally utilize a minimum peak electric demand in excess of 400 kilowatts (“kW”); eligible not-for-profit corporations; and small businesses other than not-for-profit corporations which normally utilize a minimum peak electric demand equal to or less than 400 kW.  At least 350 MW of RNY power is set aside for use at facilities located within NYSEG, National Grid and RG&E service territories; at least 200 MW of RNY power is set aside for the purposes of attracting new business to the state, creating new business within the state, or encouraging the expansion of existing businesses within the state, that create new jobs or leverage new capital investment; and no more than 100 MW may be allocated to small businesses and not-for-profit entities.

 

Discussion

 

The EDL mandates that the applications for RNY power be in a form and contain such information, exhibits and supporting data as EDPAB prescribes in consultation with the Authority.  

 

Staff has attached, as Exhibit “A”, a proposed application for use in the RNY power program.  The proposed application contains questions designed to elicit responses that will enable staff, EDPAB and the Trustees to evaluate applications based on, among other things, eligibility requirements and the statutory criteria.  The proposed application is suitable for use as a stand-alone application or in conjunction with a consolidated application structure that could be used to support broader State economic development initiatives.

 

If approved by EDPAB, the application will be made available to applicants beginning September 27, 2011.  We anticipate bringing the first completed applications to EDPAB for their review at the December 2011 or January 2012 meeting.

 

Recommendation

 

            It is recommended that the Economic Development Power Allocation Board approve the form and content of the Recharge New York application as set forth in Exhibit “A” for use in the RNY power program.

 

           

Mr. James Pasquale presented highlights of staff’s recommendation regarding the form and content of the program application to the Board.   Responding to a question from Trustee Eugene Nicandri, Mr. Pasquale said that staff worked closely with the Governor's office and various business organizations in designing the application form.   In response to a further question from Trustee Nicandri, Mr. Pasquale said that staff used application forms from various power programs as a guide in preparing this application.  However, in designing the application, staff had to ensure that all criteria mandated in the new law were taken into consideration in order to elicit responses to those criteria.

 

In response to a question from Chairman Holt, Mr. Pasquale said that staff was concerned about the timeframe for approving the applications and would be discussing this issue with the Governor’s office and other council members.  He also said that applications would be mailed to customers on September 26th; the due date for completion of those applications is November 30th.  Staff expects to provide applications to the Board for review as early as their December meeting.

 

            In response to a question from Ms. Mary Vanouse, Mr. Pasquale said that businesses will need to fill out the Consolidated Funding Application to apply for a Recharge New York allocation.

 

 In response to further questions from Ms. Vanouse and Trustee Nicandri, amendments to the application form will be made as follows:

 

·       #35 - “Describe the ownership of the applicant’s business”

- this refers to the form of business, e.g. LLC - include principal of that business. 

·       #131  - “Describe the number of new permanent full time jobs . . .”

-  the number of new permanent jobs to include a timetable for the new permanent full-time jobs.

·       #125 - “What is the Facility’s current employment”

 -  request components of full-time and part time jobs

·       Businesses to list all of their locations within the state

 

In response to further question from Ms. Vanouse, Mr. Pasquale said that #s 157 and 158 refers to wages and benefits for new employees as a result of future expansion. 

 

Ms. Vanouse opined that the number of questions in the application is onerous for businesses filling out these applications and suggested that, in the future, possibly with the assistance of the utilities involved, staff consider consolidating the application to about 30 rather than 190 questions as she feels it will be very difficult for small businesses to allocate the time that would be required to fill out the application.

 

Chairman Holt thanked staff for the presentation and for answering the questions and said that he echoed Ms. Vanouse’s concern about the number of questions in the application, especially for small businesses, and also suggested that, going forward, staff should work on reducing the number of questions on the application. 

 

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

 

            RESOLVED, That the Economic Development Power Allocation Board hereby approves the form and content of the Recharge New York application, as described herein and as set forth in Exhibit “A,” for use in administering the Recharge New York power program, whether used as a stand-alone application or in conjunction with a consolidated application structure used to support broader State economic development initiatives, and be if further

 

RESOLVED, That the Economic Development Power Allocation Board hereby approves that the application for Recharge New York power allocations be made available commencing September 27, 2011.

 

 

Exhibit A – Under Separate Cover