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N.Y. Power Authority Trustees Authorize November Public Hearing on Hydropower Contract with ALCOA
Completion of Contract Negotiations in Support of the Company's Long-Term Commitment to Northern New York

Contact:
Michael Saltzman
914-390-8181
michael.saltzman@nypa.gov

September 23, 2008

FOR IMMEDIATE RELEASE

WHITE PLAINS—The New York Power Authority (NYPA) today announced a public hearing on the proposed power supply contract with Alcoa for the aluminum manufacturer’s continued long-term use of low-cost hydropower at its two facilities in Massena.

The public hearing is set for 10 a.m. on November 6, 2008 at the Frank S. McCullough, Jr., Hawkins Point Visitors Center and Boat Launch in Massena, New York.

“The St. Lawrence-Franklin D. Roosevelt Power Project is a cornerstone of Northern New York’s economy, as demonstrated by the negotiation of this low-cost power contract with Alcoa,” said Governor David A. Paterson. “It is critical that New York State continue to maximize the value of available power from its power generating plants for family-supporting jobs and capital investments.”

“The negotiation of the proposed contract with Alcoa and today’s action by the NYPA Trustees keeps us on track toward assuring that the company—the Power Authority’s first power customer and one of its largest—remains an anchor for Northern New York’s economy for decades to come,” said Gil C. Quiniones, NYPA acting chief operating officer. “This has long been a top priority for the region and New York State, and under Governor Paterson’s leadership we’re making this a reality.”

Under the 30-year contract, which is to commence on July 1, 2013, Alcoa has committed to the initial retention of 1,065 employees starting in 2008, with the company pledging to maintain a work force of at least 900 employees over the contract term and invest at least $600 million for the modernization of the Massena East smelter. There will also be an option under certain circumstances for an additional 10-year extension beyond 2043 when the base contract period expires.

“There could be no better news for the future security of Northern New York’s economic base than the negotiation of the proposed contract with Alcoa,” said Judge Eugene L. Nicandri of Massena, who became a Power Authority trustee only last month following his appointment by Governor Paterson to the seven-member board. “I’m delighted that one of the first items I had a chance to vote on as a new member of the NYPA board was this procedural action authorizing a public hearing on the Alcoa contract. This is a pivotal step toward implementing the much anticipated agreement for significant long-term job commitments and capital investments.”   

“There is no doubt about the imperative of low-cost hydropower for the continued vitality of the West and East Plants of our Massena Operations,” said Bernt Reitan, Alcoa Executive Vice President and Group President, Global Primary Products. “I want to thank Governor Paterson and the Power Authority for this successful outcome, which is one of the most critical elements as we work toward obtaining approval from the Alcoa Board of Directors for a major renovation of the East Plant. That multi-million dollar investment would assure that Alcoa remains an essential and thriving North Country institution for many years to come.”

The current contracts with Alcoa, dated Aug. 24, 1981, expire on June 30, 2013. Alcoa signed its original contract with NYPA in July 1955, more than three years before the St. Lawrence-FDR project—the Power Authority’s first generating plant—began producing electricity. 

Alcoa will continue to benefit under the new contract from its current allocation of 478 megawatts (mw) of hydropower (374 mw of firm power and 104 mw of interruptible power), accounting for approximately 60 percent of the St. Lawrence-FDR project’s generating output.

Alcoa will provide $10 million for a North Country Economic Development Fund (NCEDF) within 90 days of the date on which its board of directors approves the rebuilding of the Massena East smelter. The NCEDF, which would be jointly administered by NYPA and another entity specified by New York State, will be used exclusively for creating jobs and capital investments in St. Lawrence, Franklin, Essex, Jefferson, Lewis, Hamilton and Herkimer counties and on the Akwasasne Mohawk Reservation.  

Following the November hearing and the evaluation of the public comments, the proposed contract will be submitted to the NYPA trustees for their approval and then be forwarded to Governor Paterson for his authorization.

 

   About NYPA:

■    NYPA uses no tax money or state credit.  It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity.  ■    NYPA is a leader in promoting energy-efficiency, new energy technologies and electric transportation initiatives.  ■    It is the nation’s largest state-owned electric utility, with 18 generating facilities in various parts of the state and more than 1,400 circuit-miles of transmission lines.

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