New York Power Authority Trustees Approve 2009
Operating Budget Holds to
Inflationary Increases and Invests in Clean Energy Initiatives
December 18, 2008
FOR IMMEDIATE RELEASE
WHITE PLAINS – The New York Power Authority (NYPA)
today released its 2009 budget which holds operational spending in
line with inflation, controls operating expenses through prudent
financial management, invests in infrastructure and energy
efficiency initiatives that will benefit taxpayers with lower energy
costs and a cleaner, healthier environment and cuts discretionary
expenditures by ten percent in line with Governor Paterson’s
directive to state agencies to reduce costs.
“The 2009 Power Authority budget demonstrates our
commitment to maintaining a lean operating organization while
investing in our energy future with funding for critical
infrastructure improvements and clean energy initiatives that will
spur green collar jobs across the state,” said Richard M. Kessel,
NYPA president and chief executive officer.
The Power Authority, which is the nation’s largest
state-owned power organization, operates 18 generating facilities
and more than 1,400 circuit-miles of transmission lines. It
generates more than 20 percent of the total power produced in New
York State and does so without use of any tax revenue or state
At its monthly meeting, which was held Tuesday in
Utica, the NYPA Board of Trustees voted to approve the Power
Authority’s 2009 annual budget, which includes outlays for operation
and maintenance (O&M); capital spending; energy services funding;
and fuel costs. In addition, the trustees approved a four-year
financial plan that forecasts $173 million in expected net revenues
for 2009 for the Power Authority.
Holding the Line on Operating Increases:
Notably, due to NYPA’s continuing commitment to
controlled operational growth and disciplined financial oversight,
funding for O&M will be held to a 3.2 percent increase above 2008
The increase is necessary and crucial in addressing
required investments to maintain reliability including: additional
planned maintenance outage expenses for NYPA’s small clean power
plants in New York City; targeted budget increases in other NYPA
operating and transmission facilities across the state; and wage and
benefits cost of living adjustments.
These increases will be offset by the commitment by
NYPA to cut by 10 percent all discretionary spending, including
travel, books and publications, seminars and conferences, office
supplies, blackberries and cell phones and consultants.
Investing in Critical Infrastructure:
The 2009 NYPA budget reflects an increase in NYPA’s
financial commitment to improving and extending the life of critical
infrastructure at its facilities in Niagara, St. Lawrence, Blenheim-Gilboa
and other essential transmission improvements. These Life Extension
and Modernization (LEM) projects will improve efficiency and ensure
abundant supplies of clean, low-cost electricity well into the 21st
Specifically, the capital budget, which reflects a
$42.1 million increase, includes $20.5 million and $19.5 million,
respectively, for the Blenheim-Gilboa Pumped Storage Facility and
the St. Lawrence-Franklin D. Roosevelt Power Project’s life
extension projects and $21.4 million for commitments made in
previous years related to the federal relicensing agreements for the
Niagara and St. Lawrence plants.
“Reliable and abundant electricity is the backbone
of the state’s economy,” Kessel said. “As the owner of nearly
one-third of the state’s transmission system and the generator of
much of the state electrical power, it is critical that we maintain
and improve the infrastructure to support and grow our economy.”
Commitment to Clean Energy:
In addition, the NYPA 2009 budget underscores its
commitment to expanding its energy efficiency and clean energy
initiatives. NYPA will invest up to $120.6 million in 2009 in clean
energy projects, an increase of $15.8 million or 15.1 percent over
last year’s level.
Kessel noted that this significant financial
commitment is in line with Governor Paterson’s 15 by 15 initiative
to cut electricity use by 15 percent by 2015 and his commitment to a
Renewable Portfolio Standard, with a goal of increasing the
proportion of renewable electricity used by New York consumers to at
least 25 percent by 2013.
To date, NYPA’s energy efficiency projects save New
York taxpayers over $110 million every year by cutting energy costs
at thousands of public facilities, including local, county and state
government facilities, public schools and state university campuses.
Leveling Fuel Expenditures:
The 2009 NYPA budget provides $543.5 million for
fuel expenses, a decrease of $1.7 million (0.3 percent) from 2008.
This is a cash budget reflecting planned fossil-fuel purchases in
2009 for NYPA facilities at the Charles Poletti Power Project in
Queens, the Richard M. Flynn Power Project in Suffolk County, the
Small Clean Power Plants, and the 500 Megawatt plant in Queens.
Due to projected lower commodity prices and the
reduction in planned consumption from slightly lower generation at
NYPA’s fossil-fuel facilities, the 2009 NYPA budget anticipates a
decrease in natural gas expenditures of $10.2 million. A decrease
of $24.1 million in oil expenditures primarily reflects the
projected 2010 shutdown of the Poletti Project in Astoria.
These savings will be offset by new costs
associated with the implementation of the Regional Greenhouse Gas
initiative (RGGI). The 2009 Budget projects spending of up to $32.6
million for the cost of emission credits NYPA will purchase given
the 2009 forecasted generation.
RGGI is a ten-state agreement to reduce greenhouse
gas emissions from power plants by means of a cap and trade system.
Carbon dioxide, or CO2, is the principal greenhouse gas emitted by
electric power generation and any other activity involving fossil
fuel combustion. Proceeds from the purchase of emissions credits
will fund additional renewable energy and greenhouse gas reduction
programs throughout New York State.
Four-Year Financial Plan:
In addition to the expenditure budget, NYPA
trustees approved a four-year financial plan that forecasts expected
net revenues of $173 million for 2009 and expected average net
revenues of $234 million for the entire four-year period 2009
through 2012. NYPA revenues include: receipts from customers; sales
by the Authority’s projects into the New York Independent System
Operator market; and income from other sources including the
Trustee Item: Approved Budget and Financial
Plan Information Pursuant to Regulations of the Office of the State
Trustee Item: 2009 Operation and Maintenance,
Capital, Energy Services and Fuel Expenditure Budgets
Additional financial information regarding NYPA is available on its
■ 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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