New York Power Authority Trustees Approve 2011 Budget: Zero-Growth Budget Demonstrates Commitment To Fiscal Discipline
December 13, 2010
FOR IMMEDIATE RELEASE
WHITE PLAINS—The New York Power Authority (NYPA) today released its 2011 budget that reflects its recognition of the state’s dire economic position with a zero-growth budget for the day-to-day operations and maintenance of the Power Authority, while maintaining its commitment to investments in energy efficiency and infrastructure improvements.
“This budget reflects the need to balance NYPA’s critical role in providing affordable and clean energy and promoting economic development and clean energy technologies throughout the state with the reality of the current economic crisis,” said Michael J. Townsend, chairman, NYPA.
“Given the severe economic crisis across the state and nation, this 2011 budget demonstrates NYPA’s commitment to managing its operations in a fiscally responsible and austere manner,” said Richard M. Kessel, president and chief executive officer, NYPA. “We also will continue to focus on supporting the state’s clean energy economy through energy efficiency efforts and renewable energy projects while maintaining the integrity and reliability of our energy generation and transmission infrastructure.”
The Power Authority, which is the nation’s largest state public power organization, operates 17 generating facilities and more than 1,400 circuit-miles of transmission lines. It generates nearly 20 percent of the total power produced in New York State and does so without use of any tax revenue or state credit.
At its monthly meeting, the NYPA Board of Trustees voted to approve the Power Authority’s 2011 annual budget, which includes outlays for capital investments; energy services funding; and operation and maintenance (O&M).
Holding the Line on Operations and Maintenance:
The NYPA 2011 budget supporting the O&M needs of the Authority remains flat from the previous year at $312.3 million. This flat rate includes the absorption of significant increases of $6.5 million for pension and medical insurance benefits. In addition, the budget reflects a small increase in staffing levels (0.6%), supporting several new positions for succession planning which will be offset by attrition and other spending reductions. Also included in the total O&M budget are planned major maintenance activities at some of NYPA’s generating and transmission facilities.
In addition to continuing to support the ongoing operations of the Power Authority, the zero-growth O&M budget will absorb costs associated with a new environmental justice program, a comprehensive emergency management plan and new energy commodity risk software.
Commitment to Clean Energy:
The NYPA 2011 budget underscores its ongoing commitment to expanding its energy efficiency and clean energy initiatives. NYPA plans to invest $150 million in 2011 in clean energy projects, an increase of nearly $20 million or 15 percent over last year’s budget level.
To date, NYPA’s energy efficiency projects save New York taxpayers over $129 millionevery year by cutting energy costs at thousands of public facilities, including local, county and state government facilities, public schools and state university campuses. NYPA’s energy efficiency investments are paid for out of the energy savings from these investments.
NYPA also is advancing efforts that will put New York State at the forefront of wind energy with its Great Lakes Offshore Wind project and solar development with its 100 megawatt solar project, thus maintaining the state’s position as a leader in the clean energy economy. Kessel noted that these efforts are in line with the state’s 45 by 15 initiative to meet 45 percent of the state’s electricity needs by 2015 through energy efficiency and clean energy and with the Renewable Portfolio Standard, with a goal of increasing the proportion of renewable electricity used by New York consumers to at least 30 percent by 2015.
Investing in Critical Infrastructure:
The 2011 NYPA budget reflects NYPA’s financial commitment to improving the reliability and extending the life of critical infrastructure at its facilities. These Life Extension and Modernization (LEM) projects will improve efficiency and ensure abundant supplies of clean, low-cost electricity well into the 21st century. During 2011, NYPA expects to undertake significant capital projects at its Lewiston Pump Generating facility, St. Lawrence project, and maintenance and improvement work on its Moses-Adirondack transmission line and at its switchyards at its Clark Energy Center as well as at its major hydropower facilities.
The capital budget will total $178 million, a decrease of over nine percent from the previous year. This decrease is attributed to the completion of the LEM project at the Power Authority’s Blenheim Gilboa Pumped Storage Power Project earlier this year and the distribution over four years of the cost estimates for preliminary design and licensing expenses for the NYPA transmission initiative. NYPA is continuing to engage in preliminary engineering work for the construction and/or upgrade of transmission infrastructure to allow for the delivery of Canadian hydropower into New York State and to enable renewable energy development, reduce system congestion and to adapt to smart grid technologies.
“NYPA is committed to maintaining our role as a power generation and transmission leader in New York State,” Kessel said. “We will continue to focus our efforts on providing reliable, clean energy in support of economic development and the growth of green energy across the state.”
Four-Year Financial Plan:
In addition to the expenditure budget, NYPA trustees approved a four-year financial plan that forecasts expected net income of $179 million for 2011 and expected average net income of $265 million for the entire four-year period 2011 through 2014. 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 Authority’s investments.
The Power Authority uses this net income to reinvest in energy infrastructure, retire debt and support economic development.
Trustee Item: Filing of the 2011 - 2014 Four-Year Financial Plan Pursuant to Regulations of the Office of the State Comptroller
Trustee Item: 2011 Operating Budget and Operation and Maintenance, Capital, and Energy Services Budgets
New York Power Authority 2011 – 2014 Four-Year Financial Plan
Additional financial information regarding NYPA is available on its website www.nypa.gov.
■ The New York Power Authority 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 public power organization, with 17 generating facilities in various parts of New York State and more than 1,400 circuit-miles of transmission lines. ■ Approximately 80 percent of the electricity it produces is clean renewable hydropower. Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state. ■For more information, www.nypa.gov.