Executive Speeches

Remarks of Eugene W. Zeltmann, President and Chief Executive Officer of the New York Power Authority, at the Staten Island Economic Development Corporation Annual Conference, Staten Island, New York

April 26, 2005

I’m delighted to be here, and proud that my organization—the New York Power Authority—is the presenting sponsor of this all-important conference.

Thanks to the vision and commitment of the Staten Island Economic Development Corporation, this event over the past seven years has become a fixture on the Island’s annual calendar.

The Power Authority is honored to be part of it—and we’re particularly pleased that New York’s Lieutenant Governor—Mary Donohue—has accepted our invitation to speak at today’s lunchtime session. I think her willingness to join us underscores the significance both of this conference and of this great borough.

It’s interesting to note that Henry Hudson named Staten Island—which means “Island of the State”—after the States General. That was Holland’s governing body, which later codified rules for carrying on business in New Amsterdam.

Among those rules was the radical notion that all citizens were to be equal before the law.  This meant that no matter your race, creed or ethnic group, you would be treated with the same tolerance as a Dutch citizen and member of the Dutch Reformed Church—the prevailing religious institution here at the time.

Whether this was the origin of New York City’s cosmopolitan and freethinking culture—as some historians suggest—I don’t know. But a case can be made that capitalism, freedom and democracy—the three pillars of the American system—were erected right here.

Those bedrock principles have served this city well for more than 350 years—through times of incredible growth and awesome challenge. We have only recently passed through a time of challenge. And now there are clear signs economic growth and revival—for the city and for Staten Island.

The efforts and policies of Governor Pataki and Mayor Bloomberg—and of Borough President Molinaro—are helping to produce a promising influx of new businesses and jobs. Here on the Island, new zoning policies—implemented or planned—will provide the basis for appropriate future development. Advances in other areas—from education to the environment—are evident.

I can tell you that a number of the Power Authority’s activities on Staten Island are a direct result of the Borough President’s suggestions—and of his involvement in implementing the proposals. We value his cooperation and his counsel.

The Power Authority’s role on Staten Island—and throughout the city—takes various forms.  But none is more important than providing economical electricity for government facilities and purposes such as schools and other public buildings, police stations and firehouses, street lights and mass transit—including the Staten Island Railway.

In fact, we’re the nation’s largest supplier of electricity for mass transportation. The electricity we provide to various public entities reduces the cost of government by hundreds of millions of dollars each year—and thus eases the burden on taxpayers.

We recently concluded new power-supply agreements with the New York City government, the MTA and our other large public customers in the city that will run through 2017.

The contracts represent a new era of collaboration in our relationship with the customers. They’ll be actively involved in scrutinizing our costs, operations and decisions. They’ll participate in our planning processes. And they’ll be able to choose from among various payment options for the electricity and different levels of risk with respect to potential price volatility.

We’re extremely pleased that these important customers have elected to stay with us at a time of competition and choice in the power industry.

For all this, it’s not just public entities that benefit from low-cost power that we supply on Staten Island and throughout the city. We also serve businesses and not-for-profit organizations under various initiatives, including Governor Pataki’s highly successful Power for Jobs program. Together, these efforts secure about 120,000 jobs in the city—and more than 400,000 statewide.

One Staten Island success story is Visy Paper—a division of Australia’s Pratt Industries, the world’s largest privately held paper and packaging company.

We’ve supplied low-cost electricity to Visy Paper’s waste paper recycling plant in Travis through the New York City Public Utility Service since 2001. The allocation will increase to more than 20 megawatts when the company’s new $30 million, 100,000-square-foot corrugating facility is completed. Visy will provide about 125 new jobs with the expansion—and that’s in addition to the 160 jobs linked to the current operation.

Another essential Staten Island business that receives economical electricity from the Power Authority is New York Container Terminal—previously known as Howland Hook.

This vast complex—which takes in nearly 200 acres along the Arthur Kill—stands on the site of a long-abandoned Procter and Gamble factory that once produced Ivory Soap.

We approved a 2.5-megawatt power allocation last year—through the city Public Utility Service—to fuel an expansion that will boost the number of permanent jobs at the terminal from 470 to 610. We estimate that the lower-cost power will save about $900,000 a year on the facility’s electric bill.

The expansion involves dredging the harbor channels, lengthening the piers by 500 feet to handle larger vessels and improving land transportation connections. These include critical rail infrastructure that will extend south to Travis to serve commercial and manufacturing activities on the Island’s west shore.

A significant part of our allocation will be used to power the massive electric cranes that load and unload the containers. Four new cranes have been added to the previous five at a cost of $26.5 million to handle the larger vessels that will berth at the terminal. As our allocations for the Staten Island companies show, a reliable, economical power supply is critical to economic growth. Yet, with the world’s demand for energy dramatically increasing, we face a situation in which the limits on crucial oil and natural gas supplies—and the resulting price volatility—are becoming ever more apparent.

All of this brings new urgency to efforts to use energy more efficiently, develop clean, renewable sources and cut our reliance on oil for transportation.

In 2001, Governor Pataki issued Executive Order 111—which set ambitious goals for state entities in each of these areas. And last fall—acting on a proposal by the Governor—the Public Service Commission ordered that at least 25 percent of the state’s electricity come from renewable resources by 2013.

The Power Authority’s statewide initiatives to save energy and demonstrate new sources have made us a national leader in these fields. And our new agreements with the government customers call for us to invest up to $100 million each year in energy-efficiency and clean-energy projects in the city. Staten Island has already directly benefited from a number of our energy-efficiency efforts.

We’ve invested nearly $20 million in completed energy-efficiency projects at more than 60 public facilities on the Island, including Borough Hall, numerous public schools, the 120th and 122nd police precinct station houses, South Beach Psychiatric Center and the Castleton and Yukon bus depots. Our Staten Island projects reduce electric bills by about $2 million a year while cutting greenhouse-gas emissions in the bargain.

Now, we’re moving forward with two new local projects that will provide additional economic and environmental benefits.

In February—at the Borough President’s request—we provided $400,000 to St. Vincent’s Hospital for installation of an automated energy management and control system. This promises to make the staff and patients more comfortable while saving about $90,000 in annual costs for heating, ventilation and air-conditioning.

At Susan E. Wagner High School, we’re overseeing installation of new efficient lighting in the auditorium—and theatrical lighting for the stage. This project was made possible by $350,000 in grants obtained by Senator John Marchi and City Councilman Jim Oddo.

Just this month, we’ve taken a somewhat different tack by donating $1,500 to the Staten Island Zoo to expand its programs to teach visitors—especially children—about the importance of energy efficiency and how they can help to save energy.  We’d previously provided $1,000 for this purpose. The thinking here is that if we can get the message out to these kids now, they’ll be more responsible adults when it comes to energy use.

In addition to projects like these, the Power Authority has removed polluting coal furnaces at five public schools on Staten Island—and more than 70 others throughout the city—and installed clean new boilers fueled by natural gas or oil. And—as part of another citywide initiative—we’ve replaced some 5,000 refrigerators in public housing apartments on the Island with units that use as little as one-third the electricity.

These programs to save energy and improve the environment are complemented by the Power Authority’s role in promoting new energy technologies.

As a former chemist, I’m particularly intrigued by the potential of fuel cells—which produce electricity through a chemical reaction that doesn’t involve combustion and emits only water vapor.

At the Oakwood Beach wastewater treatment plant here on Staten Island, we’ve installed a fuel cell power plant that runs on gas that’s a byproduct of the treatment process—the same gas that used to be flared off into the air. So we’re harnessing a free source of renewable energy while improving air quality.

The Oakwood Beach fuel cell is among eight that we’ve installed at wastewater treatment plants in the city. Besides avoiding the need to flare the gas, they provide further environmental benefits by displacing generation from fossil-fueled power plants.

Overall, we own and operate 12 fuel cells—including one that runs on natural gas at the Central Park police station. After the big blackout of 2003, the Economist magazine observed that Central Park might have been the safest place in the city because the fuel cell—which is independent of the power system—kept right on operating.

The Power Authority has also installed 18 solar power projects at various locations throughout the state. These include one of the world’s largest solar units—at the Gun Hill bus depot in the Bronx. This year, we’re counting on the sun to shine as well on Staten Island, where we’re planning to install solar projects at PS 13 and PS 14.

As I’ve indicated, clean transportation is another top priority for the Authority as we work to cut dependence on oil, clean the air and strengthen energy security. We’ve helped to put more than 700 electric and hybrid-electric vehicles on the road in our fleet and those of others. Six of those vehicles are in service on Staten Island at Midland Beach Park, Greenwood Cemetery, the Staten Island Zoo and the College of Staten Island.

While on the subject of transportation, I should also mention the recent expansion of the Power Authority’s Clean School Bus Program here and in other parts of New York City. We now plan to install controls to cut harmful diesel emissions on as many as 2,000 city school buses. That’s double the original target.

Also as part of the program, we’re helping to provide cleaner fuel for more than 3,000 school buses throughout the city—several hundred of them on the Island. The health of our children—and the quality of our air—will be further protected through a related project by the New York State Energy Research and Development Authority.

I know I’ve given you quite a list of programs that the Power Authority is pursuing on Staten Island. While the details differ, we seek in each case to bring major benefits to the Island—whether through saving money for taxpayers, strengthening the economy or improving the environment.

In some instances, the benefits are multi-faceted. In others, they contribute as well to important national goals such as cutting our reliance on imported oil. But— regardless of the specifics—we are committed to working with your public officials and with each of you to help make Staten Island an even better place to live and to do business.

Thank you.