Executive Speeches

Excerpts from remarks of Roger B. Kelley, president and chief executive officer of the New York Power Authority, at announcement by Governor Eliot Spitzer of an Agreement in Principle on terms of a new power-supply contract between the Power Authority and Alcoa, Massena, New York.

December 21, 2007

Thank you, Governor Spitzer.  And thanks to all of you for joining us on this very significant and auspicious day for Massena and for the economy of the North Country.

The agreement in principle that we announce today creates the very real prospect that Alcoa will continue as the mainstay of this region’s economy well into the future.  We all also believe that the concerns of recent years regarding Alcoa’s future here in the North Country can now give way to a new atmosphere of hope and promise.

Our thanks to Governor Spitzer and his team, who, working together with our team from NYPA, helped us to reach a fair and comprehensive agreement with our negotiating partners at Alcoa  in the face of some very complex issues and challenges.

The agreement in principle also reflects the constructive involvement of local elected officials and business and union leaders, all of whom recognized and reminded us of the critical importance of keeping Alcoa in Massena.

We have always shared a commitment to finding the common ground that could lead to a new long-term contract with Alcoa for hydropower from the St. Lawrence-FDR project.

A prime objective for NYPA has been to ensure that a new contract would reflect  the extraordinary value of this power—among the nation’s least expensive for businesses—as a resource for preserving jobs and promoting investment.

That objective has been met.

The new contract would—for the first time—establish firm job commitments that Alcoa must meet in return for the power—1,065 initially and at least 900 over the 30-year contract term.  This is similar to the arrangements we now have with virtually all of our other business customers throughout the state.

In another significant new approach, the rates that Alcoa would pay for the power would be linked to the price for aluminum on the world market.  In effect, NYPA and Alcoa would share in the benefits of higher market prices—and the company would have some protection against lower prices for its products.

Beyond these features, we are, of course, extremely pleased by the provisions that call for the $600 million investment by Alcoa to rebuild the East Plant and for the company’s willingness to establish a $10 million North Country Economic Development Fund.

The North Country and Alcoa both occupy special places in the Power Authority’s history.

The St. Lawrence-FDR project was our first generating facility, and Alcoa was our first customer.

We look forward to continuing to work with Governor Spitzer, members of his administration and Alcoa to make the new contract a reality and to ensure that Alcoa remains an essential and thriving North Country institution for many years to come.

Thank you—and enjoy the holidays.