MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

December 15, 2009

 

 

Table of Contents

 

                Subject                                                                                                                                  Page No.               Exhibit

 

1.             Consent Agenda:                                                                                                                               

a.       Minutes of the Regular Meeting held on September 29, 2009                                               

b.       Power for Jobs Program – Extended Benefits, Exhibit - “1b-A”; “1b-B-1”; “1b-B-2”

        Resolution                                                                                                                                                        

 

c.        Request to Approve Extensions to the Terms of  Service for 51 Hydropower Customers, Exhibit - “1c-A”

        Resolution

  

d.       Transfer of Industrial Power                                                                                  

 

e.        Extension of Niagara Frontier Transportation Authority Contracts, Exhibition - “1e-A” 

        Resolution  

 

f.        Proposed Contract for Sale of Hydropower to Long Island Power Authority to Benefit Brookhaven                                            

National Laboratory – Notice of Public Hearing, Exhibit“1f-A”; “1f-A-1”

Resolution   

 

g.       Energy Cost Savings Benefit Programs – Service Tariff Amendments – Notice of Proposed Rule Making, Exhibit - “1g-A” – “1g-E”

        Resolution

     

h.       Decrease in Westchester County Governmental Customer Rates – Notice of Adoption, Exhibit - “1h-A”

        Resolution   

 

i.         Procurement (Services) Contracts – Business Units and  Facilities – Awards, Exhibit - “1i-A”

        Resolution

   

 

Discussion Agenda:

2.             Q&A on Reports from:

a.       President and Chief Executive Officer                                                                

b.       Chief Operating Officer                                                                                          

c.        Chief Financial Officer, Exhibit - “2c-A”
Resolution

                                                                                                 

3.             Enhanced Energy Services Programs, Exhibit - “3-A”

Resolution

4.             Sustainability Action Plan Exhibit - “4-A”

Resolution

5.           Membership in Electric Power Research Institute – Extension

           Resolution                                                                              

   

6.           Niagara Power Project – 115 kV Circuit Breaker Upgrade  Project – Capital Expenditure Authorization and  Contract Award                                                                   

   

7.           2010 Operating Plan – Operation and Maintenance,  Capital, Energy Services and Fuel Budgets, Exhibit - “7-A”; “7-B”

           Resolution                                                                                

     

8.             Approved Budget and Four-Year Financial Plan  Information Pursuant to Regulations of the Office of the State Comptroller, Exhibit - “8-A”; 8-B”

            Resolution                                                                                  

 

9.             Other Business – Introduction of Rocco Iannarelli                                                              

10.          Resolution – Arnold M. Bellis                                                                                                    

11.          Motion to Conduct an Executive Session                                                                                                                    

12.          Motion to Resume Meeting in Open Session                                                                         

13.          Election of Executive Vice President and Chief Financial Officer                                     

Resolution

 

14.        Amendments to the Authority’s By-laws, Exhibit - “14-A”; “14-A-1”

           Resolution                                                                                                                                                                

 

15.          Use of Net Revenues Produced by Sale of Expansion  Power as Industrial Incentive Awards                                           

Resolution

 

16.          Next Meeting                                                                                                                              

Closing                                                                                                                                           

 


 

Minutes of the Regular Meeting of the Power Authority of the State of New York held at the Hilton Long Island, 598 Broad Hollow Road, Melville, New York, at 11:00 a.m.

Members of the Board present were:

                                Michael J. Townsend, Chairman

                                Jonathan F. Foster, Vice Chairman

                                D. Patrick Curley, Trustee

                                Eugene L. Nicandri, Trustee

 

                                Elise M. Cusack, Trustee – Excused

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Richard M. Kessel                               President and Chief Executive Officer

Gil C. Quiniones                                   Chief Operating Officer

Terryl Brown                                        Executive Vice President and General Counsel

Edward A. Welz                                   Executive Vice President and Chief Engineer – Power Supply

Thomas P.  Antenucci                        Senior Vice President – Power Supply Support Services

Bert J. Cunningham                            Senior Vice President – Corporate Communications

James F. Pasquale                               Senior Vice President – Marketing and Economic Development

Donald A. Russak                               Senior Vice President – Corporate Planning and Finance

Joan Tursi                                             Senior Vice President – Enterprise Shared Services

Arnold M. Bellis                                   Vice President – Controller – WPO

John L. Canale                                     Vice President – Project Management

Patricia Leto                                         Vice President – Procurement

Francine Evans                                    Chief of Staff – President’s Office

Karen Delince                                      Corporate Secretary

Robert Hopkins                                   Director – Budgets – WPO

Michael Huvane                                  Director – Business Muni and Coop Marketing and Economic

                                                                     Development – WPO

Lisa A. Cole                                          Director – Financial Planning – WPO

Marilyn J. Brown                                 Manager – Market Analysis and Tariff Administration – WPO

Caroline G. Garcia                               Manager – Contract Administration – Power Contract and

                                                                   Supply Planning – WPO

Anthony Savino                                  Manager – Business Power Allocations and Compliance – WPO

Gary Levenson                                    Principal Attorney I – Litigation – WPO

Angela D. Graves                                 Deputy Corporate Secretary

Mary Jean Frank                                 Associate Corporate Secretary
Lorna M. Johnson                               Assistant Corporate Secretary

Christine Lally                                      Senior Business Planner – Financial Planning – WPO

Julieanne Sullivan                               Account Executive – Business Muni and Coop Marketing and Economic

                                                                     Development – WPO

Mark Schwartzburt                             Marketing Analysis – Business Power Allocation, Compliance and Muni and

                                                                     Coop Marketing – WPO

Timothy Muldoon                               Marketing Representative – Business Power Allocation, Compliance and Muni

                                                                     and Coop Marketing – WPO

Diamond Kongoletos                         County Energy Services, LLC

Todd Stebbins                                      Environmental Affairs – Long Island Power Authority

Bill Miller                                               Principal – TRC

S. R. Scroggins                                      Managing Director – Russell Reynolds Associates

C. Solnik                                                Reporter – Long Island Business News

Deb Cotton                                           Community Relations Manager

Elizabeth McCarthy

 


 

Chairman Townsend presided over the meeting.  Corporate Secretary Delince kept the Minutes.


 

1.                     Consent Agenda

                Trustee D. Patrick Curley recused himself from the vote on item 1c (Request to Approve Extensions to the Terms of Service for 51 Hydropower Customers) with respect to Brunner International, Inc. and International Imaging Materials, Inc.  President Richard M. Kessel said that in the interest of full disclosure he wanted to mention that a number of the hydropower customers had relationships with the Long Island Power Authority, but that he had no conflicts with respect to any of them.

                In response to a question from Vice Chairman Jonathan Foster regarding item 1i (Procurement (Services) Contracts – Business Units and Facilities – Awards), Ms. Patricia Leto said that the $3.5 million five-year procurement contract with Over Rock, LLC was for landscaping, masonry and snow removal services at the Clarence D. Rappleyea Building in White Plains.

Chairman Michael Townsend said that the Economic Development Power Allocation Board had recommended that the Authority’s Trustees approve items 1b (Power for Jobs Program – Extended Benefits) and 1d (Transfer of Industrial Power) at their meeting of December 14, 2009.

 

  

 


 

a.       Approval of the Minutes

 

                                The Minutes of the Regular Meeting held on September 29, 2009 were unanimously adopted.


 

b.                   Power for Jobs Program – Extended Benefits

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve electricity savings reimbursement rebates for 66 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘1b-A.’  This request is to approve rebate dollars only.  Similar decisions to allow customers to receive extended benefit payments have been made at past Trustees’ Meetings.  These rebates are calculated for historical periods only. These customers have been recommended to receive such rebates by the Economic Development Power Allocation Board (‘EDPAB’).  In addition, the Trustees are requested to approve payment for PFJ Restitution to the 12 companies listed in Exhibit ‘1b-B-1.’  These companies have been evaluated for Restitution and are due a payment.

 

BACKGROUND

 

                “In July 1997, the New York State Legislature approved a program to provide low-cost power to businesses and not-for-profit corporations that agree to retain or create jobs in New York State.  In return for commitments to create or retain jobs, successful applicants received three-year contracts for PFJ electricity.

 

“The PFJ program originally made 400 megawatts (‘MW’) of power available and was to be phased in over three years.  As a result of the initial success of the program, the Legislature amended the PFJ statute to accelerate the distribution of the power and increase the size of the program to 450 MW.  In May 2000, legislation was enacted that authorized additional power to be allocated under the program.  Legislation further amended the program in July 2002.

 

                “Chapter 59 of the Laws of 2004 extended the benefits for PFJ customers whose contracts expired before the end of the program in 2005.  Such customers had to choose to receive an ‘electricity savings reimbursement’ rebate and/or a power contract extension.  The Authority was also authorized to voluntarily fund the rebates, if deemed feasible and advisable by the Trustees.

 

“PFJ customers whose contracts expired on or prior to November 30, 2004 were eligible for a rebate to the extent funded by the Authority from the date their contract expired through December 31, 2005.  Customers whose contracts expired after November 30, 2004 were eligible for rebate or contract extension, assuming funding by the Authority, from the date their contracts expired through December 31, 2005.

 

“Approved contract extensions entitled customers to receive the power from the Authority pursuant to a sale-for-resale agreement with the customer’s local utility.  Separate allocation contracts between customers and the Authority contained job commitments enforceable by the Authority.

 

“In 2005, provisions of the approved State budget extended the period PFJ customers could receive benefits until December 31, 2006.  Chapter 645 of the Laws of 2006 included provisions extending program benefits until June 30, 2007.  Chapter 89 of the Laws of 2007 included provisions extending program benefits until June 30, 2008.  Chapter 59 of the Laws of 2008 included provisions extending the program benefits until June 30, 2009.  Chapter 217 of the Laws of 2009 included provisions extending the program benefits until May 15, 2010.

 

“At its meeting of October 18, 2005, EDPAB approved criteria under which applicants whose extended benefits EDPAB had reduced for non-compliance with their job commitments could apply to have their PFJ benefits reinstated in whole or in part.  EDPAB authorized staff to create a short-form application, notify customers of the process, send customers the application and evaluate reconsideration requests based on the approved criteria. 

 

                                “PFJ Restitution was created by Chapter 645 of the Laws of 2006 that extended the PFJ program for six months to June 2007; the law states: ‘for the period beginning January 1, 2006, for recipients who choose to elect a contract extension, and whose unit cost of electricity under the contract extension exceeds the unit cost of electricity of the electric corporation, the Power Authority shall reimburse the recipient for all dollars paid in excess of the unit cost of electricity of the electric corporation.’  Customers eligible to apply for restitution are those who chose to extend their PFJ electric service contracts beyond January 1, 2007 but terminated their service on June 30, 2007 or on or after June 30, 2008.

 

DISCUSSION

 

“At its meetings on October 26 and December 14, 2009, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 66 businesses listed in Exhibit ‘1b-A.’  Collectively, these organizations have agreed to retain more than 63,000 jobs in New York State in exchange for the rebates.  The rebate program will be in effect until May 15, 2010, the program’s sunset.

 

 “The Trustees are requested to approve the payment and funding of rebates for the companies listed in Exhibit ‘1b-A’ in a total amount currently not expected to exceed $6.4 million.  Staff recommends that the Trustees authorize a withdrawal of monies from the Operating Fund for the payment of such amount, provided that such amount is not needed at the time of withdrawal for any of the purposes specified in Section 503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations, as amended and supplemented.  Staff expects to present the Trustees with requests for additional funding for rebates to the companies listed in Exhibit ‘1b-A’ in the future for other rebate months.

 

                    “Restitution is based on whether the net amount paid by the customer for PFJ service exceeded the ‘unit cost of electricity’ of the host utility over the measurement period for the same quantity of electricity.  Under current law, the measurement period begins January 1, 2006 and ends with the date that the eligible customer ceases to be in the program.

 

                                “The host utilities, in conjunction with the Authority and the Public Service Commission, determine what the otherwise applicable full-service electric rates of the host utility would have been for service throughout the measurement period, calculate what the customer charges would have been under those rates, compare that total to the total actual charges paid by the customer for PFJ and determine whether the customer had net savings overall in the PFJ program or is due a Restitution payment.

 

                                “Staff has evaluated an additional 33 customers for Restitution.  The 12 customers eligible for Restitution payment and presented for approval are listed in Exhibit ‘1b-B-1.’  The 21 customers listed in Exhibit ‘1b-B-2’ had overall PFJ program savings; therefore, no payment is required.

 

FISCAL INFORMATION

 

“Funding of rebates for the companies listed in Exhibit ‘1b-A’ is not expected to exceed $6.4 million.  Payments will be made from the Operating Fund.  To date, the Trustees have approved $196.4 million in rebates.

 

“Funding of Restitution payments for the companies listed in Exhibit ‘1b-B-1’ is not expected to exceed $1.51 million.  Payments will be made from the Operating Fund.  This is the third payment request to date, which will bring the total approved for PFJ Restitution payments to $4.28 million.  Additional requests will follow based on subsequent evaluation of other restitution-eligible customers.

 

RECOMMENDATION

 

“The Executive Vice President and Chief Financial Officer and the Senior Vice President – Marketing and Economic Development  recommend that the Trustees approve the payment of electricity savings reimbursements to the Power for Jobs customers listed in Exhibit ‘1b-A’ and payment of Power for Jobs Restitution to the customers listed in Exhibit ‘1b-B-1.’

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel and I concur in the recommendation.”

 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

WHEREAS, the Economic Development Power Allocation Board (“EDPAB”) has recommended that the Authority approve electricity savings reimbursements to the Power for Jobs (“PFJ”) customers listed in Exhibit “1b-A”;

 

NOW THEREFORE BE IT RESOLVED, That to implement such EDPAB recommendations, the Authority hereby approves the payment of electricity savings reimbursements to the companies listed in Exhibit “1b-A,” and that the Authority finds that such payments for electricity savings reimbursements are in all respects reasonable, consistent with the requirements of the PFJ program and in the public interest; and be it further

 

RESOLVED, That based on staff’s recommendation, it is hereby authorized that payments be made for electricity savings reimbursements as described in the foregoing report of the President and Chief Executive Officer in the aggregate amount of up to $6.4 million, and it is hereby found that amounts may properly be withdrawn from the Operating Fund to fund such payments; and be it further

 

RESOLVED, That based on staff’s recommendation, it is hereby authorized that payments be made for PFJ Restitution payments as described in the foregoing report of the President and Chief Executive Officer in the aggregate amount of up to $1.51 million, and it is hereby found that amounts may properly be withdrawn from the Operating Fund to fund such payments; and be it further

 

RESOLVED, That such monies may be withdrawn pursuant to the foregoing resolution upon the certification on the date of such withdrawal by the Senior Vice President – Corporate Planning and Finance or the Treasurer that the amount to be withdrawn is not then needed for any of the purposes specified in Section 503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That the  Senior Vice President – Marketing and Economic Development or his designee be, and hereby is, authorized to negotiate and execute any and all documents necessary or desirable to effectuate the foregoing, subject to the approval of the form thereof by the Executive Vice President and General Counsel; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.


 

 


 

 


 

 


 


 

                c.             Request to Approve Extensions to the Terms of  Service for 51 Hydropower Allocations  

 

The President and Chief Executive Officer submitted the following report:

 

Summary

 

“The Trustees are requested to approve extensions to the terms of service for 10 Replacement Power (‘RP’) allocations totaling 8,780 kW and 41 Expansion Power (‘EP’) allocations totaling 69,750 kW, as listed in ‘1c-A.’  These allocations, to 42 customers, would be extended from their various current expiration dates until January 1, 2013 in the case of RP allocations, and July 1, 2013 for the EP allocations.

 

BACKGROUND

 

“Under Section 1005(13) of the Power Authority Act, the Authority may contract to allocate or reallocate directly, or by sale for resale, 250 MW of firm hydroelectric power as EP and up to 445 MW of RP to businesses in the State located within 30 miles of the Niagara Power Project, provided that the amount of EP power allocated to businesses in Chautauqua County on January 1, 1987 shall continue to be allocated in such county. 

 

                “On December 13, 2005, in keeping with the extension of the RP program beyond December 31, 2005 authorized by Chapter 313 of the Laws of 2005, the Trustees approved an extension until January 1, 2013, for all RP allocations in effect on or before July 26, 2005, the date Chapter 313 was enacted.  The Power Authority Act contained no expiration date for the EP program, but existing delivery arrangements for EP with National Grid and New York State Electric and Gas Corporation, the two upstate electric utilities whose service territories contain Authority’s EP customers, are in effect until July 1, 2013.

 

DISCUSSION

 

In early 2009, Authority staff began a project to evaluate all existing RP and EP allocations with the intent of offering customers extended terms of service beyond their current expiration dates, if warranted, based on the evaluation and ultimate approval by the Trustees.  Many Western New York companies that rely on low-cost hydropower to remain competitive have requested longer-term contracts to provide more certainty in their electricity costs.  Additionally, many RP and EP customers require a longer planning horizon for new capital investment because their capital projects and investment decisions are evaluated beyond the remaining terms of these allocations.

 

The vast majority of these allocations expire on January 1, 2013, in the case of RP, and July 1, 2013, in the case of EP.  The ongoing evaluation, expected to culminate at the end of 2009, will help determine which allocations and what terms of service will be recommended for qualified allocations beyond their 2013 expiration dates.

 

During the evaluation, 51 of the qualified allocations were identified as having expiration dates prior to January 1, 2013, in the case of RP, and July 1, 2013, in the case of EP.  The Trustees are being asked to approve extending the terms of service of these 51 allocations to provide ‘bridge’ extensions that their contract expiration dates will be align with the majority of RP and EP allocations expiring on the dates indicated above.

 

The total jobs commitment for these contracts is 11,366 jobs in exchange for 78,530 kW of hydropower, a job ratio of 145 jobs per MW.  In exchange for such bridge contract extensions, the companies will commit to the same job levels, as well as the power usage requirements of their current contracts.

 

“The Trustees have similarly extended RP and EP allocations in the past, most recently in May 2009, when 13 EP contracts that were set to expire this year were extended to July 1, 2013.

 

“In summary, the 51 allocation contract extensions, as detailed in Exhibit ‘1c-A,’ will help these customers maintain costs, remain competitive and retain jobs in Western New York in the short term.  The extensions will also provide the bridge to align these allocations with the majority of RP and EP allocations, setting the stage for the potential longer-term offering currently being evaluated.

 

                “This request was reviewed in accordance with the applicable criteria set forth in Part 460 of the Authority’s Rules and Regulations governing the Allocation of Industrial Power (21 NYCRR Part 460 (1988)).

 

RECOMMENDATION

 

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve extensions to the terms of service for 10 allocations of Replacement Power totaling 8,780 kW and 41 allocations of Expansion Power totaling 69,750 kW to the 42 companies listed in Exhibit ‘1c-A.’

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.”

 

 The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted

  

RESOLVED, That the Trustees find that staff’s review supports the extension of contracts for 8,780 kW of Replacement Power and 69,750 kW of Expansion Power, as detailed in Exhibit “1c-A,” which is hereby approved on the terms set forth in the foregoing report of the President and Chief Executive Officer; and be it further 

 

RESOLVED, That the Senior Vice President – Marketing and Economic Development, or his designee, be, and hereby is, authorized to negotiate and execute any and all documents necessary or desirable to effectuate the foregoing, subject to the approval of the form thereof by the Executive Vice President and General Counsel; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

 


 


 

d.             Transfer of Industrial Power

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

                “The Trustees are requested to approve the transfer of power allocations for 20 existing customers that have either changed their names for various business reasons and/or moved the location of their business or sought to redistribute an existing allocation to another existing customer or facility.

 

BACKGROUND

 

                “Eight companies have requested that the Authority grant approval of their requests for the continued delivery of Authority power allocations to facilities that have all gained prior approval for an allocation with pre-existing company names and/or ownership.  Ten companies have requested to transfer their allocations to other facilities.  Two allocations that were returned by former customers are requested to be transferred to two current customers by the Municipal Distribution Agency (‘MDA’) within whose territory they are located.  The reasons for such transfers are described below.  

 

“The Trustees have approved transfers of this nature at past meetings.

 

DISCUSSION

 

                “The proposed transferees are as follows:

 

A. T. Reynolds & Sons, Inc. (‘A. T. Reynolds’), in Kiamesha Lake, Sullivan County, in business for 125 years, produces high-end private-label bottled spring water at this plant.  Boreal Water Collection, Inc. acquired A. T. Reynolds’ assets in April 2009 in U. S. Bankruptcy Court.  The company will honor all of the terms and commitments of its 250 kW Power for Jobs (‘PFJ’) Extended Benefits contract for rebate from the Authority.

 

AccuMED Technologies, Inc. (‘AccuMED’), in Buffalo, Erie County, is a high-tech custom fabrics manufacturer for medical, safety, sportswear and military applications.  The Trustees extended the company’s 100 kW PFJ allocation through May 15, 2010.  AccuMED is consolidating its operations from facilities at 150 Bud-Mil Road and 160 Bud-Mil Road to just 160 Bud-Mil Road.  The company will honor all terms and commitments of its contract with the Authority.

 

American Indian Community House, Inc. (‘AICH’), in New York, New York County, is the only Indian-owned/operated Native American art and performing arts venue in New York City.  AICH moved from 708 Broadway to 11 Broadway in Manhattan and requests that its PFJ rebate benefit be transferred to the new location.  AICH will continue to honor all of the terms and commitments of its 35 kW PFJ Extended Benefits contract.

 

Chloe Foods Corporation (‘Chloe’), in Brooklyn, Kings County, manufactures nearly a thousand different food products from raw material handling, cooking, preparation and packaging to distribution.  The Trustees extended the company’s 800 kW PFJ allocation through May 15, 2010.  In May 2009, Blue Ridge Foods LLC acquired the assets and limited liability of Chloe.  The company will honor all terms and commitments of its contract with the Authority.

 

Cold Spring Harbor Laboratory (‘CSHL’), in Cold Spring Harbor, Nassau County, is a world-leading laboratory in the fields of molecular biology and genetics.  The Authority sells Municipal Distribution Agency (‘MDA’) power to the Nassau County Public Utility Agency (‘NCPUA’) for resale to customers and CSHL received a 1,200 kW allocation of MDA power. The NCPUA recently requested that the Authority approve allocating 1,000 kW of NCPUA’s unallocated block to CSHL, for a total of 2,200 kW of MDA power.  CSHL would commit to an additional 100 jobs above its current commitment of 863 jobs, if it receives this allocation increase.  The Laboratory will continue to honor all terms and commitments of its contracts.

CWR Manufacturing Corporation (‘CWR’), in East Syracuse, Onondaga County, manufactures custom cold formed fasteners.  The owners seamlessly closed the company and the same owners less some shareholders formed CWR Manufacturing of CNY, LLC, which conducts the exact same business in the same location with the same equipment.  CWR will honor the general terms and conditions of its 130 kW PFJ contract.

 

Delphi Automotive Systems, LLC (‘Delphi’), in Lockport, Niagara County, manufactures radiators, condensers and heaters.  Delphi has five Authority allocations:  14.3 MW of Expansion Power (‘EP’), 10 MW of EP, 500 kW of EP, 1 MW of Replacement Power (‘RP’) and 150 kW of PFJ rebate.  On October 5, 2009, Delphi was sold to a General Motors Company affiliate, General Motors Components Holdings LLC, through U. S. Bankruptcy Court.  The company will continue to honor all of the terms and commitments of its contracts with the Authority. 

 

Empire Merchants LLC (‘Empire’), in Astoria, Queens County, is a wholesale distributor of wine and spirits.  Empire consolidated its sorting system into its Brooklyn distribution facility and requests a transfer of 250 kW of its PFJ allocation from the Astoria facility to the Brooklyn facility, with 500 kW remaining in Astoria.  The company will continue to honor all of the terms and commitments of its 750 kW PFJ Extended Benefits contract for rebate.

 

Endicott Interconnect Technologies, Inc. (‘EIT’), in Endicott, Broome County, produces microelectronics panels and boards, and develops data processing equipment such as banking systems.  EIT requests a PFJ benefit transfer of 350 kW from its Robble Avenue location to its Clark Street location, another part of the same facility, in order to apply the benefit according to its current manufacturing needs.  EIT will continue to honor all terms and conditions of its 3.5 MW PFJ Extended Benefits contract for rebate.

 

Enidine, Inc. (‘Enidine’), in Orchard Park, Erie County, designs and manufactures shock absorption and vibration isolation devices for aerospace and industrial applications.  Enidine was awarded a 200 kW EP allocation in May 2007.  Following ITT Corporation’s acquisition of Enidine’s assets and liabilities, the company is now named ITT Enidine, Inc.  The company will continue to honor all of its commitments with the Authority. 

 

NAMIC/VA Inc., (‘NAMIC’), in Glens Falls, Warren County, designs, manufactures and markets single-patient-use medical products, primarily for diagnosing and treating atherosclerotic cardiovascular disease.  The Trustees extended the company’s 650 kW PFJ allocation through May 15, 2010.  Recently, NAMIC changed its name to Navilyst Medical Inc., with no change in ownership.  The company will continue to honor all terms and commitments of its contract with the Authority. 

 

New York Presbyterian Hospital (‘NYPH’), in New York, New York County, with more than 2,900 beds in its facilities, provides primary care services and specialties, including AIDS care, burn center, cancer care, cardiac care, children’s health, gene therapy, reproductive medicine, trauma center and women’s health.  The hospital requests that its entire 5 MW PFJ allocation benefit be transferred from its 525 E. 68th Street facility to its 622 W. 168th Street facility.  NYPH will honor all terms and commitments of its PFJ Extended Benefits for rebate contract.

 

New York University (‘NYU’), in New York, New York County, is a private, non-profit higher education corporation that is one of the largest private institutions of higher education with undergraduate and graduate studies in the U. S.  The university’s new cogeneration plant will power two of the four locations that receive PFJ Extended Benefits for rebate – 35 W. 3rd Street and 40 Washington Square.  NYU requests that two similar locations on its campus replace those locations to receive the PFJ benefits – 75 3rd Avenue and 140 E. 14th Street.  NYU will honor all terms and commitments of its 1.7 MW PFJ Extended Benefits for rebate contract.

 

Niagara Falls Water Board (‘NFWB’) in Niagara Falls, Niagara County, a public benefit corporation, owns and operates the water and wastewater treatment plants located in Niagara Falls.  NFWB has both a 2,000 kW and a 1,644 kW RP allocation.  NFWB requests a transfer of 619 kW, with 225 kW from the 2 MW allocation and 394 kW from the 1,644 kW allocation currently serving the water treatment and waste water treatment plants, respectively, to the Gorge Pumping Station owned by the corporation, located at 920 Whirlpool Avenue in Niagara Falls.  There will be no change in plant operations.  NFWB will continue to honor all contract terms and conditions.

 

Noble Metal Processing – New York, Inc. (‘Noble’), in Tonawanda, Erie County, provides laser-welded blanks to automotive original equipment manufacturers.  Noble was awarded a 250 kW RP allocation in May 2007.  DLWB, LLC purchased all of Noble’s assets and liabilities and will honor all Authority contract terms and conditions.

 

PCB Now-Tech Inc. (‘Now-Tech’), in Lackawanna, Erie County, manufactures machined components for the aerospace industry and defense industry.  Now-Tech has a 250 kW RP allocation.  The company changed its name to PCB Machining Solutions Inc., with no change in ownership.  The company will continue to honor all terms and commitments of its contract with the Authority.

 

Pepsi Cola Bottling Company of New York (‘Pepsi’), with locations in Queens, Brooklyn and the Bronx, opened a new distribution center in the Bronx as part of a major investment to remain competitive in New York.  Two facilities in the Bronx and two facilities in Brooklyn were closed due to the new distribution center.  Pepsi requests that its PFJ Extended Benefit for rebate be transferred from the closed facilities to the new distribution center.  The company will continue to honor all terms and commitments of its 2.2 MW PFJ Extended Benefits contract for rebate.

 

Plascal Corporation (‘Plascal’), in Farmingdale, Suffolk County, is a family-owned business that manufactures vinyl sheeting for numerous industrial and commercial uses.  The Authority sells MDA power to the Suffolk County Electrical Agency (‘SCEA’) for resale to customers and Plascal received an allocation of MDA power.  The SCEA voted in January to terminate Plascal’s allocation due to a breach of contract for non-payment.  The SCEA recently requested that the Authority transfer 300 kW of the newly unassigned 600 kW from Plascal to an existing customer, Air Industries Machining Corporation (‘Air Industries’).  Air Industries manufactures aircraft structural parts and assemblies for the commercial and defense aerospace industry.  Air Industries will commit to maintaining its current level of employment at its Bayshore and Hauppauge locations and will continue to honor all terms and commitments of its contracts.

 

Sleepy’s LLC (‘Sleepy’s’), in Bethpage, Nassau County, is the country’s largest specialty mattress retailer.  The Trustees extended the company’s 300 kW PFJ allocation through May 15, 2010.  Sleepy’s recently moved its corporate headquarters and Bethpage distribution center to Hicksville and requests that the allocation be transferred to the new corporate headquarters and distribution center.  The company will continue to honor all terms and commitments of its contract with the Authority.

 

Verizon Communications, Inc. (‘Verizon’), in New York, New York County, is one of the largest telecommunications companies in the nation.  Verizon moved out of its 375 Pearl Street location and moved the 1,456 employees located there to various central office buildings in Manhattan that handle switching, administrative and network services.  The company has a 5 MW PFJ rebate benefit and requests 2.5 MW be transferred to 240 E. 36th Street, 1.25 MW be transferred to 230 W. 36th Street, both in Manhattan and 1.25 MW be transferred to 111 Main Street in White Plains.  Verizon will honor all terms and commitments of its PFJ Extended Benefits contract.

 

RECOMMENDATION

 

                “The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the transfer of power allocations for eight existing customers that have changed their names or transferred their allocations for various business reasons, approve the transfer of 10 customers’ existing allocations to other existing facilities and approve the transfer of 2 unallocated blocks of power returned from former customers to 2 existing customers, while maintaining the current business operation and committing to the terms of the contracts.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.”

 


 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Authority hereby authorizes the transfers of 20 industrial power allocations in accordance with the terms described in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

e.             Extension of Niagara Frontier Transportation Authority Contracts

                               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to approve the extension of the sale of 1,000 kW of hydropower to the Niagara Frontier Transportation Authority (“NFTA”) for its light rail system and 2,300 kW of hydropower to NFTA to provide power to the Niagara Falls Air Base (“NFAB”).  The proposed letter agreement is attached as Exhibit “1e-A.”

 

BACKGROUND

 

                The Authority is currently selling up to 1,000 kW of hydropower to NFTA under a contract signed in 1990 that expired in 1994 and is renewed on a month-to-month basis.  This power is used for NFTA’s light rail system.  In 2004, the Authority began selling up to 2,300 kW of hydropower to NFTA to provide power to the NFAB as part of the Governor’s Task Force on Military Bases in New York State’s effort to preserve the base.

 

The NFAB plays a critical role in the defense of the nation while also making important contributions as one of the largest employers in Niagara County.  The base is home to the 914th Airlift Wing of the United States Air Force and the 107th Air Refueling Wing of the New York Air National Guard.  By helping to maintain low energy costs, the Authority can support vital military missions and help protect jobs in New York State from potential cutbacks or base closures.  Due in part to the Authority’s sale of hydroelectric power to it, the NFAB was removed from the U. S. Department of Defense 2005 round of targeted base closures.

 

This extension agreement provides for continuation of both services to December 31, 2014 and thereafter for successive five-year terms, unless cancelled by either party on 90 days’ notice.

 

DISCUSSION

 

The Authority currently has a contract with NFTA for 1,000 kW of hydropower that serves the light rail system in the region.  The contract allows for the sale of additional power on terms and conditions that are mutually agreeable to the Authority and NFTA.

 

New York State Public Authority Law §1005, relating to the power and duties of the Authority, states: “The authority is further authorized, to the extent it deems it necessary or desirable, to provide power and energy, as it may determine it to be available, for the use by the Niagara Frontier Transportation Authority or its subsidiary corporation.”  Thus, the sale of power for the benefit of the NFAB can be accomplished through agreement with NFTA, which owns Niagara Falls International Airport (at which the base is located) and operates the facility under a joint agreement with the military.  This extension is a housekeeping item to make the two contracts coterminous to assist in the their administration.

 

FISCAL INFORMATION

 

                NFTA and the NFAB will continue to pay all applicable monthly rates and charges as detailed by the Authority in Service Tariff No. 37.

 

RECOMMENDATION

 

The Manager – Contract Administration recommends that the Niagara Frontier Transportation Authority contracts be extended as described herein and the terms of service for the sale of power to the Niagara Frontier Transportation Authority be modified in accordance with the foregoing.

 

                The Executive Vice President and General Counsel, the Executive Vice President – Energy Marketing and Corporate Affairs, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.

 

                The following resolution, as recommended by the President and Chief Executive Office, was unanimously adopted.

 

RESOLVED, That the Authority approve the form of the proposed letter agreement for sale of hydroelectric power and energy between the Authority and the Niagara Frontier Transportation Authority, which was submitted to this meeting, and that the Authority believes such contract to be in the public interest; and be it further

 

RESOLVED, That New York State Public Authority Law §1005, which relates to the powers and duties of the New York Power Authority, states: “The authority is further authorized, to the extent it deems it necessary or desirable, to provide power and energy, as it may determine it to be available, for the use by the Niagara Frontier Transportation Authority or its subsidiary corporation”; and be it further

 

RESOLVED, That the Niagara Falls Air Base, located at facilities owned by the Niagara Frontier Transportation Authority, plays a critical role in the defense of the nation while also making important contributions to the State’s economy; and be it further

 

RESOLVED, That the Governor’s Task Force on Military Bases in New York State previously identified the power issues at Niagara Falls Air Base as a priority action item essential to the competitiveness of the base in the Base Realignment and Closure (“BRAC”) process, and be it further

 

RESOLVED, That the Senior Vice President – Marketing and Economic Development or his designee be, and hereby is, authorized to negotiate and execute, on behalf of the Authority with the Niagara Frontier Transportation Authority and delivery agents, agreements to provide power in support of the Niagara Falls Transportation Authority and the Niagara Falls Air Base as set forth in the foregoing, subject to the approval of the form thereof by the Executive Vice President and General Counsel: and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

The New York Power Authority (“NYPA”) and the Niagara Frontier Transportation Authority (“NFTA”) are parties to a February 2, 1990 agreement (“1990 Agreement”) under which NYPA sells 1,000 kW of hydropower and energy to NFTA under Service Tariff No. 37 (ST-37) for use by NFTA’s regional light rail system.

 

Under the terms of the 1990 Agreement, sales of additional amounts of power and energy may be made on terms and conditions mutually acceptable to NYPA and NFTA.  The Parties agreed on January 29, 2004 (“2004 Letter Agreement”) that the Authority would sell an additional 2,300 kW of firm power and energy for use at NFTA’s Niagara Falls International Airport to support continued operation of the Niagara Falls Air Base (“NFAB”) located at the airport. 

 

The Parties desire to continue to provide these services, and the Authority has agreed to extend both contracts. The rates, terms and conditions for such extended service will be those applicable under ST-37 as it may change from time to time. 

 

Delivery service to the NFAB will continue to be provided by Niagara Mohawk Power Corporation through its applicable tariffs.  NFTA agrees to reimburse NYPA for all costs incurred by NYPA on NFTA’s behalf in connection with the provision of electricity by NYPA to NFTA, including any charges imposed on NYPA by the New York Independent System Operator through its Open Access Transmission Tariff (or the tariff of any successor entity).

 

The extended term for the sale of the 1,000 kW and 2,300 kW allocations shall expire December 31, 2014, renewable for successive five-year terms upon mutual agreement of NYPA and NFTA. Pending such mutual agreement, service shall continue on a month-to-month basis until terminated by either party on 90 days notice.  If the NFAB permanently reduces or terminates operations at the Niagara Falls International Airport, NFTA may reduce or terminate service with respect to the allocation used at the NFAB, upon 90 days advance written notice, provided that NFTA shall be responsible for all costs associated with such service through and including the date of termination, which costs shall be billed by NYPA to NFTA when known.

 


 

If this is acceptable to your organization, please sign in the space provided below.

 

AGREED:

 

Power Authority of the State of New York

 

 

     Accepted ___________________________Date____________

 

James Pasquale           

Senior Vice President - Marketing & Economic Development

 

 

Niagara Frontier Transportation Authority

 

 

     Accepted ___________________________Date____________

                       

Lawrence M. Meckler

Executive Director

                       

 


 

 

f.             Proposed Contract for Sale of Hydropower to Long Island Power Authority to Benefit Brookhaven

               National Laboratory – Notice of Public Hearing  

 

 

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                The Trustees are requested to authorize a public hearing, pursuant to Section 1009 of the Public Authorities Law, on the proposed contract with the Long Island Power Authority (“LIPA”) for the sale of 15 MW of New York Power Authority (“NYPA”) hydropower to LIPA to be resold exclusively to the U. S. Department of Energy as owner of Brookhaven National Laboratory (“BNL” or “Brookhaven” or “the Lab”).  The form of the proposed contract with LIPA, as well as the accompanying proposed Service Tariff No. 2B, is attached as Exhibit “1f-A.” 

 

BACKGROUND

 

BNL has been receiving power from NYPA since 1982.  The current contract provides for the sale of up to 77 MW of power and associated energy.  According to BNL, the power provided by NYPA has saved the Lab more than $247 million over the course of the contract, which has allowed new cutting-edge research projects to be developed.  Such projects include the National Synchrotron Light Source, a world-class particle accelerator instrumental to developments in the nanotechnology and medical research fields, plus two other particle accelerators involved in high-energy physics research and space exploration studies, the Relativistic Heavy Ion Collider and the Alternate Gradient Synchrotron, respectively.

 

BNL, a major employer on Long Island, provides jobs for more than 3,000 employees and has an annual budget of $500 million.  The facility attracts scientists from all over the world, including many from New York research institutions and high-technology corporations.  The Lab is an important component of New York State’s economy and is key to future technology growth and high-technology infrastructure in New York.

 

Based on NYPA’s commitment of 15 MW of hydropower, BNL has begun construction of a new cutting-edge synchrotron light source to be known as the National Synchrotron Light Source II (“NSLS-II”).  The design and engineering for NSLS-II is currently proceeding.  NSLS-II is slated to be operational by 2015 and to be staffed by several hundred new Brookhaven employees.  As was previously explained to the Trustees, the research produced at Brookhaven will continue to provide substantial benefits to industries within New York State that rely on high technology.

 

The hydropower would come from NYPA’s St. Lawrence/FDR and Niagara Power Projects.  The 15 MW of power and energy under this contract comprises 14 MW of unallocated St. Lawrence/FDR Project power recaptured by NYPA in 2003 from the block sold to the Neighboring States as part of the St. Lawrence/FDR hydroelectric relicensing proceeding, and 1 MW of unallocated Niagara Project power.  None of the megawatts allocated to BNL would harm any other NYPA customer or upstate consumers.  The allocation is approved for a 15-year term.

 

In order to effectuate Brookhaven’s receipt of hydropower, the allocation will be made via a sale to LIPA for Brookhaven’s exclusive use.  LIPA is a political subdivision of the State authorized to resell such power.  This arrangement requires the Trustees’ approval to initiate the formal contract approval process as set forth in Section 1009 of the Public Authorities Law.

 

DISCUSSION

 

At their meeting of January 27, 2009, the Trustees approved commencement of negotiation of a contract with LIPA to allocate 15 MW of NYPA hydropower for BNL’s exclusive use.

 

The proposed contract for the sale of 15 MW of NYPA hydropower to LIPA exclusively for resale to BNL, including proposed Service Tariff No. 2B, has been drafted as a result of extensive negotiations with LIPA.  The 15 MW allocation would be blended with market resources to meet BNL’s requirements up to 77 MW.  In order for BNL to receive the greatest benefit from the 15 MW allocation, NYPA will partially assign and transfer its power sales obligations under the current BNL contract to LIPA.  This partial assignment and transfer will permit the sale of NYPA’s 15 MW of hydropower for resale to BNL without BNL incurring any new transmission charges.  Transmission service for this 15 MW, as well as for the remaining market-based power that NYPA procures to meet BNL’s needs, will be subject to NYPA’s existing grandfathered transmission agreements, which will continue to provide stable transmission service rates and hedges against congestion for the entirety of BNL’s load.  NYPA will function as the Load Serving Entity (“LSE”) for the entire BNL retail load.  As LSE, NYPA is responsible for all New York Independent System Operator (“NYISO”) charges arising under the NYPA/LIPA agreement.  However, NYPA will recover all NYISO charges incurred related to sales under the NYPA/LIPA agreement directly from BNL under a separate NYPA/BNL agreement.

 

Due to BNL’s internal policy limiting energy purchase contracts to terms of no more than 10 years, the proposed contract is for 10 years with an option for NYPA to extend the Agreement for an additional five years provided NYPA and LIPA receive prior authorization from BNL.  LIPA will make the necessary arrangements to resell this hydropower allocation to the Lab in accordance with the NYPA/LIPA contract.  In the event that BNL ceases to take the hydro allocation, the sale-for-resale agreement would terminate.  In addition, should NYPA attain the ability to sell hydropower directly to BNL, the sale-for-resale agreement would terminate, to be substituted by a direct sale contract.  The NYPA/LIPA contract is subject to a public hearing and approval by the Governor, as set forth in Section 1009 of the Public Authorities Law.  The NYPA/LIPA contract is also subject to approval by the State Comptroller pursuant to LIPA’s authorizing statute.

 

RECOMMENDATION

 

                The Manager – Contract Administration recommends that the Trustees authorize a public hearing on the terms of the proposed contract with the Long Island Power Authority to be held on January 19, 2010 at the Brookhaven Town Hall or at such other place and time as designated by the Chairman.  It is further recommended that, pursuant to Section 1009 of the Public Authorities Law, the Corporate Secretary be authorized to transmit copies of the proposed contract to the Governor and legislative leaders.

 

The Chief Operating Officer, the Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.

 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Trustees hereby authorize a public hearing on the terms of the proposed contract for the sale of hydropower and energy generated by the New York Power Authority to Long Island Power Authority for exclusive resale to Brookhaven National Laboratory, to be held at the Brookhaven Town Hall on January 19, 2010 or such other place as determined by the Chairman; and be it further

 

RESOLVED, That the Corporate Secretary be, and hereby is, authorized to transmit copies of the proposed contract to the Governor, the Speaker of the Assembly, the Minority Leader of the Assembly, the Chairman of the Assembly Committee on Ways and Means, the Temporary President of the Senate, the Minority Leader of the Senate and the Chairman of the Senate Finance Committee, pursuant to Section 1009 of the Public Authorities Law; and be it further

 

               

RESOLVED, That the President and Chief Executive Officer or his designee be, and hereby is, authorized, subject to the approval of the form therof by the Chief Operating Officer and the Executive Vice President and General Counsel, to enter into such other agreements and to do such other things as may be necessary or desirable to implement the contract with the Long Island Power Authority as set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

                RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

 

CONTRACT FOR THE SALE OF FIRM HYDROELECTRIC POWER AND ENERGY

FOR

RESALE TO THE BROOKHAVEN NATIONAL LABORATORY

BETWEEN

THE NEW YORK POWER AUTHORITY

AND

THE LONG ISLAND POWER AUTHORITY

 

This Contract for the Sale of Firm Hydroelectric Power and Energy for Resale to the Brookhaven National Laboratory is made and entered into as of this ____ day of __________, 2010, by and between the Power Authority of the State of New York, created pursuant to Chapter 772 of the New York Laws of 1931 and existing under Title 1 of Article V of the New York Public Authorities Law (“NY PAL”), having an office for the transaction of business at 30 South Pearl Street, Albany, New York 12207 (“NYPA”) and the Long Island Power Authority (“LIPA”), created pursuant to Chapter 517 of the New York Laws of 1986 and existing under Title 1-A of Article V of the NY PAL, having an office for the transaction of business at 333 Earle Ovington Boulevard, Suite 403, Uniondale, New York 11553 (“LIPA”) for the sale of 15 megawatts (“MW”) of firm hydroelectric  power and energy from NYPA to LIPA for resale to United States Department of Energy (“DOE”) as owner of Brookhaven National Laboratory (together with DOE, collectively referred to as “BNL”).  NYPA and LIPA are from time to time referred to in this Agreement individually as a “Party” or collectively as the “Parties.”

 

RECITALS:

 

 

I.          NYPA is a New York State corporate municipal instrumentality and political subdivision of the State of New York engaged in the generation and transmission of electricity.

 

II.         LIPA is a New York State corporate municipal instrumentality and political subdivision of the State of New York engaged in the transmission, distribution and sale of electricity.

III.        NYPA has available firm hydroelectric power and energy from both its St. Lawrence-FDR Project and its Niagara Project (collectively, the “Hydro Projects” as defined in Article 1.12 below) not currently allocated to end-use customers.

 

IV.       NYPA’s Board of Trustees at their January 27, 2009 meeting authorized NYPA to enter into a contract for the sale of 15 MW of Hydroelectric Power (as defined in Article 1.13 below) to LIPA for resale to BNL.

 

V.        The sale of Hydroelectric Power by NYPA to LIPA for resale to BNL is authorized under section 1005 (5) of the NY PAL.

 

VI.       LIPA owns and operates electric distribution facilities capable of providing service to end-use customers in its service area.

 

VII.      Hydroelectric Power generated from the Hydro Projects serve an important economic development function by providing competitively priced electricity to support economic activity and employment in New York State.

 

VIII.     Since 1982, NYPA has provided firm power service to BNL, both a large employer and a leading physical sciences laboratory within the U. S. Department of Energy performing vital scientific research which benefits industries throughout New York State pursuant to the terms of the NYPA/BNL Agreement (as defined in Article 1.23 below) and, associated with such historical service, NYPA has maintained grandfathered transmission agreements, currently designated as contract number 76 in Attachment L to the New York Independent System Operator’s Open Access Transmission Tariff (“Transmission Agreements”).

 

IX.       The Parties anticipate that LIPA and BNL will enter into a LIPA/BNL Agreement for the resale and delivery to BNL of the Hydroelectric Power sold to LIPA under this Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants herein, NYPA and LIPA agree as follows:

 

1.            DEFINITIONS

 

1.1.        Agreement means this Contract for the Sale of Firm Hydroelectric Power and Energy for Resale to the Brookhaven National Laboratory, dated as of [date], between NYPA and LIPA, including any Appendix attached hereto and any amendments to this Agreement that may be made from time to time in accordance herewith.

 

1.2.         Allocation means the amount of Hydroelectric Power approved by NYPA’s Board of Trustees to be sold to LIPA for resale to and exclusive use by BNL, as set forth in Article 2.1.

 

1.3.         Ancillary Services shall have the meaning set forth in the NYISO Tariffs, as such definition may be modified from time to time.

 

1.4.        BNL has the meaning set forth in the preamble.

 

1.5.        Commencement Date shall be as set forth in Article 13.2.

 

1.6.        Conditions Precedent shall be as set forth in Article 13.1.

 

1.7.        Contract Demand will be the amount of Hydroelectric Power set forth in Article 2.1.

 

1.8.        Covered Matters shall have the meaning set forth in Article 6.2.

 

1.9.        DOE has the meaning set forth in the preamble.

 

1.10.     FERC means the Federal Energy Regulatory Commission (or any successor organization).

 

1.11.     FERC Licenses mean the first new license issued by FERC to NYPA for the continued operation and maintenance of the St. Lawrence-FDR Power Project, pursuant to Section 15 of the Federal Power Act, which new license became effective October 31, 2003 after expiration of the Project’s original license issued in 1953, and further means the first new license issued by FERC to NYPA for the continued operation and maintenance of the Niagara Power Project, pursuant to Section 15 of the Federal Power Act, which new license became effective September 1, 2007 after expiration of the Project’s original license issued in 1958.

 

1.12.     Hydro Projects is a joint reference to both the St. Lawrence-FDR Power Project, FERC Project No. 2000 and the Niagara Power Project, FERC Project No. 2216. 

 

1.13.    Hydroelectric Power is as defined in NYPA’s Service Tariff No. 2B and is intended to be available at all times except for limitations provided in this Agreement, the Service Tariff or the Rules.

 

1.14.     ICAP refers to Installed Capacity as such term is defined in the NYISO Tariffs as may be modified from time to time.

 

1.15.     International Joint Commission (or “IJC”) is the commission that prevents and resolves disputes between the United States of America and Canada under the 1909 Boundary Waters Treaty and pursues the common good of both countries as an independent and objective advisor to the two governments.  The Commission rules upon applications for approval of projects affecting boundary or transboundary waters and may regulate the operation of these projects.

 

1.16.LIPA has the meaning set forth in the preamble.

 

1.17.     LIPA/BNL Agreement refers to an agreement between LIPA and BNL for the purpose of reselling and delivering to BNL Hydroelectric Power purchased by LIPA under this Agreement.

 

1.18.     LIPA Parties shall have the meaning set forth in Article 6.2.

 

1.19.     Load Serving Entity (or “LSE”) shall have the meaning set forth in the NYISO Tariffs, as such definition may be modified from time to time.

 

1.20.     MW is an abbreviation for megawatts as set forth in the preamble.

 

1.21.     NRA means the federal Niagara Redevelopment Act (16 USC §§836, 836a).

 

1.22.     NYISO means the New York Independent System Operator or any successor organization.

 

1.23.     NYISO Tariffs means the NYISO’s Open Access Transmission Tariff or the NYISO’s Market Administration and Control Area Services Tariff, as applicable, or any successor tariffs to such NYISO Tariffs.

 

1.24.     NYPA has the meaning set forth in the preamble.

 

1.25.     NYPA/BNL Agreement means the existing power sales agreement entered into between NYPA and BNL in 1982, as modified from time to time.

 

1.26.     NY PAL has the meaning set forth in the preamble.

 

1.27.     Point of Withdrawal means the load bus established with the NYISO for service to BNL as contemplated under this Agreement. 

 

1.28.     Rules are the applicable provisions of the NYPA's Rules and Regulations for Power Service (Part 454 of Chapter X of Title 21 of the Official Compilation of Codes, Rules and Regulations of the State of New York), as they may be modified from time to time.

 

1.29.     Service Tariff is NYPA’s Service Tariff No. 2B, a schedule establishing rates and other conditions for sale of Hydroelectric Power to LIPA for resale to BNL.

 

1.30.     State Comptroller means the Comptroller of the State of New York.

 

1.31.     Transmission Agreements has the meaning set forth in Recital VIII.

 

1.32.     UCAP means Unforced Capacity as such term is defined in the NYISO Tariffs as may be modified from time to time.

 

2.    SERVICES PROVIDED BY NYPA

 

2.1.        NYPA, consistent with section 1005 (5) of the NY PAL, shall generate, sell and deliver or cause to be delivered to LIPA at the Point of Withdrawal 15 MW of Hydroelectric Power from the Hydro Projects, consisting of 14 MW from the St. Lawrence-FDR Project and 1 MW from the Niagara Project.  The Contract Demand under this Agreement shall be 15 MW, or such other amount as may be mutually agreed upon by the Parties.

 

2.2.        The Parties agree that this 15 MW Allocation of Hydroelectric Power is for the exclusive use of BNL.

 

2.3.       NYPA represents that the Hydroelectric Power sold under this Agreement is not subject to the federal preference provisions of the NRA.  LIPA represents that such resale to BNL under the LIPA/BNL Agreement is in accordance with section 1020-dd of the NY PAL.

 

2.4.        NYPA shall sell to LIPA 15 MW of firm capacity associated with the Allocation.  NYPA shall ensure that such capacity associated with the Allocation qualifies as ICAP under the NYISO Tariff.  NYPA and LIPA agree to cooperate in good faith to enable such ICAP to satisfy a portion of applicable LSE responsibilities associated with the BNL retail load served by this Agreement and the NYPA/BNL Agreement, as described in Section 2.7 below.  Such cooperation shall include LIPA’s conveyance of the same amount of firm capacity to NYPA and such certifications and confirmations as may be required under the NYISO Tariffs with respect to installed capacity suppliers, LSEs and bilateral transactions.

 

2.5.        NYPA shall sell and arrange for delivery to LIPA at the Point of Withdrawal firm energy associated with the Allocation based on 15 MW multiplied by the forecasted load factor for BNL’s total usage in each month.  Such load factor shall not be greater than unity (1.0).  The firm energy shall be made available at the Point of Withdrawal at 69 kilovolts, as three-phase alternating current at a frequency of 60 Hertz.

 

2.6.       NYPA has the right to reduce the amount of firm energy provided to LIPA in any month under this Agreement in the event of low flow (i.e., hydrologic) conditions that reduce the amount of such energy produced at the Hydro Projects.  Any such reductions will be scheduled prior to the start of the month and made on a pro rata basis to all NYPA customers purchasing Hydroelectric Power from either of the Hydro Projects.  The amount of firm energy not sold to LIPA under this Agreement due to low flow conditions may be replaced with resources supplied by NYPA to BNL under the NYPA/BNL Agreement, up to the Contract Demand. 

 

2.7.         The Parties agree that NYPA is, and intend for NYPA to continue to be, the LSE for the entire BNL retail load.  Accordingly, NYPA shall perform all LSE functions under the NYISO Tariff related to the (i) sale and delivery of energy and sale of capacity to LIPA under this Agreement, and (ii) the consumption of the Allocation by the BNL retail load.  NYPA shall be responsible for all NYISO charges arising under this Agreement, including but not limited to:

 

A.   NYISO charges associated with the scheduling and delivery of all energy and capacity (i.e., ICAP/UCAP) sold under this Agreement, as well as the consumption of the Allocation by the BNL retail load;

 

B. the procurement of Ancillary Services, marginal losses, the NYPA Transmission Adjustment Charge (“NTAC”) and congestion costs applicable to NYPA’s scheduling and delivery of energy and capacity sold under this Agreement, as well as the consumption of the Allocation by the BNL retail load; and

 

C. the procurement of any other products or services required by the NYISO related to the sale, scheduling or delivery of energy or capacity sold under this Agreement as well as the consumption of the Allocation by the BNL retail load

 

2.8.        Notwithstanding the foregoing, to the extent the NYISO imposes any charges upon LIPA with respect to the sale and delivery of firm energy and the sale of firm capacity to LIPA under this Agreement or the consumption of the Allocation by the BNL retail load, those costs will either be (a) reimbursed by NYPA, or (b) deducted from LIPA’s payment to NYPA, as directed by NYPA in written notice to LIPA. 

 

2.9.        Nothing in this Agreement precludes NYPA from recovering all NYISO charges it has incurred related to sales under this Agreement directly from BNL under the NYPA/BNL Agreement.

 

2.10.     NYPA shall provide at least 30 days prior written notice to LIPA for any changes or termination of the Contract Demand, unless otherwise agreed upon in writing by the Parties.

 

 

3.    SERVICES PROVIDED BY LIPA

 

3.1.       LIPA shall purchase Hydroelectric Power associated with the Allocation from NYPA at the Point of Withdrawal and resell and deliver to BNL the Hydroelectic Power associated with the Allocation at the rates and charges set by NYPA in accordance with Article 4 below and such bills rendered by LIPA to BNL pursuant to the LIPA/BNL Agreement shall not include any mark-up or a profit component.  LIPA’s bills to BNL rendered pursuant to the LIPA/BNL Agreement are subject to increase in accordance with rates, terms and conditions specified in LIPA’s Tariff for Electric Service

 

3.2.       The Parties agree that this Agreement does not grant to NYPA any rights to transmission service over LIPA's transmission or distribution system with respect to the sale and delivery of either energy or capacity from NYPA to LIPA under this Agreement. 

 

3.3.       As of the Commencement Date of this Agreement, NYPA hereby partially assigns and transfers to LIPA the rights and obligations associated with NYPA’s supply of 15 MW of Direct Firm Power Service (as such term is defined in the NYPA/BNL Agreement) to BNL under the NYPA/BNL Agreement.  Such partial assignment of the obligation to provide 15 MW of Direct Firm Power Service to BNL under the NYPA/BNL Agreement shall be conditioned upon and only effective to the extent that LIPA receives full delivery of 15 MW of the Hydroelectric Power associated with the Allocation from NYPA pursuant to Articles 2.4, 2.5 and 3.10 of this Agreement. 

 

LIPA hereby accepts the partial assignment and transfer of such rights and obligations to provide 15 MW of Direct Firm Power Service to BNL under the NYPA/BNL Agreement, subject to the conditions of this partial assignment stated herein and the requirement that this partial assignment shall not impose any costs or liabilities upon LIPA prior to the Commencement Date of this Agreement, or as a result of the termination of this Agreement.  Such partial assignment shall terminate, and the rights and obligations to provide 15 MW of Direct Firm Power Service to BNL shall revert to NYPA, immediately upon termination or expiration of this Agreement.

 

NYPA expressly retains all other rights and obligations under the NYPA/BNL Agreement, including those rights and obligations relating to the transmission of all Direct Firm Power Service to BNL under the NYPA/BNL Agreement. 

 

3.4.       NYPA hereby agrees to utilize its grandfathered transmission congestion contracts (“TCCs”) associated with the Transmission Agreements used for deliveries of Hydroelectric Power associated with the Allocation to BNL under the NYPA/BNL Agreement to schedule and deliver all energy to LIPA under this Agreement for resale of the Allocation to BNL in accordance with the partial assignment of the obligation to provide 15 MW of Firm Power Service from NYPA to LIPA pursuant to Article 3.3.  In the event that it is determined that NYPA’s grandfathered TCCs associated with deliveries of energy to BNL may not be utilized to facilitate the scheduling and delivery of energy by NYPA to LIPA under this Agreement, pursuant to the partial assignment described in Article 3.3 (above), then NYPA hereby agrees to make all necessary arrangements pursuant to the NYISO Tariffs to procure transmission service required for the sale and delivery of energy from NYPA to LIPA for resale to BNL under this Agreement.

 

3.5.       Nothing herein shall affect nor is intended to affect NYPA’s rights and obligations including the quantity of transmission service purchased by NYPA under the Transmission Agreements, including the grandfathered transmission agreement dated as of October 1, 1981, as amended, between NYPA and LIPA.

 

3.6.       Nothing in this Agreement, express or implied, shall relieve or limit NYPA from its obligations (1) to uphold its LSE responsibilities in accordance with the NYISO Tariffs, and (2) to provide Hydroelectric Power free and clear of all liens, claims and encumbrances.

 

3.7.       LIPA shall supply NYPA with hourly meter data on a monthly basis for NYPA’s use under the NYPA/BNL Agreement.

 

3.8.       The resale by LIPA of Hydroelectric Power to BNL shall be consistent with the terms and conditions provided herein.  The LIPA/BNL Agreement shall include a provision that prohibits BNL from reselling any of the Hydroelectric Power purchased from LIPA.

 

3.9.       Nothing in this Agreement prohibits LIPA’s application of the gross receipts tax and New York State assessment in its charges for service to BNL in accordance with applicable state and federal laws, regulations and tariffs.

 

3.10.     Except as provided in Article 2.4 and consistent with Article 2.7, LIPA shall have no obligation to purchase or supply any ICAP or UCAP related to BNL’s load.  Notwithstanding the parties’ intent as described in the above referenced Articles, to the extent the NYISO imposes on LIPA the responsibility to provide any ICAP or UCAP related to BNL’s retail load or otherwise imposes any charges or penalties upon LIPA with respect to the provision of ICAP or UCAP related to BNL’s retail load, NYPA will, as applicable and pursuant to written notice from NYPA to LIPA, (a) arrange for LIPA to retain capacity conveyed by NYPA pursuant to Article 2.4 and provide to LIPA all additional quantities of capacity with appropriate locational characteristics as may be necessary to meet its responsibilities to the NYISO at no charge, or (b) reimburse LIPA for such NYISO charges or penalties, or (c) deduct such charges or penalties from LIPA’s payment to NYPA.   

 

3.11.    LIPA shall have no obligation to purchase Hydroelectric Power associated with this Allocation from NYPA nor to resell and deliver such Hydroelectric Power to BNL to the extent that BNL is in arrears on any payment due to LIPA or in the event of an early termination of the LIPA/BNL Agreement as contemplated in Article 13.3 in this Agreement. 

 

3.12.     LIPA shall have no obligation to make deliveries to BNL in the event that NYPA fails to make deliveries of the Hydroelectric Power associated with the Allocation to LIPA.

 

 

4.    RATES

 

4.1.        Rates shall be as set forth in the Service Tariff, which shall be subject to modification from time to time.  NYPA will provide LIPA with 30 days written notice of any such modification.

 

4.2.        LIPA shall pay NYPA the sum of charges indicated in Articles 4.2.1, 4.2.2., and 4.2.3 below for Hydroelectric Power purchased from NYPA for the billing periods under this Agreement.

 

4.2.1.  Demand Charge.  The demand charge specified in the Service Tariff or any modification thereof applied to the Contract Demand.

 

4.2.2.    Energy Charge.  The energy charge specified in the Service Tariff applied to the energy apportioned to service under this Agreement.

 

4.2.3.   Any taxes, surcharges, or other assessments by federal, state, or local governments that NYPA is required to pay associated with the sale of Hydroelectric Power under this Agreement.

 

4.3.        Except as provided in Article 3.1, LIPA agrees that the bills it receives from NYPA under this Agreement for the sale of Hydroelectric Power will not be marked up or have a profit component added thereto when LIPA resells the Hydroelectric Power to BNL; provided however, LIPA reserves the right to recover charges from BNL for transmission service through the LIPA/BNL Agreement if and to the extent such charges become due and cannot be recovered from NYPA as described in Article 2 and Article 3.

 

 

 

5.         BILLING AND PAYMENT PROVISIONS

 

5.1.        NYPA will submit bills to LIPA on or before the 10th business day of each Billing Period (as such term is defined in the Service Tariff) for Hydroelectric Power furnished during the preceding Billing Period.  Payments by LIPA to NYPA for such service will be due 30 days after bills are rendered.  LIPA will be subject to late payment charges as specified below.  Payments shall be made by wire transfer to JP Morgan Chase Bank, ABA # 021000021, for credit to New York Power Revenue Fund Account # 008-030383, unless otherwise indicated in writing by NYPA.

 

5.2.        All bills rendered by NYPA to LIPA for Hydroelectric Power under this Agreement shall contain sufficient information to permit LIPA to confirm that such bills have been correctly computed or sufficient back-up data will be provided by NYPA to permit LIPA to verify bills.  Upon LIPA’s request, NYPA shall furnish to LIPA any additional information reasonably necessary to permit LIPA to audit NYPA billings.

 

5.3.        LIPA will add such other charges, including those charges identified in Article 3.9, as provided for in LIPA’s Tariff for Electric Service and submit the invoice for the total amount to BNL.  Such invoices to BNL shall separately state Hydroelectric Power charges separate from all other LIPA charges.

 

5.4.        If LIPA fails to pay any bill when due, an interest charge equal to the interest rate specified in section 2880 of the NY PAL multiplied by the principal sum unpaid shall be added on the first day of each succeeding calendar month until the amount due, including interest, is paid in full.  In the event of a billing dispute, LIPA shall pay the full amount due, but NYPA shall refund to LIPA any disputed amounts determined to be billed in error within 30 days of such determination with interest calculated as above.  NYPA shall have the right upon not less than 15 days advance written notice to discontinue furnishing Hydroelectric Power to LIPA for nonpayment of bills and to refuse to resume furnishing Hydroelectric Power to LIPA so long as any part of the amount due remains unpaid.  The minimum charge for Hydroelectric Power as defined in the Service Tariff shall be pro rated to reflect the number of days in any Billing Period during which Hydroelectric Power is so discontinued.

 

 

6.         LIABILITY AND INDEMNIFICATION

 

6.1.        NYPA expressly agrees and acknowledges that LIPA’s officers, trustees, employees, representatives and agents shall not be liable to NYPA for any monetary damages arising out of the performance of this Agreement.  Further, in no case shall LIPA or any of its officers, trustees, employees, representatives or agents be liable to NYPA for any indirect, special, or consequential damages, economic losses or lost profits even if LIPA has been notified of the possibility of such damages or losses and regardless of whether such damages or losses are based on LIPA’s, or its officers’, Trustees’, employees’, representatives’ or agents’ negligence, breach of warranty, tort, strict liability or any other legal theory arising out of the performance of this Agreement.

 

6.2.        Without limiting any other remedies to which LIPA and LIPA’s officers, trustees, employees, representatives and agents may be entitled, NYPA shall: (a) indemnify and hold harmless LIPA, including LIPA’s successors, assigns, trustees, officers, employees, representatives and agents (the ”LIPA Parties”), from and against any and all losses, liabilities, damages, costs and expenses including, without limitation, any consequential, indirect, incidental, punitive or special damages, as a result of any demands, claims or judgments asserted against the LIPA Parties by any third party (including BNL) arising out of, or related to, or resulting from acts or omissions of NYPA arising out of or related to this Agreement (the “Covered Matters”); and (b) at its own expense, defend the LIPA Parties in any dispute, action or proceeding on any of the Covered Matters.

 

6.3.       The provisions of this Article 6 shall survive the expiration or termination of this Agreement for any reason.

 

 

7.         TRANSFER OF INTEREST IN CONTRACT

 

No voluntary transfer of service or of the rights of either Party under this Agreement shall be made without the written approval of the other Party which Party’s approval shall not be unreasonably withheld, provided, that any successor to or assignee of the rights of either Party whether by voluntary transfer, judicial sale, foreclosure sale, or otherwise, shall be subject to all the provisions and conditions of this Agreement, to the same extent as though such successor or assignee were the original Party, and provided further, that the execution of a mortgage or trust deed, or judicial or foreclosure sales made thereunder, shall not be deemed a voluntary transfer within the meaning of this Article.

 

8.         WAIVERS

 

8.1.       Any waiver at any time by either LIPA or NYPA of their rights with respect to a default or of any other matter arising in connection with this Agreement shall not be deemed to be a waiver with respect to any subsequent default or matter.

 

8.2.        No waiver by either Party of any rights with respect to any matter arising in connection with this Agreement shall be effective unless made in writing and signed by the Party waiving such rights.

 

9.         RULES AND SERVICE TARIFFS

 

9.1.        NYPA’s Rules as may later be amended from time to time by NYPA, are incorporated by reference into this Agreement.  Unless otherwise specifically provided for in this Agreement, the terms, charges and conditions for service shall be subject to the Rules

9.2.       Service Tariff No. 2B, as now in effect or later amended from time to time by NYPA, or such superseding tariff as NYPA may later promulgate is incorporated into this Agreement with the same force and effect as if herein set forth at length.

 

9.3.       In the event of any inconsistencies, conflicts or differences between the provisions of the Service Tariff and the Rules, the provisions of Service Tariff shall govern.  In the event of any inconsistencies, conflicts or differences between the provisions of this Agreement and the Service Tariff, the provisions of this Agreement shall govern.

 

9.4.       NYPA shall provide at least 30 days prior written notice to LIPA of any proposed change in the Rules and the Service Tariff.

 

 

10.      SUPPLEMENTAL PROVISIONS

 

Certain provisions required by law (Standard Clauses for NYS Contracts) are attached to this Agreement in Appendix A and are hereby incorporated as part of this Agreement with the same force and effect as if herein set forth at length and may be modified from time to time as required.

 

11.      NOTIFICATION

 

11.1.     All correspondence relating to this Agreement shall be directed to the following:

                 

NYPA:

 

Ms. Caroline Garcia

Manager – Contract Administration

New York Power Authority

123 Main Street

White Plains, New York 10601

Fax:             914-390-8156

Email:          carol.garcia@nypa.gov

 

Copy:

 

Gary D. Levenson, Esq.

Principal Attorney

New York Power Authority

123 Main Street

White Plains, New York 10601

Fax:             914-390-8040

Email:          gary.levenson@nypa.gov

 

LIPA:

 

Mr. Paul DeCotis

Vice President of Power Markets

Long Island Power Authority

333 Earl Ovington Blvd., Suite 403

Uniondale, New York 11553

Fax:             516-222-9137

Email:          pdecotis@lipower.org

 

Copy:

 

Lynda Nicolino, Esq.

General Counsel

Long Island Power Authority

333 Earl Ovington Blvd., Suite 403

Uniondale, New York 11553

Fax:             516-222-9137

Email:          lnicolino@lipower.org

 

11.2.    Except where otherwise herein specifically provided, any notice, communication or request required or authorized by this Agreement by either Party to the other shall be deemed properly given:  a) if sent by U.S. First Class mail addressed to the Party at the address set forth above, b) if sent by a nationally recognized overnight delivery service, two (2) calendar days after being deposited for delivery to the appropriate address set forth above, c) if delivered by hand, with written confirmation of receipt, d) if sent by facsimile to the appropriate fax number as set forth above, with written confirmation of receipt, or e) if sent by electronic mail to the appropriate address as set forth above, with written confirmation of receipt.  Either Party may change the addressee and/or address for correspondence sent to it by giving written notice in accordance with the foregoing.

 

 

12.      MISCELLANEOUS TERMS

 

12.1.    LIPA may have disclosed to the public the estimated total cost of this Agreement with NYPA prior to LIPA’s Board of Trustees authorization of the execution of this Agreement. 

 

12.2.     Nothing in this Agreement, expressed or implied, is intended to confer on any person, other than the Parties hereto, any rights or remedies, under or by reason of this Agreement.

 

12.3.    Counterparts. This Agreement may be executed in counter parts, each of which shall be an original and all of which shall constitute a single agreement.

 

12.4.    Amendments. No amendment or modification to this Agreement shall be enforceable unless reduced to writing, executed by both Parties, and approved by the State Comptroller.

 

13.      TERM AND TERMINATION

 

13.1.   Conditions Precedent: This Agreement shall become legally binding and effective only upon satisfaction of the following conditions precedent (each of Articles 13.1.1, 13.1.2 and 13.1.3 are collectively referred to as the “Conditions Precedent”: 

 

13.1.1.         NYPA Conditions: (a) receipt of approval by NYPA’s Board of Trustees to execute this Agreement; (b) receipt of approval of this Agreement by the Governor of the State of New York, pursuant to section 1009 of the NY PAL; (c) execution of this Agreement by NYPA and LIPA, and (d) execution of an amended and restated NYPA/BNL Agreement. 

 

13.1.2.         LIPA Conditions: (a) receipt of approval by LIPA’s Board of Trustees to execute this Agreement; (b) execution of this Agreement by NYPA and LIPA; (c) receipt of approval by LIPA’s Board of Trustees to execute the LIPA/BNL Agreement; (d) execution of the LIPA/BNL Agreement by LIPA and BNL; (e) receipt of approval of this Agreement by the New York State Attorney General (as to form) and by the New York State Comptroller pursuant to section 1020-cc of the NY PAL.

13.1.3.         BNL Conditions: (a) receipt of approval from DOE to execute LIPA/BNL Agreement; (b) execution of the LIPA/BNL Agreement by LIPA and BNL; (c) receipt of approval from DOE to execute an amended and restated NYPA/BNL Agreement; and (d) execution of an amended and restated NYPA/BNL Agreement.

 

13.2.     The term of this Agreement shall be for a period of 10 years from the Commencement Date, which shall be the first day of the month following receipt of all Conditions Precedent, but may be extended for an additional five years by NYPA provided NYPA and LIPA receive prior notice from BNL in a form acceptable to the Parties indicating that BNL desires to continue to receive the Allocation for the length of such extension.

 

13.3.  This Agreement shall terminate: a) upon expiration; b) upon early termination of the LIPA/BNL Agreement; or c) in the event that NYPA can sell directly to BNL; provided, however, that NYPA shall be afforded a reasonable transition period to include the time necessary to establish a valid contract for the sale of hydroelectricity between NYPA and BNL.  The obligation to make all payments due, including any final reconciliation, shall survive the termination of this Agreement.

 

14.      SEVERABILITY AND VOIDABILITY

 

If any term or provision of this Agreement shall be invalidated, declared unlawful or ineffective in whole or in part by an order of the FERC, action or order by NYISO or a court of competent jurisdiction, such action or order shall not be deemed to invalidate the remaining terms or provisions hereof, and the Parties shall renegotiate the terms of this Agreement to address such term or provision deemed to be invalidated, declared unlawful or ineffective. 

 

15.      APPLICABLE LAW

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York to the extent that such laws are not inconsistent with the FERC License and the NRA, as well as, rulings by the IJC and without regard to conflicts of law provisions.

 

16.      REPRESENTATIONS AND WARRANTIES

 

16.1  NYPA represents and warrants to LIPA that as of the date of execution of this Agreement:

 

A.  NYPA is a public authority of the State of New York, is duly organized and validly existing, under the Power Authority Act, Title 1 of Article 5 of the NY PAL, Chapter 43-A of the Consolidated Laws of the State of New York, as amended.  NYPA has the power pursuant to the Power Authority Act (sections 1000 – 1017 of the NY PAL) to execute the Agreement and to perform its obligations under the Agreement, and all such actions have been duly authorized by all necessary proceedings on its part; and

 

B.   The execution, delivery and performance of this Agreement by NYPA  will not conflict with its governing documents, any applicable laws, or any covenant, agreement, understanding, decree or order to which NYPA is a party or by which it is bound or affected; and 

 

C.   The Agreement has been duly and validly executed and delivered by NYPA, and no other authorization for NYPA’s execution and delivery of the Agreement or performance by NYPA of its obligations thereunder is required under the Act; and

 

D.   The Agreement constitutes a legal, valid and binding obligation of NYPA, enforceable in accordance with its terms against NYPA, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.

 

E.   NYPA holds the legal power and authority to perform this partial assignment and its officers have been duly authorized to do so.

 

               16.2   LIPA represents and warrants to NYPA that as of the date of execution of this Agreement:

 

A.   LIPA is a public authority of the State of New York, is duly organized and validly existing, under the Long Island Power Authority Act, Title 1-A of Article 5 of the NY PAL, Chapter 43-A of the Consolidated Laws of the State of New York, as amended.  LIPA has the power pursuant to the Long Island Power Authority Act (sections 1020 – 1020-ii of the Act) to execute the Agreement and to perform its obligations under the Agreement, and all such actions have been duly authorized by all necessary proceedings on its part; and

 

B.   The execution, delivery and performance of this Agreement by LIPA will not conflict with its governing documents, any applicable laws, or any covenant, agreement, understanding, decree or order to which LIPA is a party or by which it is bound or affected; and

 

C.   The Agreement has been duly and validly executed and delivered by LIPA, and no other authorization for LIPA’s execution and delivery of the Agreement or performance by LIPA of its obligations thereunder is required under the Act; and

 

D.   The Agreement constitutes a legal, valid and binding obligation of LIPA, enforceable in accordance with its terms against LIPA, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.

 

 

 


 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective officers there unto duly authorized on the date first above written.

 

AGREED:

 

LONG ISLAND POWER AUTHORITY

 

By:      ________________________________

 

Title:    ________________________________

 

Date:   ________________________________

 

 

 

AGREED:

 

POWER AUTHORITY OF THE STATE OF NEW YORK

 

By:      ________________________________

 

Title:    ________________________________

 

Date:   ________________________________

 

 

APPROVED BY:

APPROVED AS TO FORM:

Office of the State Comptroller

Office of the New York State Attorney General

_________________________________
Name

_________________________________
Name

_________________________________
Title

_________________________________
Title

_________________________________
Date

_________________________________
Date

 


 

STATE OF NEW YORK                  )

COUNTY OF WESTCHESTER     )

 

On the __ day of ___________, [2010] before me personally came______________, to me known to be the individual described in the foregoing instrument in his capacity as _____________ of the Power Authority of the State of New York, the corporate municipal instrumentality and political subdivision of the State of New York described in and which executed the foregoing instrument, who being duly sworn did acknowledge that (s)he executed same on behalf of, and that (s)he was authorized to execute same on behalf of the aforementioned entity.

 

 

 

___________________________________

                                                                        Notary Public

 


 

STATE OF NEW YORK                  )

COUNTY OF NASSAU________ )

 

On the __ day of ___________, [2010] before me personally came________________, to me known to be the individual described in the foregoing instrument in his capacity as ____________________ of the Long Island Power Authority, the corporate municipal instrumentality and political subdivision of the State of New York described in and which executed the foregoing instrument, who being duly sworn did acknowledge that (s)he executed same on behalf of, and that (s)he was authorized to execute same on behalf of the aforementioned entity.

 

 

 

___________________________________

                                                                        Notary Public

 


 

Appendix A

 

PROVISIONS REQUIRED BY LAW

 

STANDARD CLAUSES FOR NYS CONTRACTS

 

The parties to the attached contract, license, lease, amendment or other agreement of any kind (hereinafter, “the Agreement” or “this Agreement”) agree to be bound by the following clauses which are hereby made a part of the Agreement (the word “Contractor” herein refers to any party other than the State, whether a contractor, licensor, licensee, lessor, lessee or other party):

 

NON-ASSIGNMENT CLAUSE.  In accordance with Section 138 of the State Finance Law, this Agreement may not be assigned by the Contractor or its right, title or interest therein assigned, transferred, conveyed, sublet or otherwise disposed of without the previous consent, in writing, of the State and any attempts to assign the Agreement without the State's written consent are null and void.  The Contractor may, however, assign its right to receive payment without the State's prior written consent unless this Agreement concerns Certificates of Participation pursuant to Article 5-A of the State Finance Law.

 

Comptroller’s Approval. In accordance with Section 112 of the New York State Finance Law (the “State Finance Law”), this Agreement shall not be valid, effective or binding upon the State until it has been approved by the State Comptroller and filed in that office.

 

Worker’s Compensation Benefits. In accordance with Section 142 of the State Finance Law, this Agreement shall be void and of no force and effect unless the Contractor provides and maintains coverage during the life of this Agreement for the benefit of such employees as are required to be covered by the provisions of the Workers’ Compensation Law.

 

Non-Discrimination Requirements. In accordance with Article 15 of the Executive Law (also known as the Human Rights Law) and all other New York State and Federal statutory and constitutional non–discrimination provisions, the Contractor shall not discriminate against any employee or applicant for employment because of race, creed, color, sex, national origin, age, disability, marital status, sexual orientation, genetic predisposition or carrier status.  Furthermore, in accordance with Article 220–e of the New York Labor Law, and to the extent that this Agreement shall be performed within the State of New York, Contractor agrees that neither it nor its subcontractors shall, by reason of race, creed, color, disability, sex, national origin, sexual orientation, genetic predisposition or carrier status; (a) discriminate in hiring against any New York State citizen who is qualified and available to perform the work; or (b) discriminate against or intimidate any employee for the performance of work under this Agreement.

 

WAGE AND HOURS PROVISIONSIf this is a public work contract covered by Article 8 of the Labor Law or a building service contract covered by Article 9 thereof, neither the Contractor’s employees nor the employees of its subcontractors may be required or permitted to work more than the number of hours or days stated in said statutes, except as otherwise provided in the Labor Law and as set forth in prevailing wage and supplement schedules issued by the State Labor Department.  Furthermore, Contractor and its subcontractors must pay at least the prevailing wage rate and pay or provide the prevailing supplements, including the premium rates for overtime pay, as determined by the State Labor Department in accordance with the Labor Law.

 

NON-COLLUSIVE BIDDING CERTIFICATION.  In accordance with Section 139-d of the State Finance Law, if this Agreement was awarded based upon the submission of bids, Contractor warrants, under penalty of perjury, that its bid was arrived at indepen­dently and without collusion aimed at restricting competition.  Contractor further warrants that, at the time Contractor submitted its bid, an authorized and responsible person executed and delivered to the State a non-collusive bidding certification on the Contractor's behalf.

 

INTERNATIONAL BOYCOTT PROHIBITION.  In accordance with Section 220-f of the Labor Law and Section 139-h of the State Finance Law, if this Agreement exceeds $5,000, The Contractor agrees, as a material condition of the Agreement, that neither The Contractor nor any substantially owned or affiliated person, firm, partnership or corporation has participated, is participating, or shall participate in an international boycott in violation of the federal Export Administration Act of 1979 (50 USC app. Sections 2401 et seq.) or regulations thereunder.  If such Contractor, or any of the aforesaid affiliates of Contractor, is convicted or is otherwise found to have violated said laws or regulations upon the final determination of the United States Commerce Department or any other appropriate agency of the United States subsequent to the Agreement’s execution, such Agreement, amendment or modification thereto shall be rendered forfeit and void.  The Contractor shall so notify the State Comptroller within five (5) business days of such conviction, determination or disposition of appeal (2NYCRR 105.4).

 

SET-OFF RIGHTS.  The State shall have all of its common law, equitable and statutory rights of set-off.  These rights shall include, but not be limited to, the State’s option to withhold for the purposes of set-off any moneys due to the Contractor under this Agreement up to any amounts due and owing to the State with regard to this Agreement, any other contract with the State, including any contract for a term commencing prior to the term of this Agreement, plus any amounts due and owing to the State for any other reason including, without limitation, tax delinquencies, fee delinquencies or monetary penalties relative thereto.  The State shall exercise its set-off rights in accordance with normal State practices including, in cases of set-off pursuant to an audit, the finalization of such audit by the State, its representatives, or the State Comptroller.

 

RECORDS.  The Contractor shall establish and maintain complete and accurate books, records, documents, accounts and other evidence directly pertinent to performance under this Agreement (hereinafter, collectively, “the Records”).  The Records must be kept for the balance of the calendar year in which they were made and for six (6) additional years thereafter.  The State Comptroller, the Attorney General and any other person or entity authorized to conduct an examination, as well as the agency or agencies involved in this Agreement, shall have access to the Records during normal business hours at an office of the Contractor within the State of New York or, if no such office is available, at a mutually agreeable and reasonable venue within the State, for the term specified above for the purposes of inspec­tion, auditing and copying.  The State shall take reasonable steps to protect from public disclosure any of the Records which are exempt from disclosure under Section 87 of the Public Offi­cers Law (the “Statute”) provided that:  (i) The Contractor shall timely inform the State in writing, that said records should not be disclosed; and (ii) said records shall be sufficiently identified; and (iii) designation of said records as exempt under the Statute is reasonable.  Nothing contained herein shall diminish, or in any way adversely affect, the State's right to discovery in any pending or future litigation.

 

Equal Employment for Minorities and Women. In accordance with Section 312 of the New York Executive Law:  (i) the Contractor shall not discriminate against employees or applicants for employment because of race, creed, color, national origin, sex, age, disability, marital status, sexual orientation, genetic predisposition or carrier status and shall undertake or continue existing programs of affirmative action to ensure that minority group members and women are afforded equal employment opportunities without discrimination.  Affirmative action shall mean recruitment, employment, job assignment, promotion, upgradings, demotion, transfer, layoff, or termination and rates of pay or other forms of compensation; (ii) at the request of the State, the Contractor shall request each employment agency, labor union, or authorized representative of workers with which it has a collective bargaining or other agreement or understanding, to furnish a written statement that such employment agency, labor union or representative will not discriminate on the basis of race, creed, color, national origin, sex, age, disability, marital status, sexual orientation, genetic predisposition or carrier status and that such union or representative will affirmatively cooperate in the implementation of the Contractor’s obligations herein; and (iii) Contractor shall state, in all solicitations or advertisements for employees, that, in the performance of this Agreement, all qualified applicants will be afforded equal employment opportunities without discrimination because of race, creed, color, national origin, sex, age, disability, marital status, sexual orientation, genetic predisposition or carrier status.  Contractor shall include the provisions of (i), (ii) and (iii) above, in every subcontract over twenty–five thousand dollars ($25,000.00) for the construction, demolition, replacement, major repair, renovation, planning or design of real property and improvements thereon (the “Work”) except where the Work is for the beneficial use of the Contractor. 

 

CONFLICTING TERMSIn the event of a conflict between the terms of the Agreement (including any and all attachments thereto and amendments thereof) and the terms of this Appendix A, the terms of this Appendix A shall control. 

GOVERNING LAW. This Agreement shall be governed by the laws of the State of New York except where the Federal supremacy clause requires otherwise.

 

LATE PAYMENT. Timeliness of payment and any interest to be paid to the Contractor for late payment shall be governed by Section 2880 of the NY PAL and the guidelines adopted by LIPA thereto.

 

PROHIBITION ON PURCHASE OF TROPICAL HARDWOODS.  The Contractor certifies and warrants that all wood products to be used under this contract award will be in accordance with, but not limited to, the specifications and provisions of State Finance Law §165 (Use of Tropical Hardwoods) which prohibits purchase and use of tropical hardwoods, unless specifically exempted, by the State or any governmental agency or political subdivision or public benefit corporation.  Qualification for an exemption under this law will be the responsibility of the Contractor to establish to meet with the approval of the State.

 

In addition, when any portion of this Agreement involving the use of woods, whether supply or installation, is to be performed by any subcontractor, the Contractor will indicate and certify in the submitted bid proposal that the subcontractor has been informed and is in compliance with specifications and provisions regarding use of tropical hardwoods as detailed in §165 State Finance Law.  Any such use must meet with the approval of the State; otherwise, the bid may not be considered responsive.  Under bidder certifications, proof of qualification for exemption will be the responsibility of the Contractor to meet with the approval of the State.

 

MacBride Fair Employment Principles. In accordance with the MacBride Fair Employment Principles (Chapter 807 of the New York Laws of 1992), the Contractor hereby stipulates that the Contractor either (i) has no business operations in Northern Ireland, or (ii) shall take lawful steps in good faith to conduct any business operations in Northern Ireland in accordance with the MacBride Fair Employment Principles (as described in Article 165 of, the New York State Finance Law), and shall permit independent monitoring of compliance with such principles.

 

 Omnibus Procurement Act of 1992. It is the policy of New York State to maximize opportunities for the participation of New York State business enterprises, including minority and women-owned business enterprises as bidders, subcontractors and suppliers on its procurement contracts.  Information on the availability of New York State subcontractors and suppliers is available from: 

 

NYS Department of Economic Development

Division for Small Business

One Commerce Plaza

Albany, New York 12245.

 

A directory of certified minority and women–owned business enterprises is available from:

NYS Department of Economic Development

Minority and Women’s Business Development Division

One Commerce Plaza

Albany, New York 12245

 

The Omnibus Procurement Act of 1992 requires that by signing this Agreement, Contractor certifies that:

 

(a)       The Contractor has made commercially reasonable efforts to encourage the participation of New York State Business Enterprises as suppliers and subcontractors, including certified minority and woman–owned business enterprises, on this project, and has retained the documentation of these efforts to be provided upon request to the State;

 

(b)       The Contractor has complied with the Federal Equal Opportunity Act of 1972 (P.L. 92–261), as amended;

 

(c)        The Contractor agrees to make commercially reasonable efforts to provide notification to New York State residents of employment opportunities on this Project through listing any such positions with the Job Service Division of the New York State Department of Labor, or providing such notification in such manner as is consistent with existing collective bargaining contracts or agreements.  The Contractor agrees to document these efforts and to provide said documentation to the State upon request; and

 

(d) The Consultant acknowledges that the State may seek to obtain offset credits from foreign countries as a result of this Agreement and agrees to cooperate with the State in these efforts.

 

Reciprocity and Sanctions Provisions.   The Contractor is hereby notified that if its principal place of business is located in a state that penalizes New York State vendors, and if the goods or services it offers are substantially produced or performed outside New York State, the Omnibus Procurement Act 1994 amendments (Chapter 684, Laws of 1994) require that the Contractor be denied contracts which it would otherwise obtain.

 

PURCHASES OF APPARELIn accordance with State Finance Law 162 (4-a), the State shall not purchase any apparel from any Contractor unable or unwilling to certify that:  (i) such apparel was manufactured in compliance with all applicable labor and occupational safety laws, including, but not limited to, child labor laws, wage and hours laws and workplace safety laws, and (ii) the Contractor will supply, with its bid (or, if not a bid situation, prior to or at the time of signing a contract with the State), if known, the names and addresses of each subcontractor and a list of all manufacturing plants to be utilized by the bidder.

 

CONTRACTOR CERTIFICATION OF COMPLIANCE WITH STATE FINANCE LAW SECTION 139-j.  Contractor certifies and affirms that it understands and agrees to comply with the procedures of the Governmental Entity relative to permissible contacts as required by the State Finance Law § 139-j (3) and § 139-j (6)(b).

 

OPTIONAL TERMINATION BY LIPA.  LIPA reserves the right to terminate this Agreement in the event it is found that the certification filed by Contractor in accordance with New York State Finance Law § 139-k was intentionally false or intentionally incomplete.  Upon such finding, the LIPA may exercise its termination right by providing written notification to the Contractor in accordance with the written notification terms of the Agreement.     

 

CONTINGENT FEES.  Contractor hereby certifies and agrees that (a) Contractor has not employed or retained and will not employ or retain any individual or entity for the purpose of soliciting or securing any State contract or any amendment or modification thereto pursuant to any agreement or understanding for receipt of any form of compensation which in whole or in part is contingent or dependent upon the award of any such contract or any amendment or modification thereto; and (b) Contractor will not seek or be paid an additional fee that is contingent or dependent upon the completion of a transaction by the State.

 

NON-PUBLIC PERSONAL INFORMATION.     Contractor shall comply with the provisions of the New York State Information Security Breach and Notification Act (General Business Law Section 899-aa; State Technology Law Section 208). Contractor shall be liable for the costs associated with such breach if caused by Contractor’s negligent or willful acts or omissions, or the negligent or willful acts or omissions of the contractor’s agents, officers, employees or subcontractors.

 

 


 

g.             Energy Cost Savings Benefit Programs – Service Tariff Amendments – Notice of Proposed Rule Making  

              

 

                The President and Chief Executive Officer submitted the following report:

SUMMARY

The Trustees are requested to authorize the Corporate Secretary to publish a Notice of Proposed Rulemaking (“NOPR”) in the New York State Register, in accordance with the requirements of the State Administrative Procedure Act (“SAPA”), to amend the Authority’s current production service tariffs applicable to customers under the Energy Cost Savings Benefit (“ECSB”) Programs.  Authority staff will address any comments received during the 45-day public comment period and return to the Trustees at a later date to seek final action on these service tariffs.

A comprehensive review of the Authority’s current production tariffs was performed by Authority staff in an effort to update them and make them consistent with those of other utilities.  The proposed amendments would:

·         reformat the current tariffs for easier reading and improved organization;

·         include certain standard provisions now applicable to all Authority service tariffs; and

·         add abbreviations and terms.

 

BACKGROUND

The ECSB Programs include Economic Development Power, High Load Factor and Municipal Distribution Agency customers.  The capacity and energy for the ECSB programs are provided by market purchases and the applicable service tariffs are ST-1, ST-1S, ST-35, ST-50 and ST-50A.

DISCUSSION

The amended service tariffs, as proposed, will include updated terminology and more streamlined organization and formatting.

 

In addition, the proposed changes will make the tariffs more consistent with other utilities’ tariffs and more readable and understandable for the Authority and its customers under the ECSB Programs.

 

The proposed revised service tariffs for market purchases are attached as Exhibits “1g-A” through “1g-E.”

 

FISCAL INFORMATION

Adoption of the proposed service tariffs will have no financial impact.  The changes proposed are administrative in nature and have no effect on current production rates.

 

RECOMMENDATION

The Manager – Market Analysis and Tariff Administration recommends that the Trustees authorize the Corporate Secretary to file a Notice of Proposed Rulemaking in the New York State Register for the revision of service tariffs for the Authority’s customers served under the Energy Cost Savings Benefit Programs.

The Chief Operating Officer, the Executive Vice President and General Counsel, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.


 

The attached resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to file a Notice of Proposed Rulemaking for publication in the New York State Register in accordance with the State Administrative Procedure Act to amend the Authority’s current production service tariffs applicable to its customers under the Energy Cost Savings Benefit Programs, as set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to file such other notice(s) as may be required by statute or regulation concerning the proposed tariff amendments; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

h.             Decrease in Westchester County Governmental Customer Rates – Notice of Adoption  

                               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve a modification in the rates for the sale of firm power to the Westchester County Governmental Customers (‘Customers’) in 2010.  This proposed action is consistent with the rate-setting process set forth in the Supplemental Electricity Agreements executed by the Customers and the Authority and in accordance with the State Administrative Procedure Act (‘SAPA’).

 

“This proposed final action seeks approval to decrease the production rates of the Customers by 14.17% as compared to 2009 rates.  The decrease would be effective with the January 2010 bills.   

               

BACKGROUND

 

“At their meeting of September 29, 2009, the Trustees directed the publication in the New York State Register (‘State Register’) of a notice that the Authority proposed to decrease the production rates by 14.17%.  The State Register notice was published on October 21, 2009 in accordance with SAPA.  Since this proposal would decrease revenues to the Authority, a public forum was not held.  The public record was closed on December 7, 2009. 

 

“In addition to the rate decrease, in 2010 the Customers will be subject to an Energy Charge Adjustment, under which the Authority passes through all actual variable costs to the Customers.  This cost-recovery mechanism employs a monthly charge or credit that reflects the difference between the projected variable costs of electricity recovered by the tariff rates and the monthly actual variable costs incurred by the Authority.  This billing mechanism is already in effect and will continue through 2010.

 

DISCUSSION

 

“As stated in the Notice of Proposed Rulemaking, the Customers’ production rates are based on the 2010 pro forma Cost of Service (‘COS’).  The projected 2010 COS is $46.8 million and the current or 2009 rate revenues are $54.5 million, resulting in an over-recovery of $7.7 million, or 14.17%.  There have been no changes to the 2010 COS or projected revenues since September’s NOPR.  The 2009 and final 2010 proposed rates with the 14.17% reduction are shown in Exhibit ‘1h-A.’

 

FISCAL INFORMATION

 

                “The adoption of the 2010 production rate decrease would result in an estimated reduction in revenues of $7.7 million.

 

RECOMMENDATION

 

                “The Manager – Market Analysis and Tariff Administration recommends that the Trustees authorize the Corporate Secretary to file a Notice of Adoption with the New York State Department of State for publication in the New York State Register of a decrease in production rates for the Westchester County Governmental Customers.

 

                “It is also recommended that the Senior Vice President – Marketing and Economic Development, or his designee, be authorized to issue written notice of adoption to the affected customers.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Marketing and Economic Development, the Senior Vice President – Corporate Planning and Finance and I concur in the recommendation.”

 

                The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Senior Vice President – Marketing and Economic Development  or his designee be, and hereby is, authorized to issue written notice of this final action by the Trustees to the affected customers; and be it further

 

RESOLVED, That the Corporate Secretary of the Authority be, and hereby is, directed to file such notices as may be required with the New York State Department of State for publication in the New York State Register and to submit such other notice as may be required by statute or regulation concerning the rate decrease; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all certificates, agreements and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 


 

i.              Procurement (Services) Contracts – Business Units and Facilities – Awards

                               

 

The President and Chief Executive Officer submitted the following report:

               

SUMMARY

“The Trustees are requested to approve the award and funding of the multiyear procurement contracts listed in Exhibit ‘1i-A’ in support of projects and programs for the Authority’s Business Units/Departments and Facilities.  Detailed explanations of the recommended awards, including the nature of such services, the bases for the new awards if other than to the lowest-priced bidders and the intended duration of such contracts, are set forth in the discussion below.

BACKGROUND

“Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts require the Trustees’ approval for procurement contracts involving services to be rendered for a period in excess of one year.

“The Authority’s Expenditure Authorization Procedures (‘EAPs’) require the Trustees’ approval for the award of non-personal services, construction, equipment purchase or non-procurement contracts in excess of  $3 million, as well as personal services contracts in excess of $1 million if low bidder, or $500,000 if sole-source or non-low bidder.

“The Authority’s EAPs also require the Trustees’ approval when the cumulative change- order value of a personal services contract exceeds the greater of $500,000 or 25% of the originally approved contract amount not to exceed $500,000, or when the cumulative change-order value of a non-personal services, construction, equipment purchase or non-procurement contract exceeds the greater of $1 million or 25% of the originally approved contract amount not to exceed $3 million.

DISCUSSION

“The terms of these contracts will be more than one year; therefore, the Trustees’ approval is required.  Except as noted, all of these contracts contain provisions allowing the Authority to terminate the services for the Authority’s convenience, without liability other than paying for acceptable services rendered to the effective date of termination.  Approval is also requested for funding all contracts, which range in estimated value from $47,200 to $4.5 million.  Except as noted, these contract awards do not obligate the Authority to a specific level of personnel resources or expenditures.

“The issuance of multiyear contracts is recommended from both cost and efficiency standpoints.  In many cases, reduced prices can be negotiated for these long-term contracts.  Since these services are typically required on a continuous basis, it is more efficient to award long-term contracts than to rebid these services annually.

“The following is a detailed summary of each recommended contract award.

Contract Awards in Support of Business Units/Departments and Facilities:

Corporate Communications

“In its continuing effort to meet its legislated mission and to help meet New York State’s overall energy policy goals, the Authority continues to undertake a number of short- and long-term projects to enhance its energy generation and transmission capabilities, as well as to increase the availability of alternative energy and energy efficiency technologies statewide. To help achieve as transparent and extensive a public education and stakeholder outreach effort as possible, the successful implementation of the Authority’s significant new initiatives and continuing projects will require well-coordinated, comprehensive and multichannel strategic and tactical communications undertakings.  To this end, the Authority is seeking assistance in meeting its ambitious public education and stakeholder outreach goals by retaining the services of full-service communications firms with a broad range of strategic and tactical expertise to assist the Authority with the development and/or implementation of extensive public education and stakeholder outreach. The firms, working with Authority staff and other project partners, when appropriate, would help formulate key strategic messages and delivery platforms to help inform the general public, community and other stakeholders and decision makers (including, but not limited to, area residents, environmental and business groups, civic organizations, local/state and regulatory agencies and public officials). Bid documents for such services (Q09-4557) were downloaded electronically from the Authority’s Procurement Web site by 66 firms, including those that may have responded to a notice in the New York State Contract Reporter. Eleven proposals were received and evaluated.  Based on the bidders’ respective qualifications, record and depth of experience in public outreach and strategic communications in the energy industry or related industries, as set forth in their proposals, staff determined that six firms were most qualified to provide such services and would best be able to provide the particular areas of expertise that may be required to meet the varied needs of the Authority’s new initiatives and continuing projects.  Staff therefore recommends award of contracts to the following six most technically qualified firms:  Arch Street Communications, Inc., Crowley Webb and Associates, Empire Government Strategies, Eric Mower and Associates, MJ Bradley & Associates, LLC and Zimmerman/Edelson, Inc. (PO#s TBA).  Their respective strengths, range of talents and areas of expertise, extensive experience and strong regional or statewide presence complement each other to establish a formidable resource for the Authority to draw on.  Additionally, many of the bidders partnered with one or more subcontractors to expand and/or enhance their qualifications, areas of expertise or range of services to be provided.  The firms that were not selected lacked the depth of relevant or related experience in the energy sector or related industries, were limited in the range of projects they could support and did not have levels of expertise or proposals as strong as those of the six recommended firms. The contracts would become effective on or about January 1, 2010 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $1.25 million.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  (It should be noted that Arch Street Communications is a New York State-certified Woman-Owned Business Enterprise (‘WBE’).)

Video Production Services

“The four contracts with CSL Enterprises, Inc. dba Reel Vision Productions (‘CSL’; Q09-4627), EMSTAR Media, Inc. (‘EMSTAR’’ Q09-4626), Pioppi Video Entertainment Corp. (‘Pioppi’; Q09-4625) and Thomas Ng (‘Ng’; Q09-4628; PO#s TBA) would provide for various video-related services for the Authority (including videography, video editing, video producer-director-editor services, video systems maintenance engineer and video production assistant/technician services). Each of the four bid documents was downloaded electronically from the Authority’s Procurement Web site by at least 19 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Multiple proposals were received in response to three of the Requests for Proposals (‘RFPs’) for the respective services.  Based on a review of the submitted proposals, staff recommends award of three contracts to CSL, EMSTAR and Ng, the lowest-priced bidders that meet all qualifications and bid requirements, as set forth in the respective RFPs, and whose proposed rates are competitive and reasonable.  Additionally, one proposal was received in response to the RFP for video producer-director-editor services. Procurement staff followed up with vendors that declined to bid; their reasons for not bidding included, but were not limited to, the work not being in the scope of their services, their current work load being too heavy or they had downloaded the bid documents for information purposes only. Staff recommends award of a fourth contract to Pioppi, which meets all qualifications and bid requirements for the specialized video producer-director-editor services, as set forth in the RFP, and whose proposed rates are competitive and reasonable. The contracts would become effective on or about January 1, 2010 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $900,000.  Specific allocations under each contract will be managed according to actual demand for the type of service required.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.

Energy Marketing and Business Development

Energy Services and Technology (‘ES&T’)

“As one of the utilities in the forefront of the SmartGrid initiative, the Authority currently has a network of nine Phasor Measurement Units (‘PMUs’) installed and operating at seven key substations on its high-voltage transmission system in New York State, with a 10th unit to be installed at the St. Lawrence/FDR Power Project switchyard.  These satellite-synchronized measurement and monitoring units provide a highly precise snapshot of events (system disturbance data) in the power system.  Such PMU data is used continuously by the Authority, the New York Independent System Operator (‘NYISO’) and other utilities to analyze various system disturbance events, as part of the U. S. Department of Energy and North American Electric Reliability Corporation (‘NERC’) North American Synchrophasor Initiative (‘NASPI’).  The Authority’s PMUs have been in operation since 1992 and require maintenance and upgrade, as computer systems become obsolete and new hardware and software are developed.  The continued maintenance of these PMUs is very important in order to ensure a continuous stream of valuable real-time phasor data to the Energy Management System at the Authority’s Energy Control Center, as well as to NYISO, NERC and other utilities (via NASPI), provide networking capability and maintain continuity of operations.  At their meeting of December 14, 2004, the Trustees approved the award of a five-year contract to Macrodyne, Inc. (‘Macrodyne’) to provide for such maintenance and support services, including hardware and software engineering services, as well as spare parts for the Authority’s network of PMUs.  Regular software upgrades provided as part of continuing system enhancement are also included.  Since the existing contract is expiring and the need for such services is ongoing, staff recommends the award of a new contract to Macrodyne (Q09-4654; PO# TBA) to provide for the continuation of such services.  The contract is awarded on a sole-source basis, since Macrodyne is the original equipment manufacturer and, as such, is uniquely qualified to maintain these units, which provide valuable information to various entities for the continuity of reliable operations. The new contract would become effective on or about January 1, 2010 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $250,000.

“In 2007, the Authority awarded a contract to Test Laboratories International, Inc. (‘TLI’), as the result of competitive bidding, to provide for furnishing, installing, validating and performance monitoring of new Network-Based Fault Data Analyzer (‘NBFDA’) software on existing Authority hardware platforms for Digital Fault Recorders (‘DFRs’). The DFRs provide a vital source of information for fault investigation and disturbance analysis on the Authority’s transmission lines and generating stations.  The NBFDA enables Authority staff and crews to quickly detect, locate, analyze and repair transmission line faults, in compliance with NERC recommendations.  The continued maintenance of the NBFDA software is very important in order to provide adequate support to the Authority’s operations team to quickly resolve any emergent issues identified as the result of fault data collection and analysis. To this end, staff recommends the award of a new contract to TLI (Q09-4657; PO# TBA) to provide for the continuation of such services.  The contract is awarded on a sole-source basis, since TLI is the original software developer and, as such, is uniquely qualified to provide such services (including, but not limited to, technical support for configuring and adding new DFRs, troubleshooting and maintaining the software, implementing software modifications and upgrades, developing software enhancements to incorporate new features, such as improving its analysis capabilities and user interface, as may be required).  The new contract would become effective on or about January 1, 2010 for an intended term of up to two years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $47,200.

Enterprise Shared Services

Information Technology for Corporate Support Services

“The contract with FirstCall Network, Inc. (‘FirstCall’) (Q09-4610; PO# TBA) would provide for a vendor-hosted, web-based, automated Call Tree Notification system that contacts Authority employees, contractors, tenants, customers and others, as necessary, in both emergency and non-emergency situations. The Call Tree is an integral part of the Authority’s Business Continuity and Disaster Recovery efforts.  Bid documents were downloaded electronically from the Authority’s Procurement website by 29 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated based on criteria that included, but were not limited to, meeting the functional requirements set forth in the Request for Quotations (‘RFQ’); product quality, ease of use and support; implementation experience; application security; technical merit of the proposal and price.  After initial evaluation, the four highest-priced proposals were not evaluated further. The three remaining bidders were invited to make presentations and demonstrate their applications to Authority staff.  Their respective products were evaluated further based on the following criteria: application functionality and administration, pricing, restrictions to the type of calls generated, organizational stability and application security (compliance with ‘SAS70’ standards).  Of these three, the lowest-priced bidder did not meet all functional and security requirements; the other bidder did not meet all functional and technical requirements and their actual price was higher than initially indicated.  Staff therefore recommends award of a contract to FirstCall, the lowest-priced qualified bidder, which meets all the functional and technical requirements as set forth in the RFQ.  The product meets all Authority requirements for activation, staffing (24/7/365), devices supported, data input and reporting. There are no restrictions on the type of calls generated or the numbers of users and contacts.  Additionally, FirstCall is SAS70 compliant and has communication centers in three different power grids within the country for redundancy and ease of failover.  The contract would become effective on March 1, 2010 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $83,200.

Corporate Support Services

“Due to the need to commence services, the contract with Over Rock, LLC (‘Over Rock’) (Q09-4595; 4500181184) for on-call masonry, snow removal and landscaping services for the Authority’s Clarence D. Rappleyea Building (White Plains Office), as well as snow removal for an off-site storage warehouse in Pleasantville, New York, became effective on November 1, 2009.  The contract award, in the initial amount of $50,000, was authorized in accordance with the Authority’s Guidelines for Procurement Contracts and EAPs, subject to the Trustees’ ratification and approval at their next scheduled meeting.  Bid documents were downloaded electronically from the Authority’s Procurement website by 26 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Five proposals were received and evaluated. Bidders could submit proposals for any or all of the three services categories.  The Authority reserved the right to award one or multiple contracts.  Based on its experience and ability to perform such work, in addition to its competitive pricing, staff recommends award of one contract for all three services to Over Rock, the lowest-priced bidder, which is qualified to perform such services and meets the bid requirements. It should also be noted that the building and grounds are LEED-EB Gold Certified by the United States Green Building Council (‘USGBC’), requiring the landscape contractor to make every effort to maintain the certification by using acceptable practices approved by the USGBC.  The intended term of the contract is up to five years, subject to the Trustees’ ratification and approval, which is hereby requested. Approval is also requested for the total amount expected to be expended for the term of the contract, $3 million.

Power Supply

“The contract with DCB Elevator Co., Inc. (‘DCB’; 20046085; PO# TBA) would provide for monthly maintenance services for approximately 25 elevators, escalators and wheelchair lifts located in various buildings at the Niagara Project (including the Robert Moses Power Plant, the Lewiston Pump Generating Plant, Power Vista, the General Maintenance Building and other support facilities), as well as for on-call repairs performed on a time-and-material basis. The Authority conducted a mini-bid among five pre-approved contractors for the geographic region, based on a New York State Office of General Services contract for such services. Bid documents were sent to the five invited bidders.  Four proposals were received and evaluated.  Staff recommends award of a contract to DCB, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under an existing contract for such work.  The new contract would become effective on or about January 1, 2010 for an intended term of up to four years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $350,000.

“The contract with Garnet River, LLC (‘Garnet River’; Q08-4457; PO#s TBA) would provide for software application migration services (i.e., code conversion) in support of the Energy Scheduling & Accounting (‘ES&A’) system software upgrade at the Energy Control Center.  Such services are necessitated by the discontinuation of support by another vendor for the existing FORTE software, which is one of the main components of the Authority’s ES&A application.  Staff’s investigation of upgrade options determined that code migration (from FORTE to JAVA, which is more of the industry standard) is the preferred and more cost-effective solution, rather than replacement of the entire system. The resulting migrated code will retain the exact functionality of the existing FORTE system, no business processes will change and no user training will be required. Bid documents were downloaded electronically from the Authority’s Procurement website by 59 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Five proposals were received and evaluated.  Staff recommends award of contracts to Garnet River, the lowest-priced bidder, which is technically qualified to perform such work and meets the bid requirements.  The contract would become effective on December 16, 2009 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Staff anticipates that the implementation of the code migration should be completed within six months.  The remaining period is for maintenance support, as may be required, to commence upon acceptance by the Authority of the ES&A code migration. Approval is also requested for the total amount expected to be expended for the term of the contract, $1.4 million (including contingency to allow for additional enhancements, as may be required).

“The contract with Holzmacher, McLendon and Murrell, PC (‘H2M’) (Q09-4617; PO# TBA) would provide for environmental sampling and laboratory analysis at the Authority’s Southeastern New York (‘SENY’) plants, in compliance with State Pollutant Discharge Elimination System (‘SPDES’), Major Oil Storage Facility (‘MOSF’) and Resource Conservation and Recovery Act (‘RCRA’) testing requirements, as well as New York State Department of Health (‘NYS DOH’) and Department of Environmental Conservation (‘DEC’) methodologies and reporting requirements and New York City Department of Environmental Protection (‘NYC DEP’) Waste Water Directives. The provider must also maintain NYS DOH Environmental Laboratory Approval Program (‘ELAP’) certification for non-potable water and solid and hazardous waste. Services include, but are not limited to, the identification of various contaminants/levels in wastewater, waste oils, soil samples and hazardous waste, at prescribed frequencies or on an ‘as needed’ basis.  Bid documents were downloaded electronically from the Authority’s Procurement website by 33 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Six proposals were received and evaluated.  Staff recommends award of a contract to H2M, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under an existing contract for such work.  The new contract would become effective on or about January 1, 2010 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $350,000.

“The contract with Konecranes, Inc. (‘Konecranes’) (Q09-4555; PO# TBA) would provide for upgrade design and installation, maintenance, repair and related inspection services for cranes and hoists at all Authority operating plants and facilities, as needed.  Services also include providing spare parts and materials, safety bulletin analyses and resulting required repairs, OSHA compliance inspections and any other crane-related work, as may be required.  All services will be performed in accordance with Authority site operating and safety procedures and all applicable codes and standards, including, but not limited to, manufacturers’ specifications and industry standards, Occupational Safety and Health Administration regulations and all local, State and federal requirements. Bid documents were downloaded electronically from the Authority’s Procurement website by 32 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated based on proposal completeness, experience, safety record, cost, etc.  The three lowest-priced proposals were evaluated further.  Based on historical usage data and quoted hourly rates, staff calculated the projected costs of various typical work activities for each of four work durations (1-, 4-, 8- and 15-day) for the major facilities. Staff recommends award of a contract to Konecranes, the lowest-priced evaluated bidder, which is qualified to perform such services and meets the bid requirements. The firm has a proven record of experience in such services and demonstrated the necessary resources, training, qualifications and financial stability to guarantee quality routine and/or emergency repairs and to ensure that all work is performed in accordance with all applicable standards and requirements.  The contract would become effective on or about January 1, 2010 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $1.125 million.

“The two contracts with Miller Environmental Group, Inc. (‘Miller’) and WRS Environmental Services, Inc. (‘WRS’’) (Q09-4566) would provide for general environmental services for the Authority’s SENY plants (including Poletti, 500 MW, Flynn and the Small Clean Power Plants). Such services would consist primarily of cleaning process equipment (including, but not limited to, tanks, oil/water separators, economizers, burners, etc.); transporting and disposing of hazardous materials generated by such cleaning and providing environmental and safety training to the Authority, as may be required. Bid documents were downloaded electronically from the Authority’s Procurement website by 58 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Six proposals were received and evaluated on the following criteria: completeness of the proposal (including, but not limited to, description of the bidder’s spill response and clean-up capabilities and land oil spills;  amount and type of available equipment and staging locations; U. S. Coast Guard Oil Pollution Act of 1990 (‘OPA 90’) certification for response in a marine environment; current waste transporter permit; description of health/safety and training programs); distance of equipment to the SENY facility, etc.  Based on their inability to meet some of the foregoing requirements, three bidders were eliminated from further consideration. The three qualified bidders were then ranked based on a cost analysis for response and clean-up of a typical land oil spill scenario calculated on each bidder’s hourly rates. Staff recommends award of contracts to two firms: Miller, the lowest-priced bidder that is qualified to perform such services, meets the bid requirements and has provided satisfactory services under an existing contract for such work; and WRS, the next-lowest-priced qualified bidder that meets the bid requirements.  The award of contracts to two firms would ensure sufficient resources and services in case of equipment failures or other unforeseen situations. The contracts would become effective on or about January 1, 2010 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total aggregate amount expected to be expended for the term of the contracts, $600,000.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.

“The contract with Sara L. Mendelsohn, MD, PLLC (‘Dr. Mendelsohn’) (Q09-4615; PO# TBA) would provide for annual physical examinations and miscellaneous medical services for approximately 25 employees at  the Richard M. Flynn Plant, as required by all applicable safety and health standards, federal and State requirements and Authority policy.  Services include, but are not limited to, annual physical examinations and records management services, as well as respirator clearance tests, where applicable, and additional testing for crane operators and various occupational/industrial exposures, such as asbestos and high noise. Bid documents were downloaded electronically from the Authority’s Procurement website by seven firms, including those that may have responded to a notice in the New York State Contract Reporter.  Two proposals were received and evaluated.  Staff recommends award of a contract to Dr. Mendelsohn, the lower-priced bidder, who has the technical qualifications and credentials to perform such services and meets the bid requirements. The contract would become effective on or about January 1, 2010 for an intended term of up to three years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $50,000.

“The contract with Siemens Water Technologies (‘Siemens’) (Q09-4622; PO# TBA) would provide for the rental of mobile trailer-mounted demineralizer units and related specialized equipment and services for portable demineralized water treatment systems to support the Small Clean Power Plants located at six sites in New York City and one in Brentwood, Long Island.  The vendor will own, operate and maintain the equipment that will supply demineralized water for injection into the Authority’s LM6000 combustion turbines, as well as for cleaning the machines and for power enhancement using the Sprint system.  Bid documents were downloaded electronically from the Authority’s Procurement website by six firms, including those that may have responded to a notice in the New York State Contract Reporter.  Three proposals were received and evaluated.  Staff recommends award of a contract to Siemens, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under an existing contract for such equipment and services.  The contract would become effective on or about January 1, 2010 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $4.5 million.

“At their meeting of June 29, 2004, the Trustees approved the award of a contract to Stone & Webster, Inc. for design services for three Habitat Improvement Projects and for improvements to the Wilson Hill Wildlife Management Area (‘WHWMA’), in support of the implementation of environmental improvement projects at the St. Lawrence/FDR Power Project (‘Project’) required for relicensing compliance. Construction of several components of the WHWMA improvements was delayed due to several factors.  Foremost among these were:  (1) reconsideration by local stakeholders and the New York State Department of Environmental Conservation (‘NYS DEC’) of the approach to water level management, resulting in the addition of the new pumphouse to the project scope; (2) extended discussions with NYS DEC and local stakeholders regarding the use and finished surface of the new dike, which will provide a second accessway to the Wilson Hill community and (3) discovery of a potentially historic structure (buried remnants of a pre-1860s ‘corduroy road’) during excavation for the new dike base, requiring investigation under the Authority’s Historic Properties Management Plan and ultimately resulting in the redesign of the new dike.  Since the original contract is expiring,  construction of significant components of the WHWMA improvements has not been completed, and current Procurement Guidelines prohibit the term of a personal services contract from exceeding five years, staff recommends the award of a new contract to Stone & Webster Engineering New York, P.C. (‘Stone & Webster’) (Q09-4653; PO# TBA) to provide for the continuation of design and engineering support services related to the ongoing refurbishment of dikes and construction of a new pumphouse at the WHWMA.  Continued design and engineering support is needed for the pumphouse during, and upon completion of, construction to address design questions that may arise during construction and to furnish the record drawings for the completed installation.  As the Engineer of Record for these facilities, Stone & Webster is familiar with all the design bases and other considerations that influenced their design, and would be the only firm in a position to readily vouch for the adequacy of the design and to furnish sealed record drawings. The same holds true for the record drawings that are still needed for the completed installations designed by Stone & Webster for the outlying dikes.  The new contract would become effective on or about January 1, 2010 for an intended term of up to two years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the total amount expected to be expended for the term of the contract, $250,000 (using unspent funds from the expiring contract).

FISCAL INFORMATION

“Funds required to support contract services for various Business Units/Departments and Facilities have been included in the 2010 Approved O&M Budget.  Funds for subsequent years, where applicable, will be included in the budget submittals for those years.  Payment will be made from the Operating Fund.

“Funds required to support contract services for capital projects have been included as part of the approved capital expenditures for those projects and will be disbursed from the Capital Fund in accordance with the project’s Capital Expenditure Authorization Request.

RECOMMENDATION

“The Vice President – Engineering, the Vice President – Project Management, the Vice President – Project Development, Licensing and Compliance, the Vice President – Environment, Health and Safety, the Vice President – Procurement, the Chief Information Officer, the Chief Technology Development Officer, the Director – Corporate Support Services, the Director – Media Relations, the Director – Video Production Services, the Director – Asset and Maintenance Management, the Regional Manager – Northern New York, the Regional Manager – Western New York, the Regional Manager – Southeastern New York, the General Manager – Clark Energy Center and the Director of Operations (Flynn), recommend that the Trustees approve the award of multiyear procurement contracts to the companies listed in Exhibit ‘1i-A,’ for the purposes and in the amounts discussed within the item and/or listed in the Exhibit.

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Executive Vice President and Chief Engineer – Power Supply, the Senior Vice President – Power Supply Support Services, the Senior Vice President – Enterprise Shared Services, the Senior Vice President – Corporate Communications, the Senior Vice President – Energy Services and Technology, the Senior Vice President – Transmission and I concur in the recommendation.”


 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, the award and funding of the multiyear procurement services contracts set forth in Exhibit “1i-A,” attached hereto, are hereby approved for the period of time indicated, in the amounts and for the purposes listed therein, as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

2.             Discussion Agenda

 

                a.             President and Chief Executive Officer’s Report

 

            On behalf of his neighbors and friends on Long Island, President Kessel welcomed the Trustees to their first meeting on Long Island.  He said that having the meeting on Long Island was part of the effort to have the Trustees’ Meetings all over the State.  He said that the Authority has a very important relationship with Long Island and the Long Island Power Authority (“LIPA”), noting also the power the Authority provides to LIPA for resale to the Brookhaven National Laboratory.  He said that the Authority has two plants on Long Island, the Flynn plant at Holtsville and the Brentwood plant, as well as a number of transmission lines.  He added that the Authority had been the contractor for the decommissioning of the Shoreham nuclear power plant.

President Kessel provided an overview of his activities during his first year on the job.  He said that it had been an exciting and challenging year, and cited the efforts of the Authority’s dedicated and hard-working employees.  President Kessel said that he had met three to four times during his first year with the Regional Managers and had met with the Authority’s union employees and that he meets once a month with his senior staff and their direct reports (40-45 people in total).  Starting in January, he and Mr. Gil Quiniones will meet once a month with just senior staff, as well as the individual business units.  President Kessel said that he has an advanced, ambitious and full agenda for the coming year and that he expects the Authority will continue to make even more progress in 2010.

President Kessel said that his objectives for his first year had been to:  (1) restore the Authority’s integrity and reputation,; (2) focus on upstate New York; (3) upgrade the State’s transmission system, including the possibility of a major north-south transmission line; (4) continue to pursue ambitious energy efficiency and renewable energy goals; (5) manage the Authority’s finances efficiently and (6) operate and maintain the Authority’s assets to the highest standards possible.  He gave the following update on the progress that had been made toward these objectives:

Restoring the Authority’s Integrity:

·         Cooperated fully with the New York State Office of the Attorney General investigation of past Authority practices.

·         Eliminated the Authority’s Office of Inspector General.

·         Restructured the Travel Office.

·         Reviewed the use of and expenses connected with the Authority’s plane and set new criteria for its use to enhance cost-effective operation.  President Kessel reminded the Trustees that he flew commercial whenever feasible.

·         Established new internal controls and audit practices.

·         Continually reviewed and reassessed internal activities.

·         Complied diligently with State laws that govern public authorities.

·         Increased transparency by holding Trustees’ Meetings at various locations around the State.

·         Conducted extensive public and media outreach.

·         Enhanced the Authority web site with videos and other new features.

 Enhancing the Authority’s Reputation and Building Goodwill

·         Unprecedented outreach to all levels of government, key business and environmental stakeholders, media outlets and editorial boards statewide, municipal and electric cooperative partners and major customers.

Upstate Focus

·         79 business trips north of White Plains:

n  Western New York:  27 visits, including 24 to Buffalo/Niagara area.  1,850 new or saved jobs at Erie Canal Harbor Development Project, Yahoo (125), Steel Development (200), Globe Specialty Metals (138), GEICO (300), University of Buffalo Solar Project and Great Lakes Offshore Wind Project.

n  North Country:  18 visits, including 13 to Massena/Watertown area.  More than 1,000 new or saved jobs at ALCOA (900), North Country Stimulus Program (3,500 businesses and farms received 9% rate discount), pushed for approval of land swap to complete the Tri-Lakes Transmission Line Improvement Project (which necessitated an amendment to the State Constitution).

n  Central New York:  13 visits, including 4 to Syracuse area.

n  Capital District:  21 visits, including 20 to Albany.

n  Hudson Valley, New York City, Long Island and Washington:  14 events.


Upgrading Transmission System

Need a 21st century system

·         Existing system in good state of repair and robust.

·         Need Smart Grid technologies to enhance reliability and energy efficiency.

·         Hydro-Quebec North/South transmission system would import hydropower from Canada and make existing wind power in New York State deliverable beyond local generation area.

·         Hudson Transmission Project.

Energy Efficiency Projects

More ambitious than ever

Renewable Energy Goals

Wind and solar power

n  RFP issued December 1.

n  Tremendous national and worldwide interest.

n  Huge boost to Western New York economy.

n  Significant local support.

n  Will issue RFP within next few weeks.

n  Significant interest already.

n  RFP possible in the spring of 2010.


 

The Authority’s Finances

Solid (thanks to Mr. Joseph Del Sindaco and Mr. Donald Russak)

Power Supply Operations

The Gold Standard

·         Highly dedicated and professional team of management and union personnel (led by Mr. Edward Welz and Mr. Steven DiCarlo).

·         High percentage of facility availability.

·         Superior safety record.

·         Constantly seeking to improve operations.

·         Working with municipal and rural electric cooperatives.

·         Working with Long Island Power Authority with regard to National Grid’s sale of its Long Island plants.

2010

Will continue to:

President Kessel finished his overview by saying that the Authority has a great team in place and that there would be more of an internal focus in 2010. 

Trustee Eugene Nicandri said that congratulating staff on their professionalism and performance only goes so far and that Authority employees are entitled to appropriate pay raises and incentive awards.  He said that providing employees with raises/incentives would increase State income tax revenues and help the Authority hire and retain good people, with no outlay of tax dollars.  President Kessel said that he was in discussions with the Governor’s Office about raises for non-union employees.  Vice Chairman Foster said that the Trustees had discussed this with President Kessel before and that he wanted President Kessel to publicly commit to come back to the Trustees at the February 2010 meeting to present a proposal.  President Kessel said he would be getting back to the Trustees very shortly on this issue.  Vice Chairman Foster said that if the Governor’s Office does not agree with the Trustees about raises for Authority employees, the Trustees may have to decide what their next step will be.  Chairman Townsend asked President Kessel to put this item on the Trustees’ January meeting agenda. 

                Chairman Townsend said that he’d like to see the Authority doing more in terms of wind power and Smart Grid projects and asked that staff prepare presentations that would provide the Trustees with more specifics on these two issues.  He said that overall he was very pleased with President Kessel’s performance during his first year and that he would give President Kessel an “A-minus.”  He said that he had been at the Canal Project event in Buffalo on Saturday and that it was obvious that President Kessel had turned around Western New York media and local politicians, but that it was important to maintain this new attitude on their part for the next four to five years.  Chairman Townsend also asked that Ms. Terryl Brown ensure that the legal documents for the Canal Side project have “teeth” in them. 

                Trustee Curley said that he was particularly glad to hear about the harmonious relationship President Kessel has developed with his colleagues and with the Trustees.  He said that he had been very pleased to hear President Kessel say, on more than one occasion, “I’ll have to take that up with my board,” when approached by various stakeholders.  He said that this good working relationship has not gone unnoticed on the federal level, either, specifically in the House of Representatives.  President Kessel acknowledged that his relationship with the Trustees had been a little difficult at first.

                Trustee Nicandri said that as part of the due diligence required by the recent amendment to the Public Authorities Law signed by the Governor, he would like to sit in on one of President Kessel’s senior staff meetings.  President Kessel suggested that he sit in on the January senior staff meeting.    

 

 

 

 

b.             Chief Operating Officer’s Report

 

 

The Power Authority surpassed its year-to-date targets for both system wide net generation and transmission reliability through the end of November.  In addition, with a month remaining to add to the total, NYPA exceeded the full year’s goal for investment in energy efficiency projects.

               

                Because there was no submittal in November, this report covers developments over the past two months.

 

POWER SUPPLY

 

Plant Performance

 

System wide net generation for the year through the end of November was 24,987,667 megawatt hours (MWH), surpassing the target of 23,957,654 MWH.1,2   The plants were available to produce electricity 92 percent of the time during that period, while the unforced capacity rating was 98 percent, compared with the target of 98.5 percent.3

               

There was no significant forced generation outages in October, extending the period without such events to four consecutive months.4  However, a significant forced outage occurred from November 29 through December 1 at the 500-megawatt combined-cycle plant because of an interruption of service on the plant’s computer system.  One of the three affected units was out of service for 40 hours, while the two others resumed operation on November 30 after being shut down for 27 and 33 hours, respectively.

 

The total lost opportunity costs of all unscheduled generation outages during October and November were $27,000 and $11,000, respectively, compared with generation revenues of $161.5 million and $143.1 million.  The year-to-date lost opportunity cost through November was $930,000, compared with revenue of $1.85 billion—or 0.05 percent of total revenue.

 

 

Performance during October and November:

 

 October

 

                Net generation:  2,174,071 MWH (target—2,178,190 MWH)

            Plant availability:  84 percent

             Unforced capacity rating:  99.8 percent (target—98.5 percent)

                                                          

November

 

                Net generation:  2,240,538 MWH (target—2,219,201 MWH)

            Plant availability: 83.5 percent

                Unforced capacity rating:  96.6 percent (target 98.5 percent)

               

October marked the first month of 2009 in which system wide net generation was below the target.  This was attributable to lower-than-anticipated river flows.

 

Transmission Performance

 

                The transmission reliability for the year through the end of November was 97.50 percent, exceeding the target of 96.27 percent.5

 

                The reliability results for October and November:

 

October:  92.54 percent (target 90.58 percent)

November:  98.64 percent (target 97.49 percent) 

 

There were three forced transmission outages in October and two in November.  The October outages were attributable to emergency circuit breaker repairs for a portion of the 765-kilovolt line from Quebec to Massena (less than one hour), replacement of a capacitor at the Marcy Substation (less than 14 hours) and replacement of a defective voltage transformer at the Marcy Substation (less than nine hours).6,7,8  The November outages, both for unknown causes, occurred for less than two hours and for 13 hours, respectively, at the Marcy Substation.  All four outages at Marcy resulted from problems on Capacitor Bank 1.9

 

Life Extension and Modernization Programs

 

                Three of the four pump-generating units at the Blenheim-Gilboa Pumped Storage Power Project resumed operation in November as work continued on the fourth as part of the project’s Life Extension and Modernization (LEM) program.10  The entire project had been removed from service in September to permit a dewatering of the upper reservoir that was required for replacement of the spherical valve on the fourth unit, which is now undergoing a full-scale refurbishment.11

 

                Completion of the current work, expected in June 2010, will mark the conclusion of the four-year LEM project.

 

                Refurbishment of the 12th of the 16 units at the St. Lawrence-Franklin D. Roosevelt Power Project continued on schedule for a planned completion in December.  The entire LEM program at St. Lawrence-FDR is expected to be completed in 2013.

Transmission Initiatives

 

System Planning Study—NYPA and National Grid continue to conduct a combined system planning study and have provided Con Edison and the Long Island Power Authority (LIPA) with detailed information on this effort.  As stated in my October report, the study is focusing on three options for a transmission line that would carry power from Canada and upstate renewable energy projects to New York City, with the potential for an increase of 1,500 megawatts in transfer capability.  In addition, NYPA and National Grid are pursuing a non-disclosure agreement with Hydro-Quebec Trans Energie (HQTE), the entity that operates the transmission system in Quebec and markets system capacity.  The agreement will facilitate further studies with HQTE.

               

NYPA and National Grid have shared the results of their preliminary economic studies with Con Edison and LIPA in preparation for a coordinated effort to carry out more-detailed economic analyses.  (The four organizations have signed a non-disclosure agreement covering the system planning and economic studies.)

 

Tri-Lakes Power Project—New York State voters on November 3 approved by 67 percent to 33 percent an amendment to the State Constitution authorizing the use of two miles of Forest Preserve land for part of the new 46-kilovolt power line that will help to resolve longstanding power delivery problems in the Tri-Lakes region of the Adirondack Park.12  President and CEO Kessel had promoted public awareness of the amendment’s importance in appearances in the project area and on Long Island and in a letter to newspapers throughout the state. 

 

The line, built through a cooperative effort by the Authority, National Grid and the villages of Lake Placid and Tupper Lake, has been in service since last May, but approval of the amendment resolved the last remaining legal issue.

 

The amendment, previously passed by two separately elected State Legislatures, was strongly supported by the environmental community because use of the Forest Preserve land along a state road averted construction in a more-sensitive forest and wetland area.  As a further benefit, the amendment provides for the state to receive at least 10 acres of forest property from National Grid in return for transfer to the utility of no more than six acres of Forest Preserve land for use on the line’s right-of-way. (The actual conveyance from National Grid is expected to exceed 43 acres.)

               

NYPA obtained regulatory approvals for the 23-mile line and financed its construction. We will transfer ownership to National Grid in 2012.

 

Organizational Realignment

               

The ongoing assessment of potential operational interfaces between the Power Generation and Transmission units is proceeding toward completion in the first quarter of 2010. 

 

Meanwhile, additional recommendations for realignment surfaced as a result of the intense activity associated with preparation for self-certification of compliance with the North American Electric Reliability Corporation’s reliability standards for Critical Infrastructure Protection.13  (This initiative is discussed in further detail in the Corporate Services and Administration—Information Technology—section of this report on Page 7.)  Our consultant, Scott Madden, is reviewing the recent recommendations.

 

 Also being reviewed are potential interfaces between the Energy Control Center, Energy Resource Management and Power Generation operations, with the goal of identifying organizational synergies 10 years after the restructuring of the state’s electricity markets and the formation of the New York Independent System Operator.14

 

ENERGY SERVICES AND TECHNOLOGY

 

Energy Efficiency Investment

 

                NYPA’s investment in energy efficiency projects during October and November brought the year-to-date total to $129.2 million, surpassing the annual target of $120 million.  Overhead cost recovery in the two months resulted in a drop in the yearly figure to 98 percent, but kept us within reach of the annual goal of 100 percent.

 

               


 

The figures for October and November:

 

October

 

                Investment:  $12.5 million

            Overhead Cost Recovery:  58 percent

 

November

 

                Investment:  $12.2 million

                Overhead Cost Recovery:  95 percent

 

Clean-energy benefits

 

                Year-to-date clean-energy benefits provided by NYPA through the end of November totaled 215,400 megawatt hours (MWH), keeping the Authority on course to attain the annual goal of 234,000 MWH.  The year-to-date total included 50,300 MWH from new energy efficiency projects and 165,100 MWH from operation of new and previously existing renewable energy projects and purchases of renewable energy attributes.15

 

                The figures for October and November:

 

October

 

Total clean-energy benefits:  17,732 MWH

Energy efficiency:  6,732 MWH

Renewable energy projects and attributes:  11,000 MWH

 

November

 

Total clean-energy benefits:  21,711 MWH

                Energy efficiency:  4,711 MWH

            Renewable energy projects and attributes:  17,000 MWH

 

 

Advancing Clean Technologies

 

                100-Megawatt Solar Project—We remain on track to issue a Request for Proposals in December to potential developers for this project.16  Follow-up meetings with various stakeholders were held in October, with the New York State Education Department and the New York State Energy Research and Development Authority among the participants. 

 

The Metropolitan Transportation Authority (MTA) has decided to participate in the project, which entails a public-private partnership to install up to 100 megawatts of solar photovoltaic capacity at sites throughout the state. As I reported last March, we had been working with the MTA to develop a solar power purchase agreement associated with the installation of solar panels at the agency’s facilities.  Those plans have now been postponed, but may be reconsidered, depending on the outcome of the 100-megawatt initiative.

 

SUNY Canton Wind Project—A feasibility study completed for NYPA in November indicated that installation of a 600-kilowatt wind turbine at the State University of New York College at Canton may be feasible.  The project, which would provide electricity to the campus, would also include the installation of a battery energy storage system to enable the wind power to better meet peak loads.

 

Advanced Technology

 

                Sound Cable Project Protection System—Staff in November completed repairs to the cathodic protection system for the Authority’s 345-kilovolt Sound Cable Project.17  The system, installed in 1999, prevents corrosion of the four transmission cables that run eight miles beneath Long Island Sound from Westchester County to Nassau County, extending their life expectancy by at least 15 years.  Staff repaired malfunctioning equipment, installed new control systems and incorporated new technologies that were not available during original construction of the $300 million project.  Titanium anodes were used to ensure the system’s endurance.18  The system also includes wireless communication and a dedicated server to allow remote access for data verification.

 

                White Plains Office Fuel Cell—Installation of a 200-kilowatt fuel cell adjacent to the White Plains building is continuing, with startup scheduled for late December or January.  The unit was delivered on October 31.

 

Construction

 

New York City Department of Sanitation, 26th Street (Manhattan)—Construction began in October on this $856,000 project, which includes efficient lighting and motors as well as occupancy sensors.  Annual energy cost savings of about $130,000 are anticipated, along with a yearly reduction of almost 820 tons of carbon dioxide emissions.  The project is expected to be completed in the first quarter of 2010.

               

New York City Department of Environmental Protection, Red Hook (Brooklyn)—All critical milestones have been completed on or ahead of schedule for this $36 million project at the Red Hook Water Pollution Control Plant, discussed in my September report.  The project remains on track for completion in June 2011. 

 

New York State Office of General Services, Empire State Plaza (Albany)—Construction is expected to begin in the spring of 2010 on this $240,000 project at the Plaza’s East Garage.  The project, scheduled for completion by the end of 2010, will include controls that will reduce indoor perimeter lighting when outdoor light is available and will provide access and lighting to only the first level during nights and weekends.  Annual energy cost savings of almost $40,000 and a reduction of about 230 tons in yearly carbon dioxide emissions are anticipated.

 

Weatherization

 

                Housing Authorities—The distribution of weatherization kits is expected to begin this month to approximately 16,000 residents of Westchester County and New York City housing authority units.

 

                Municipal and Rural Cooperative Systems—Twelve municipal electric systems and rural cooperatives have enrolled in this weatherization program, and Customer Installation Commitments are in development.19

 

MARKETING AND ECONOMIC DEVELOPMENT

 

Replacement Power/Expansion Power Contract Extensions

 

                An evaluation of long-term contract extensions for Western New York businesses that receive replacement power and expansion power from the Niagara Power Project is expected to be completed by the end of the year.20

 

                As noted in my October report, the majority of the current contracts expire on January 1, 2013, for replacement power and on July 1, 2013, for expansion power.  Numerous businesses have requested extensions, both to facilitate investment decisions and to permit greater certainty with respect to costs.

 

                In a related matter, the Trustees will be asked at the December meeting to approve “bridge” extensions through the 2013 dates for 51 contracts that are scheduled to expire sooner.  Action on this item, involving 42 companies, will complete the process of extending all replacement power and expansion power contracts that would otherwise expire before 2013. New long-term contracts with these companies that result from the current evaluation would take effect on January 1 or July 1 of that year, depending on the class of power.

 

CORPORATE SERVICES AND ADMINISTRATION

 

Procurement

 

                The Authority continues to substantially exceed its annual goal of providing at least 6 percent of applicable contract awards to New York State-certified minority- and women-owned business enterprises (MWBEs). 21  We expect the value of awards to MWBEs through the end of the year to surpass $55 million, or more than 20 percent of the applicable total.  The figures cover direct contracts and subcontracts, including construction-related work.

 

                Debra White, NYPA’s manager of supplier diversity, was named a 2009 Champion for Diversity in the September/October issue of DiversityPlus magazine.  Ms. White was among 25 winners selected from almost 100 nominees submitted by M/WBE suppliers from throughout the nation.  Winners were chosen based on significant accomplishments in promoting diversity and represented such organizations as General Motors, Walt Disney, AT&T, American Express and New York Life. 

 

INFORMATION TECHNOLOGY

 

Power Net—The Information Technology group successfully launched an expanded Power Net—the Intranet service for NYPA employees—in the SharePoint environment.22  The new Power Net provides employees with additional information about the Authority, advanced search capabilities, an updated phone directory with employee photos (subject to individual option), contact information and organizational reporting structures.

               

Critical Infrastructure Protection—The Authority is completing a Critical Infrastructure Protection project, as required by the North American Electric Reliability Corporation (NERC), with the goal of ensuring that all procedures for protecting NYPA’s critical cyber assets are in place by the end of the year.  The compliance initiative, carried out over the past two years, has been a major effort involving development of new work processes, deployment of staff and installation of new hardware and software. 

 

This is the first year in which NERC has required individual electric utilities to certify compliance with its infrastructure protection requirements.

 


 

CORPORATE SUPPORT SERVICES

 

Business Continuity Plans—Development of a Business Continuity Plan is under way at the Frederick R. Clark Energy Center, with completion expected by the spring.  Similar efforts will begin at the Authority’s other major generation and transmission facilities early in 2010.  The plans are intended to ensure that essential business operations continue during and after an emergency or other unforeseen event affecting a facility, major systems or key personnel.

               

The annual Headquarters Business Continuity Plan exercise was held on December 2 in the White Plains Office, with approximately 80 staff members participating in a simulated drill to test readiness to execute the plan. 

 

Fifth-Floor Renovation—A renovation of the fifth floor in the White Plains building will be completed by the end of December, with staff moving into the area in early January.  The project has met Certified Interior Standards for commercial buildings under the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program.23  (The standards apply to such features as construction materials, lighting and measures to enhance air quality.)  Groups relocating to the renovated area will include Enterprise Shared Services Administration, Corporate Support Services Administration, Procurement, Travel and Flight Operations, Facility Management and Environmental Health and Safety.

 

FLEET MANAGEMENT

 

                A fleet disposal auction on November 21 resulted in net sales for the Authority of $230,000.  The auction, the second conducted under a three-year contract with J.J. Kane Auctioneers, was held at National Grid’s facility in Rome, N.Y.  Vehicles auctioned by NYPA included cars, trucks, off-road and construction equipment and miscellaneous fleet items.

 

POWER RESOURCE PLANNING AND ACQUISITION

 

Great Lakes Offshore Wind Project (GLOW)

 

                President and CEO Kessel on December 1 announced the release of the Request for Proposals (RFP) for the Great Lakes Offshore Wind Project (GLOW).  Proposals are due by June 1, 2010, and awards are anticipated by the end of next year.  The RFP and related documents are available on the NYPA Web site, which will also include pertinent information from reports by our consultants, as well as questions and answers of general interest to bidders and the public.

 

                The GLOW project team expects to obtain additional reports from our consultants on such matters as site screening and vessel and port availability.

 

Long Island-New York City Offshore Wind Project

 

                Meeting on November 12, the Executive Committee of the Collaborative for the Long Island-New York City Offshore Wind Project agreed to issue a Request for Proposals to potential developers in April 2010.24  Outreach efforts continue with the federal Minerals Management Service, which would handle much of the permitting for a project on the Atlantic coast.  Collaborative members are also working on a Memorandum of Understanding on cost sharing for the project, and drafts are being circulated.

 

Hudson Transmission Partners Project

 

                Negotiations with Hudson Transmission Partners on potential cost-cutting measures continue, along with discussions with customers on costs and benefits of the project.

 

Village of Solvay Request for Proposals

 

                Thirteen responses to the Request for Proposals to manage incremental load for the Village of Solvay municipal system in Onondaga County were received on October 29.25  The responses included financial hedge offers and physical plant bids from existing and proposed facilities.26  Staff is working with the village to evaluate the proposals and expects to recommend that the Trustees approve an award to one or more suppliers at the January meeting.

 

OFFICE OF THE CHIEF OPERATING OFFICER

 

Federal Stimulus Package

 

                On November 24, the Authority was awarded $720,000 under the U.S. Department of Energy’s (DOE) Smart Grid Demonstration Grant program to cover half the cost of its proposal to test dynamic thermal circuit ratings technology on three 230-kilovolt NYPA transmission lines in Northern New York.  The technology, consisting of advanced instrumentation and software, will enable real-time monitoring of the lines’ capacity.  This will allow the lines to accommodate increased power flows from generating sources in the region, primarily wind power plants.

 

                Funding for the $1.4 million project will also come from NYPA and a grant for 10 percent of the total from New York State.  The Moses-Willis, Willis-Ryan and Moses-Adirondack lines will be involved in the program, scheduled to begin next year. NYPA submitted its proposal in conjunction with the Electric Power Research Institute.27

 

                The Authority also stands to receive a share of a $37.3 million grant awarded to the New York Independent System Operator (NYISO) on October 27 under the DOE’s Smart Grid Investment Grant program. The NYISO proposal, which NYPA supported, calls for installation of 35 new phasor measurement units (PMUs) and 19 phasor data concentrators (PDCs) to enhance control, monitoring and communications on the statewide transmission system.28,29  The Authority could receive up to $200,000 for four PMUs and one PDC.

 

                In a separate initiative, NYPA on November 30 submitted a proposal for funding under the DOE’s Energy Workforce Training for the Electric Power Sector program.  The Authority and Siemens Power Technology International have developed an advanced power systems engineering curriculum that NYPA will offer to employees in the Power Supply unit as part of our employee development and succession planning efforts.

 

Comprehensive Emergency Management Plan

 

                A draft of the Authority’s Comprehensive Emergency Management Plan (CEMP) was presented to senior management in November.  In contrast to the Business Continuity Plans, discussed previously, the CEMP establishes a command and control structure to manage an emergency or other unanticipated event and provides for effective communication with external agencies, such as police and fire departments, involved in the response.

 

 

 

  

 

 

GLOSSARY

 

1  Net generation—The energy generated in a given time period by a power plant or group of plants, less the amount used at the plants themselves (station service) or for pumping in a pumped storage facility.

 

2  Megawatt hour—The amount of electricity needed to light ten thousand l00-watt light bulbs for one hour.  A megawatt is equal to 1,000 kilowatts and can power about 800 homes, based on national averages.

 

3  Unforced capacity rating—All power plants have an installed capacity, or ICAP, meaning the amount of power they could generate under perfect conditions.  Since conditions are not always perfect and plants are shut down, there is a second measurement, called the unforced capacity, or UCAP, which is how much power a plant actually can produce.  For New York State power plants, this measurement is influenced by the amount of time a plant is forced out of service when it is called into service through the New York Independent System Operator to provide energy.

 

4  Outage—The removal of a power plant or transmission line from service.  Outages may be scheduled for purposes such as anticipated maintenance, or forced by unexpected events.  A significant forced or emergency outage of an individual generating unit is an event of more than 72 hours in duration, entailing a repair cost of more than $75,000 or resulting in more than $50,000 of lost revenues.  A significant forced or emergency outage of an individual transmission line is an event that directly affects the reliability of the state’s transmission network, or the availability of any component of the network, for more than eight hours or has a repair cost of more than $75,000.

 

5  Transmission reliability—A measurement of the impact of forced and scheduled outages on the statewide system’s ability to transmit power.

 

6  Circuit breaker—A mechanical switching device that connects a generator to the electric grid or disconnects it from the grid. The flow of current is interrupted when a circuit breaker is open.

 

7  Capacitor—A device that can store an electrical charge and is used to support system voltage. (Voltage is a measurement of the force that pushes electricity through a transmission line, much as water is forced through a hose.) The performance of a transmission line, especially those of medium length or longer, depends on maintaining voltage at certain levels.  The maximum amount of power a line can transmit is reduced as voltage decreases.

 

8   Voltage transformer—A device used to step down a transmission system’s high voltage to a safe level that can be used for metering, instrumentation and relaying circuits.

 

 9  Capacitor bank—A collection of individual capacitors.  There are two capacitor banks at the Marcy Substation, each consisting of 720 capacitors and associated equipment.  Each bank is about 90 feet long, 60 feet wide and 20 feet tall.

 

10  Life Extension and Modernization program—A major initiative by the Power Authority to ensure that a particular power project operates at maximum efficiency far into the future.  In Life Extension and Modernization programs currently under way at the St. Lawrence-Franklin D. Roosevelt and Blenheim-Gilboa projects, the turbines are being replaced and the generators and other components significantly refurbished.

 

11  Spherical valve—A component at the bottom of the powerhouse that receives water that has surged downward from the Blenheim-Gilboa project’s upper reservoir and releases it to spin a turbine-generator to produce electricity.  The project has four spherical valves, one for each of its four pump-generating units.  Each spherical valve is about nine feet in diameter and can be closed within 30 seconds if necessary to shut off water from the upper reservoir. 

 

12  Forest Preserve—An area of the Adirondack Park, encompassing almost 3 million acres, that is to remain “forever wild” under ownership of the state.  Sale or lease of Forest Preserve lands requires an amendment to the State Constitution.

 

13  North American Electric Reliability Corporation (NERC)—The organization that develops and enforces mandatory reliability standards for the bulk power system in the United States, issues long-term and seasonal reliability forecasts and monitors the power system.  (NERC standards are also mandatory and enforceable in parts of Canada.) 

 

14  New York Independent System Operator—A not-for-profit organization that operates New York State’s transmission system, administers the state’s wholesale electricity markets and engages in planning and forecasting to ensure the future reliability of the statewide power system.

 

15  Renewable energy attributes—The environmental, social and economic features of renewable energy that may be sold separately from the energy itself; NYPA obtains such attributes on behalf of its New York City governmental customers.

 

16  Request for Proposals—A formal solicitation of bids for a project.

 

17  Cathodic protection system—NYPA’s cathodic protection system for the Sound Cable Project consists of a series of sensors in Long Island Sound and control devices at nearby transition stations.  Corrosion is prevented by offsetting stray current in the cables with an equal amount of current from other sources.

 

18  Anodes—Conductors through which an electric current flows.

 

19  Customer Installation Commitments—Agreements by participating customers authorizing NYPA to proceed with implementation of energy efficiency projects.  If a customer elects to terminate a project after executing the agreement, it will be obligated to reimburse the Authority for all expenses incurred to that point.

 

20  Replacement power and expansion power—Two blocks of hydroelectric power from the Niagara Power Project, totaling 445 megawatts and 250 megawatts, respectively, that are reserved under state law for use by businesses in Western New York, generally within 30 miles of the project. 

 

21  Applicable contract awards—The reportable expenditures that are used to calculate the percentage value of the contracts awarded to minority- and women-owned firms.  Specialty procurements such as major power plant components and natural gas are excluded from this category.

 

22  SharePoint—A new technology enabling multiple Intranet users to simultaneously access the same data.

 

23  U.S. Green Building Council—An organization that promotes practices in building construction and redesign that contribute to human health, a clean environment and the efficient use of energy and water.   The Council administers the Leadership in Energy and Environmental Design (LEED) green building certification program, a national system for rating buildings in the areas of energy efficiency, sustainable site development, water savings, materials and resources selection and indoor environmental quality.  In January 2007, NYPA marked the White Plains building’s designation as the first existing building in New York State to earn a LEED Gold rating, the second highest of four LEED categories.

 

24  Collaborative—The public-private partnership involved in planning for the Long Island-New York City Offshore Wind Project.  In addition to NYPA, it includes Con Edison, the Long Island Power Authority, the New York City Economic Development Corporation, the New York State Energy Research and Development Authority, the Port Authority of New York and New Jersey and the Metropolitan Transportation Authority.

 

25  Incremental load—The energy requirements of a municipal electric system or rural cooperative in excess of its hydroelectric allocation from the Power Authority.  NYPA is responsible for arranging to meet the incremental needs of its 12 full-requirement customers—eight municipal systems (including Solvay) and all four of the state’s rural cooperatives.

 

26  Hedge offers—Transactions that reduce the risk of existing supply prices that are subject to volatility.  Purchasing a fixed price hedge against an otherwise floating price reduces the risk of high prices, but also reduces the opportunity for lower prices. The hedge provides price certainty and usually includes a risk premium to compensate the party that is providing the hedge and ultimately absorbs the price fluctuation risk.

 

27  Electric Power Research Institute (EPRI)—The electric power industry’s international research and technology organization.  The Power Authority has long been active in EPRI and has collaborated with the organization on a number of major initiatives.

 

28   Phasor measurement units—Devices that measure and transmit data in real time, improving awareness of the state of a power system.  The technology helps operators monitor the system, optimize use of the power grid, improve responses to system emergencies and collect real-time data to enhance system planning.

 

29   Phasor data concentrators—Devices that collect and sort data from multiple phasor measurement units and transmit the data to operators.

 

 

 

Trustee Nicandri commended the operations staff for the outstanding job they do and their diligent efforts, with Trustee Curley adding that all of the Trustees were grateful for the generation and transmission’s staff hard work.

 

 

 


 

c.             Chief Financial Officer’s Report

 

Mr. Joseph Del Sindaco presented highlights of the report to the Trustees.

 

Mr. Joseph Del Sindaco said that the net income projection for 2009 had been decreased to $259 million from $274 million because the Authority had lost the lawsuit brought by some Power for Jobs customers, the costs for which would be charged in 2009. 

 


 

3.                             Enhanced Energy Services Programs

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

               

“The Trustees are requested to authorize certain enhancements to the Authority’s Energy Services Programs (‘ESP’).  This request is in response to recently enacted legislation that amends the Public Authorities Law in relation to energy efficiency, clean energy and sustainable building initiatives. 

               

“The new legislation, Chapter 477 of the Laws of 2009, clarifies and expands the Authority’s ability to carry out energy efficiency and clean energy projects for all public entities in the State and at facilities of recipients of the Economic Development Power, Expansion Power, Replacement Power, Preservation Power, High Load Factor Power, Municipal Distribution Agency Power and Power for Jobs programs administered by the Authority (each such recipient, a ‘Business Customer’).  As deemed feasible and advisable by the Trustees, the law allows the Authority to add to the scope of projects and programs offered to these entities, as more fully described below.

 

BACKGROUND

 

                “Since the 1980s, the Authority through its ESP has offered various types of energy services and clean energy programs to eligible participants throughout the State to help them lower their energy usage and/or achieve cleaner and more efficient use of energy and natural resources.

 

                “As an outgrowth of the State’s continuing efforts in the areas of energy efficiency and clean energy technologies (e.g., its 45x15 goal to meet 45% of the State’s electricity needs through improved energy efficiency and renewable sources by 2015 and Executive Order No. 111, which requires agencies to reduce energy consumption while transitioning to renewable energy sources), Governor Paterson signed into law Chapter 477 of the Laws of 2009 on September 16, 2009.  This new legislation amended Section 1005 of the Public Authorities Law by adding a new subsection 16 to enhance the Authority’s ability to provide energy efficiency, clean energy and green building programs and services to reduce energy consumption and mitigate environmental impacts from energy usage, consistent with the State’s energy and environmental policies.  The legislation took effect immediately upon signature by the Governor; it expires three years thereafter.  A copy of the new law is attached as Exhibit ‘3-A.’

 

                “Under the law, as deemed feasible and advisable by the Trustees, the Authority is expressly authorized to finance and design, develop, construct, implement, provide and administer energy-related projects, programs and services for any public entity and for any Business Customer.  ‘Energy-related projects, programs and services’ means energy efficiency projects and services; clean energy technology projects and services; high-performance and sustainable building programs and services and the construction, installation and/or operation of facilities or equipment done in connection with any such projects, programs or services.

 

DISCUSSION

 

                “The recently enacted legislation builds on the Authority’s successful energy and resource conservation programs.  The amendment clarifies and expands the Authority’s mandate to administer programs to reduce energy usage, reduce air pollution, conserve scarce natural resources and facilitate the use of clean energy sources.  It also provides a streamlined process for public entities and the Authority’s Business Customers to access the Authority’s programs, technical expertise and available low-cost financing.

 

                “The new law also grants the Authority statutory authorization to develop and implement sustainable building programs and services (including Leadership in Energy and Environmental Design (‘LEED’) and U. S. Green Building Council (‘USGBC’) programs) and to expand the scope of currently authorized ESP work to include services involving construction, installation and/or operation of facilities or equipment done in connection with any ESP projects, programs or services, provided that the Trustees deem such projects, programs and services feasible and advisable.

“These expanded services, if approved by the Trustees, will help the Authority better serve its customers’ needs.  By adding to its ESP offerings, the Authority will enable its customers to avail themselves of its expertise and low-cost financing to realize maximum energy savings and conservation of natural resources at their facilities.  The new legislation will enable the Authority to implement many requested measures that the Authority previously advised its customers it was unable to implement for lack of statutory authority.  Examples of this are water conservation measures requested by the New York State Office of General Services and State University of New York campuses, and sustainability measures added to projects that would allow participants to achieve LEED certification. 

 

FISCAL INFORMATION

 

                “No additional funding is requested to implement the enhanced ESP.  Existing funding will be provided from the proceeds of the Authority’s Commercial Paper Notes and/or Operating Fund.  In addition, projects may be funded, in part, with monies from the Petroleum Overcharge Restitution (‘POCR’) fund.  All Authority costs, including Authority overheads and the costs of advancing funds, but excluding any grant of POCR funds, will be recovered from the program participants similar to other Energy Services and Technology programs.

 

RECOMMENDATION

 

                “The Senior Vice President – Energy Services and Technology recommends that the Trustees approve the enhancements to the Energy Services Programs described above.

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer and I concur in the recommendation.”

 

                Ms. Helen Eisenfeld presented the highlights of staff’s recommendations to the Trustees.  President Kessel said that the Authority would be hosting a series of events all over the State to highlight the Authority’s Energy Services work.

                The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Trustees hereby authorize the enhancement of the Authority’s Energy Services Programs (“ESP”) consistent with Chapter 477 of the Laws of 2009 as follows:  (a) include as eligible participants all public entities and Business Customers and (b) include as projects, programs or services within ESP:  high-performance and sustainable building projects, programs or services; technologies that reduce air and other pollution and conserve materials and resources such as water and the construction, installation and/or operation of facilities or equipment done in connection with any such projects, programs or services; and be it further

 

RESOLVED, That the Authority’s Commercial Paper Notes and Operating Fund monies may be used to finance ESP projects, programs or services; and be it further

 

RESOLVED, That the Senior Vice President – Energy Services and Technology is authorized to determine which ESP projects will be deemed to be energy services projects within the meaning of Section (7) of Part P of Chapter 84 of the Laws of 2002 (the “Section (7) POCR Legislation”) to be funded in part with Petroleum Overcharge Restitution (“POCR”) Funds allocated pursuant to the Section (7) POCR Legislation; and be it further

 

RESOLVED, That POCR funds allocated to the Authority by the Section (7) POCR Legislation may be used to the extent authorized by such legislation, in such amounts as may be deemed necessary or desirable by the Senior Vice President – Energy Services and Technology to finance projects within the ESP; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

4.             Sustainability Action Plan

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

“The Trustees are requested to approve the Authority’s Sustainability Action Plan, 2010-2012 (the ‘Plan’), which is attached as Exhibit ‘4-A.’

BACKGROUND

 

                “Sustainability is not new to the Authority.  From the Authority’s earliest days of developing renewable hydropower to help support local New York businesses to the Authority’s more recent forays into exploring off-shore wind, the Authority has always sought to be a leader in environmental stewardship and economic and community development.  In an effort to unite many longstanding programs with new strategies, Authority staff has developed the Plan.

 

“In 2007, after a competitive bidding process, the Authority’s Trustees approved a contract with Ove, Arup and Partners (‘Arup’) to work with staff to develop a comprehensive sustainability plan.  An internal team of Authority staff from various business units was assembled as the Sustainability Integration Review Team (‘SIRT’) to work with Arup to identify key issues and detail specific strategies for the Authority to improve its sustainability performance.  The draft plan developed by the SIRT was never officially approved by the Trustees.

 

                “In February 2009, the Authority hired a Chief Sustainability Manager who was charged with developing a new Plan that, following approval by the Trustees, will be implemented Authority-wide.  The SIRT was reassembled and the Arup plan consulted in developing the new Plan.  The Plan identifies 21 key focus areas and 41 separate action items, each with its own specific strategies, targets and budget.

 

                “The Plan was presented to the Executive Leadership Team in June 2009 and has also been shared with several key external stakeholders throughout the State.

DISCUSSION

 

                “Sustainability is defined as the ability to ‘meet today’s needs for environmental stewardship, economic prosperity and social equity without compromising future generations’ ability to meet these needs for themselves.’ Corporate sustainability is a growing discipline, as companies large and small evaluate the effects they have on the environment, the economy and the community.  At a minimum, companies are simply disclosing the issues they are facing, but increasingly more are developing clear strategies to minimize their impacts. 

 

                “Governor Paterson’s Executive Order 4, Green Procurement and Sustainability, calls for agencies and authorities to develop sustainability plans.  While the Authority began its corporate sustainability planning efforts before the Executive Order was issued, the intent of that directive has been incorporated in the Plan.

 

                “The following guiding principle for integrating sustainability into the Authority’s activities was developed:

 

We believe that a company’s commitment to managing all aspects of its business through the lens of sustainability is a powerful indicator for its overall management quality and integrity.  We will make choices at NYPA that reflect a ‘triple bottom line’ approach to sustainability by holistically integrating business objectives with environmental and social concerns.  We will monitor and report on our progress in meeting the sustainability goals we have set for ourselves and strive to be leaders in sustainable innovation.

 


 

FISCAL INFORMATION   

 

                “The Plan leverages several existing initiatives and therefore many action items are covered by existing budgets.  Several action items involve conducting studies and the Plan reflects the costs of the studies only, not the cost of implementing any recommendations from such studies.  The budget for the Plan is $4.668 million over three years, which is a combination of capital and O&M costs, as well as a new staff position in the Environment, Health and Safety department. 

RECOMMENDATION

 

“The Director of Energy Policy and the Chief Sustainability Manager recommend that the Trustees approve the adoption of the Authority’s Sustainability Action Plan.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel and I concur in the recommendation.”

 

            Ms. Jenifer Becker presented the highlights of staff’s recommendations to the Trustees.  Vice Chairman Foster said that he thought the Plan was a terrific idea and that he liked the degree of specificity in it.  He said he looked forward to hearing about what is accomplished as the Plan progresses and asked if other Authorities are moving as quickly as the Power Authority is in this regard.  Ms. Becker said that the New York State Office of General Services has a sustainability plan and that other State agencies’ sustainability plans are tailored to their individual situations.

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Authority’s Sustainability Action Plan, as described in the foregoing report from the President and Chief Executive Officer, and as detailed in Exhibit “4-A,” be, and hereby is, approved; and be it further

               

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

5.             Membership in Electric Power Research Institute – Extension

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to authorize the President and Chief Executive Officer to enter into a five-year extension of the Authority’s existing membership in the Electric Power Research Institute (‘EPRI’) effective January 1, 2010 for an estimated total increase of $12.79 million.

BACKGROUND

 

“EPRI is the premier electric utility research organization, having a 2009 budget of $313 million supported by approximately 425 members.  Members include regulated utilities such as rural cooperatives, municipal and public power systems, investor-owned utilities and federal power agencies.  Responding to the changing utility environment, EPRI has expanded its customer base to also serve unregulated and non-utility entities, international utilities, energy enterprise organizations involved in public benefit programs and equipment manufacturers. 

“EPRI’s mission is to provide science- and technology-based solutions of value to its national and international members.  The organization is aligned with various segments of the electric market in developing technologies, information and methods related to generation, delivery and use of electricity, with special attention to cost reduction, cost-effectiveness, environmental concerns and customer retention.

“EPRI’s large membership enables members to support and leverage a broad array of large-scale research and demonstration projects of mutual interest, some of which could not be supported by an individual entity alone because of their high cost.

DISCUSSION

 

“Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts require the Trustees’ approval for procurement contracts involving services to be rendered for a period in excess of one year.

 

“The Authority has been a member of EPRI since July 1, 1987.

 

“The EPRI membership fee is based on a formula that takes into account generation assets and transmission system peak capacity in MW.  Since 1995, EPRI has provided its members with flexibility in regard to the selection of research program areas and services from its technology portfolio.

 

“On an annual basis, the Research and Technology Development Division, working together with its key stakeholders in various departments, identifies key targets for which the Authority and its customers would derive benefits from EPRI products and services.  For 2009, staff selected approximately 38 programs and 11 sub-programs in the areas of power generation, transmission, environment, distributed resources, power quality and end-use customer energy efficiency.

“EPRI’s programs are planned, developed and implemented by market segments guided by an Industry Committee Structure, consisting of member representatives selected for expertise in their particular fields.  The Authority’s Chief Operating Officer currently serves on the EPRI board and Authority staff represents the Authority at all levels of the EPRI advisory structure -- the Research Advisory Council, and Generation, Power Delivery and Environmental Councils including their associated working groups.

“Through this participation, the Authority has been able to influence EPRI’s direction and obtain numerous benefits from using EPRI’s products and services.  Over the last few years, staff has been effective in obtaining several million dollars of EPRI cofunding for projects of interest to the Authority and have worked closely with EPRI to develop and implement technologies at the Authority’s facilities.  Examples include the development and implementation of the Convertible Static Compensator at Marcy substation, the Reliability-Centered Maintenance (‘RCM’) projects for Circuit Breakers and Substations, the Sodium Sulfur Battery for Long Island Bus, Assessment of Cable Condition at Niagara, Vegetation Management Program for the Authority’s transmission line rights-of-way, Knowledge Capture of Overhead Transmission Line Work Procedures and the 250 kW Molten Carbonate Fuel Cell demonstration.  These projects have resulted in significant benefits to the Authority.

“In view of the Authority’s long working relationship with EPRI, discussions were initiated to secure an extension of the Authority’s multiyear agreement, which would result in a discount for the Authority.  Such a five-year contract extension would start at the level of $2.33 million in 2010 and continue through 2014, with a 3% annual cost escalation and an allowance for new program initiatives, $100,000, such as efficient grid technology projects.  This multiyear extension will save the Authority an estimated $2.26 million over the five-year contract term as compared with purchasing the same services on a year-by-year basis.

FISCAL INFORMATION

“Funds required for the Authority’s 2010 payment to EPRI are included in the 2010 O&M Budget.  Costs associated with future years will be included in the budget submittals for those years.  Payments will be made from the Operating Fund.

RECOMMENDATION

“The Senior Vice President – Energy Services and Technology and the Chief Technology Development Officer recommend that the Trustees authorize the President and Chief Executive Officer to enter into a five-year extension of the Authority’s existing membership in the Electric Power Research Institute effective January 1, 2010, at an annual fee starting at $2.33 million and escalating at the rate of 3% per year, plus program initiative allowance, $100,000, for an estimated total increase of $12.79 million.

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Executive Vice President and Chief Engineer – Power Supply and I concur in the recommendation.”

                Mr. Richard Hackman presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Vice Chairman Foster, Mr. Hackman said that the core of the Authority’s research program is based on EPRI’s programs.  Responding to another question from Vice Chairman Foster, Mr. Hackman said that the Authority would be considered a medium-sized member of EPRI, which has a budget of $313 million.  Trustee Nicandri pointed out that Gil Quiniones serves on EPRI’s Board of Directors. 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Trustees authorize the President and Chief Executive Officer, or such officer designated by the President and Chief Executive Officer, to execute a five-year extension of the Authority’s existing membership agreement in the Electric Power Research Institute (“EPRI”) effective January 1, 2010, in the amounts and for the purpose listed below:


 

                                                                                Expenditure

                                Operating Fund                                                                     Approval  

 

                                Electric Power Research Institute                                 $ 2.33 million  –  2010

                                Agreement number:  4500001167                                 $ 2.50 million  –  2011

                                                                                                                                $ 2.58  million –  2012

                                                                                                                                $ 2.65 million  –  2013

                                                                                                                                $ 2.73 million  –  2014

                                                TOTAL                                                                 $12.79 million

 

 

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 

 

 


 

6.               Niagara Power Project – 115 kV Circuit Breaker Upgrade Project – Capital Expenditure Authorization and Contract Award

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize capital expenditures in the amount of $3.7 million and to approve the award of a three-year contract to ABB, Inc. (‘ABB’) of Mount Pleasant, PA, in the amount of $1.8 million to furnish and deliver 13 115 kV SF6 Circuit Breakers (‘Niagara Breakers’) for the Niagara Power Project’s Switchyard (‘Switchyard’).

 

“This capital expenditure authorization is for the engineering, design and procurement phases and will also allow an early work start.  The full circuit breaker replacement program (the ‘Project’) (estimated total installed cost of $14.2 million) will be presented for the Trustees’ approval after construction bids are received and evaluated in the first quarter of 2010.

 

BACKGROUND

 

“In accordance with the Authority’s Expenditure Authorization Procedures, the award of equipment contracts in excess of $3 million and contracts exceeding a one-year term requires Trustee approval.

 

“The retirement of the NRG Energy Company 760 MW Huntley generating station in Western New York has necessitated network improvements to National Grid’s (‘Grid’) local transmission system, along with the construction of a new substation, Paradise Lane.  Thirteen 115 kV Oil Circuit Breakers in the Switchyard are being overdutied by Grid’s upgrades and therefore require replacement.  In an effort to support Grid’s schedule for completion of its work, the Authority is procuring the Niagara Breakers on an expedited basis.

 

DISCUSSION

 

“In May 2009, the President and Chief Executive Officer authorized preliminary Project funding in the amount of $490,000 to begin engineering and design services in order to finalize the scope and cost estimate and support Grid’s schedule, as required.

 

“In accordance with the Authority’s agreement with Grid, installation of the Project will begin in June 2010 and be completed by December 31, 2011.  Approval of the multiyear Niagara Breakers procurement contract and initial capital expenditure authorization is essential to maintaining this schedule.

 

“As a result of the October 2009 Trustee meeting cancelation and in accordance with the Authority’s Expenditure Authorization Procedures, which address the issue of time constraints requiring immediate commencement of services to be performed for a period of more than one year, the President and Chief Executive Officer authorized interim approval of a three-year $1.8 million contract, with expenditures not to exceed $250,000 until the Trustees’ approval is obtained, with ABB for the Niagara Breakers. 

               

This capital expenditure authorization comprises the following:

 

Detailed Engineering and Design

$1,213,300

Niagara Breaker Procurement         

$1,839,100

Authority Indirect and Direct Expenses         

$   681,800

TOTAL

$3,734,200

 

Niagara Breaker Procurement Contract

 

“Procurement of the Niagara Breakers at this time is necessary to meet the Authority’s commitment to complete the Project by the end of 2011 to support Grid’s March 2012 estimated completion date of its system reliability improvements to the local supply network in Western New York. 

 

“The Authority issued an advertisement for procurement of the Niagara Breakers in the New York Contract Reporter and bid packages were available as of April 20, 2009.  The bid documents were downloaded by 28 parties and 6 potential bidders participated in a site visit on May 6, 2009.

 

“The following proposals were received on June 8, 2009:

 

                Bidder                                                                   Location                                               Lump Sum

 

                ABB, Inc.                                                              Mount Pleasant, PA                            $1,191,497

 

                Mitsubishi Electric Power                                   Warrendale, PA                                    $1,266,092

 

Areva T&D, Inc.                                                  Charleroi, PA                                        $1,272,281

 

HICO America Sales & Tech., Inc.                  Pittsburgh, PA                                       $1,329,575

 

                National Electrical Systems, Inc.                      Boonville, NY                                       $1,432,507

 

                HVB Power Systems, Inc.                                  Suwanee, GA                                        $2,988,720

               

“The proposals were reviewed by an evaluation committee comprising staff from Engineering, Niagara, Procurement and Project Management.

 

                “ABB’s bid was the lowest in price and was technically acceptable.  ABB has performed successfully on previous Authority projects, has demonstrated knowledge of the scope of work and is capable of completing the Project within the Authority’s schedule.

 

“ABB will furnish and deliver the Niagara Breakers and provide Niagara staff with equipment training, technical assistance during installation and start-up and functional testing support.

 

“The evaluation committee recommends including $300,000 for supplemental communications and power distribution equipment and $260,000 for additional field engineering and training in the award to ABB, for a total of $560,000 above the bid amount.

 

“Funding in the amount of $760,000 has been included in the 2009 Capital Budget.  Expenditures for subsequent years will be budgeted in those years.

 

FISCAL INFORMATION

 

“Payment associated with this project will be made from the Authority’s Capital Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Senior Vice President – Transmission, the Vice President – Procurement, the Vice President – Engineering, the Regional Manager – Western New York and the Project Manager recommend that the Trustees authorize capital expenditures in the amount of $3.7 million and approve the award of a contract to ABB, Inc. of Mount Pleasant, PA in the amount of $1.8 million to furnish and deliver circuit breakers for the Niagara Power Project’s Switchyard.

 

“The Chief Operating Officer, the Executive Vice President and General Counsel, the Executive Vice President and Chief Engineer – Power Supply and I concur in the recommendation.” 

 

                Mr. John Canale presented the highlights of staff’s recommendations to the Trustees. In response to a question from Chairman Townsend, Vice Chairman Foster said that he thought the details on the competitive bids for this project were presented clearly.  Chairman Townsend noted that the one bid responder from New York State had a bid that was $200,000 higher than the lowest bid.  Trustee Nicandri asked if the costs of doing business in New York State could be factored in when evaluating competitive bids such as this one.  Mr. Thomas Antenucci said that this would be very difficult to do.  President Kessel pointed out that the Requests for Proposals for the Authority’s large renewable efforts give higher scores to companies using New York State labor and components manufactured in New York State.

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That in accordance with the Authority’s Expenditure Authorization Procedures, capital expenditures in the amount of $3.7 million and a three-year contract award to ABB, Inc. of Mount Pleasant, PA in the amount of $1.8 million to furnish and deliver 13 115kV SF6 Circuit Breakers for the Niagara Power Project’s Switchyard are approved; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.


 

7.                   2010 Operating Plan – Operation and Maintenance, Capital, Energy Services and Fuel Budgets  

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

                “Presented herein is the proposed 2010 Operating Plan for the Power Authority.  The Operating Plan consists of the Operating Forecast, which sets forth the expected revenues and expenses of the Authority, and which reflects the recommended 2010 Budgets for Operation and Maintenance (‘O&M’), Capital/Energy Services and Fuel Purchases.  The Trustees are specifically requested to approve the 2010 Budgets as follows:

 

                                                                                                                2010 Budget

                                                                                                                 ($ million)

                                                O&M                                                         $ 312.3              

                                                Capital                                                      $ 196.6

                                                Energy Services                                       $ 130.3

Fuel                                                           $ 344.0

BACKGROUND

 

                “The Authority is committed to providing reliable, affordable and clean energy consistent with our dedication to safety, while promoting the development of energy-efficient technologies, for the benefit of the State of New York.  The 2010 budgets are intended to provide the Authority’s operating facilities and support organizations with the resources needed to meet this overall mission and all its strategic objectives.

DISCUSSION

 

Operating Forecast

 

                “The 2010 Operating Forecast sets forth the expected revenues and expenses of the Authority on a Project/Market Area basis and serves as the basis for the Authority’s financial reporting during the year.  (See attached Exhibit ‘7-A.’)  Expected revenues received from customers are based on contracts and tariffs previously approved by the Trustees.  Market-based sales of any surplus energy from the Authority’s generating facilities or purchases made on behalf of customers (except for those made through previously approved purchased power agreements) are assumed to be transacted at the market clearing price in the wholesale market. Projected expenses for O&M and fuel are detailed below and summarized in Exhibit ‘7-B.’  The Other Expenses category largely reflects various accruals (e.g., Other Post-Employment Benefit prior service obligations) and other miscellaneous expenses for which the Trustees’ approval will be sought on a case-by-case basis (e.g., Power for Jobs Rebates, North Country Power Discount Program, etc.).  Also reflected in the 2010 Operating Forecast is the anticipated March 2010 contribution to the State agreed to last year pursuant to the February 2009 Memorandum of Understanding between the Authority and New York State.  Such contribution will only be made upon reaffirmation (not requested at this time) by the Trustees that the contribution remains feasible and advisable at the time of its payment.

 

O&M Budget

 

                “The O&M budget of $312.3 million represents an increase of $7.7 million, or 2.5%, from the 2009 budget.

“Payroll costs, which include salaries, overtime and fringe benefits, account for $176.6 million, or approximately 57%, of the budget.  This represents an increase of $11.2 million from the 2009 budget of $165.4 million.  Factors contributing to the payroll increase include bargaining unit increases, new positions added in 2009 and requested for 2010 (64 positions in total, 56 in 2010), decreased labor charged to capital projects and increased benefits costs mostly associated with greater pension contributions.  Non-payroll expenses for 2010, $135.7 million, reflect a decrease of $3.4 million from 2009.  A reduction in R&D and contract expenses more than offset an increase in non-recurring projects. 

 

                “Power Supply’s 2010 budget is $3.6 million (1.7%) above the 2009 level primarily due to salary/benefit increases, greater non-recurring projects, material and services escalation and a shift of labor from capital to recurring maintenance.  These increased costs are moderated by reductions, including a reduction associated with the Poletti plant closing.  During 2010, the outage budget of $9.6 million includes $7.1 million for Combustion Turbine Inspections at the 500 MW plant, $1.9 million for Small Clean Power Plant outages and $0.7 million for an inspection outage at Flynn.  Major non-recurring projects include the St. Lawrence Power Dam Foundation Drain Inspection and Grouting ($3.6 million), the E-Bay Brick Facade Repairs at St. Lawrence ($2.1 million), the Tainter Gates Painting, Seal and Grout Repairs at Blenheim-Gilboa ($1.3 million) and the 765KV Insulator Replacement ($1.0 million). 

 

“Headquarters support departments are $4.9 million (5.8%) above the 2009 level, due primarily to staffing increases, increased fringe benefits, new technical system support, a new funding request for Business Customer Energy Efficiency Audits, a decrease in rental income from 501 7th Avenue and repairs to the White Plains Office Building exterior.

 

 “The Research & Development budget of $7.6 million is $0.8 million below 2009.

 

Fuel

 

“The Fuel budget of $344.0 million is a decrease of $164.7 million (32.4%) from 2009, reflecting the planned shut-down of the Poletti plant after January 31, 2010.  This is a cash budget reflecting planned fossil-fuel purchases in 2010 for Poletti, Flynn, the Small Clean Power Plants and the 500 MW plant, and includes the costs associated with the Regional Greenhouse Gas Initiative (‘RGGI’).  The budget assumes lower commodity prices with increased generation at the 500 MW plant (6.5%), reduced generation at the Small Clean Power Plants (13.5%) and Flynn generation approximately the same as 2009.  The RGGI requires the Authority to buy emission credits for its fossil-fuel plants.  The 2010 RGGI budget of $6.3 million is based on historical emission rates and forecasted consumption of natural gas and oil.

 

Capital

 

“The 2010 Capital budget totals $196.6 million, an increase of $12.1 million (6.6%) from 2009.  This increase is attributed to the new Transmission Initiative Project ($9.7 million) and additional funding for improvements to existing facilities ($2.4 million).

 

“Other significant capital projects include Blenheim-Gilboa LEM ($19 million), St. Lawrence LEM ($24.6 million), Niagara/STL Relicensing Implementation ($19.5 million), Niagara Warehouse ($13.7 million) and the Ice Boom Relocation ($10.3 million).

 

“The capital budget includes $17.6 million of minor additions and general plant purchases that will be authorized by approval of this budget.

 

Energy Services

 

“The Energy Conservation/Renewable projects account for $130.3 million, $9.7 million above the 2009 budget.  The budget includes increased funding for energy efficiency projects for Authority customers and other eligible entities as the Authority strives to support the Governor’s 45x15 plan, which calls for New York State to meet 45 percent of its electricity needs through improved energy efficiency and clean, renewable energy by 2015.

 

FISCAL INFORMATION

 

“Payment of Operation and Maintenance and Fuel expenses will be made from the Operating Fund.  Payment will be made from the Capital Fund or Energy Conservation Effectuation Fund for Capital and Energy Services expenditures.  The Operating Forecast shows adequate earnings levels so that the Authority may maintain its financial goals for cash flow and reserve requirements.

 

RECOMMENDATION

 

                “The Executive Vice President and Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance and the Vice President and Controller recommend approval of the 2010 Operation and Maintenance, Fuel, Capital and Energy Services budgets as discussed herein.

 

            “The Executive Vice President and General Counsel, the Senior Vice President – Enterprise Shared Services, the Executive Vice President and Chief Engineer – Power Supply, the Chief Operating Officer and I concur with the recommendation.”

 

                President Kessel said that development of this year’s budget involved the Trustees at an earlier stage in order to produce a better result.  He commended Mr. Joseph Del Sindaco, Mr. Donald Russak, Mr. Robert Hopkins and his team, Ms. Francine Evans and Mr. Arnold Bellis for their efforts.  President Kessel said that the budget for 2010 was 2.5% higher than that for 2009.  Mr. Donald Russak presented the highlights of staff’s recommendations to the Trustees, saying that Mr. Hopkins and Ms. Lisa Cole were available to answer questions via teleconference.  In response to a question from Trustee Nicandri, Mr. Russak said that in the event of a terrorist attack, each of the Authority’s market areas would be able to stand on its own.  Vice Chairman Foster said that the budget process had been well done this year. 

                The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the 2010 budgets for Operation and Maintenance, Fuel, Capital and Energy Services expenditures, as discussed in the foregoing report of the President and Chief Executive Officer, are hereby approved; and be it further

 

RESOLVED, That up to $146.5 million of monies in the Operating Fund are hereby authorized to be withdrawn from such Fund and deposited in the Capital Fund, provided that at the time of withdrawal of such amount or portions of such amount, the monies withdrawn are not then needed for any of the purposes specified in Subsections (1)(a)-(c) of Section 503 of the General Resolution Authorizing Revenue Obligations adopted on February 24, 1998, with the satisfaction of such condition being evidenced by a certificate of the Treasurer or the Deputy Treasurer; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.


 

 


 

Page 1 of 3

O&M AND FUEL

2010 BUDGET

($ MILLIONS)

 

 

 

 

 

 

%

DEPARTMENT

 

2009

 

2010

 

CHANGE

 

 

 

 

 

 

 

     EXECUTIVE OFFICES

 

17.7

 

18.7

 

5.8%

     BUSINESS SERVICES

 

20.8

 

20.9

 

0.7%

    CHIEF ADMINISTRATION

 

35.1

 

37.5

 

6.8%

    ENERGY MARKETING AND BUSINESS DEV.

        

12.3

 

13.6

 

10.9%

 

 

 

 

 

 

 

POWER SUPPLY

 

 

 

 

 

 

     OPERATIONS SHARED SERVICES - HQ

 

22.6

 

26.7

 

18.0%

     CLARK ENERGY CENTER

 

13.2

 

14.0

 

5.8%

     TRANSMISSION FACILITIES

 

29.1

 

32.4

 

11.5%

     BLENHEIM - GILBOA

 

14.9

 

17.2

 

15.8%

     POLETTI - SENY

 

17.5

 

6.5

 

-62.6%

     NIAGARA

 

39.4

 

44.5

 

13.0%

     ST. LAWRENCE

 

22.2

 

25.9

 

16.6%

     R.M. FLYNN

 

7.0

 

7.6

 

8.3%

     SCPP

 

19.3

 

13.4

 

-30.6%

     SMALL HYDRO

 

5.5

 

4.5

 

-19.5%

     500 MW

 

19.6

 

21.3

 

8.3%

TOTAL POWER SUPPLY

 

210.3

 

214.0

 

1.7%

 

 

 

 

 

 

 

R&D AND INSTITUTIONAL FUNDING

 

8.3

 

7.6

 

-9.2%

 

 

 

 

 

 

 

TOTAL O&M BUDGET

 

304.6

 

312.3

 

2.5%

 

 

 

 

 

 

 

FUEL

 

 

 

 

 

 

     OIL

 

21.6

 

19.2

 

-11.1%

     GAS

 

454.4

 

318.5

 

-29.9%

     REGIONAL GREENHOUSE GAS INITIATIVE

 

32.7

 

6.3

 

-80.7%

TOTAL FUEL BUDGET

 

508.7

 

344.0

 

-32.4%

 

 

 

 

 

 

 

 


 

Page 2 of 3

CAPITAL

2010 BUDGET

($ MILLIONS)

 

 

 

 

%

 

2009

2010

CHANGE

 

 

 

 

TRANSMISSION INITIATIVE

0.0

9.7

100.0%

 

 

 

 

POWER SUPPLY

 

 

 

 

 

 

 

    CLARK ENERGY CENTER & TRANSMISSION

22.3

21.2

-5.0%

    BLENHEIM-GILBOA

23.7

23.2

-2.2%

    SMALL HYDROS

0.7

2.6

290.4%

    500 MW

6.9

7.1

3.0%

    FLYNN

5.1

5.1

0.8%

    SCPP

5.5

3.2

-42.0%

    NIAGARA*

55.0

61.9

12.5%

    ST. LAWRENCE*

42.5

43.5

2.5%

 

 

 

 

 

161.7

167.8

3.8%

 

 

 

 

 

 

 

 

 

 

 

 

ADMINISTRATION SUPPORT/HEADQUARTERS

22.9

19.1

-16.3%

 

 

 

 

TOTAL CAPITAL PROJECTS

184.5

196.6

6.6%

 

 

 

 

 

* Includes Relicensing and Implementation Costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 3 of 3

ENERGY SERVICES

2010 BUDGET

($ MILLIONS)

 

 

 

 

 

 

 

%

 

 

2009

 

2010

 

 

CHANGE

 

 

 

 

 

 

 

 

ENERGY CONSERVATION

 

 

 

 

 

 

 

     LONG-TERM AGREEMENTS

 

65.5

 

83.3

 

 

 

     OTHER NYPA FUNDED PROGRAMS

 

47.5

 

41.2

 

 

 

     PETROLEUM OVERCHARGE RESTITUTION PROGRAMS

 

3.1

 

2.5

 

 

 

     LOWER MANHATTAN ENERGY INITIATIVE

 

4.4

 

3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ENERGY SERVICES BUDGET

 

120.6

 

130.3

 

 

8.0%

 

 


 

8.                   Approved Budget and Four-Year Financial Plan Information Pursuant to Regulations of the Office of the State Comptroller

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“In accordance with regulations of the Office of the State Comptroller (‘OSC’), the Trustees are requested to approve a 2010 Annual Budget and Four-Year Financial Plan and authorize: (i) making the approved budget and four-year financial plan available for public inspection at not less than five convenient public places throughout New York State, (ii) submitting the approved budget and four-year financial plan to OSC and (iii) posting the approved budget and four-year financial plan on the Authority’s website.

 

BACKGROUND

 

                            “OSC implemented regulations in March 2006 addressing the preparation of annual budgets and four-year financial plans by ‘covered’ public authorities, including the Authority.  (See 2 NYCRR Part 203 (‘Part 203’)).  These regulations establish various procedural and substantive requirements, discussed below, relating to the budgets and financial plans of public authorities.

 

DISCUSSION

 

“Part 203 sets forth specific requirements in connection with submitting, formatting, preparing supporting documentation for and monitoring annual budgets and financial plans of public authorities.  On September 29, 2009, the Trustees approved for public release the Authority’s proposed 2010 Budget and Four-Year Financial Plan pursuant to Part 203.  In a companion item, the Trustees were presented for approval today the 2010 Operating Plan of the Power Authority, including 2010 budgets for operation and maintenance expenses, capital expenditures, fuel purchases and energy services expenditures.  The 2010 Operating Plan represents the first year of the 2010 Budget and Four-Year Plan.

 

“Under Part 203, the Trustees are required to adopt an approved 2010 Budget and Four-Year Financial Plan (attached as Exhibit ‘8-A’).  The approved 2010 Budget and Four-Year Financial Plan must be available for public inspection not less than seven days before the commencement of the next fiscal year and the availability for public inspection must be for a period of not less than 45 days and in not less than five convenient public places throughout the State.  The approved budget and four-year plan must be submitted to OSC, via electronic filing through the Public Authorities Reporting Information System maintained by OSC and the Authority Budget Office, within seven days of approval by the Trustees.  The regulations also require the Authority to post the proposed Budget and Four-Year Financial Plan on its website.

 

“Under Part 203, each approved Budget and Four-Year Financial Plan must be shown on both an accrual and cash basis and be prepared in accordance with generally accepted accounting principles; be based on reasonable assumptions and methods of estimation; be organized in a manner consistent with the public authority’s programmatic and functional activities; include detailed estimates of projected operating revenues and sources of funding; contain detailed estimates of personal service expenses related to employees and outside contractors; list detailed estimates of non-personal service operating expenses and include estimates of projected debt service and capital project expenditures. 

               

“Other key elements that must be incorporated in each approved Budget and Four-Year Financial Plan are a description of the budget process and the principal assumptions, as well as a self-assessment of risks to the Budget and Financial Plan.  Additionally, the approved Budget and Financial Plan must include a certification (Exhibit ‘8-B’) by the chief operating officer (defined as the executive officer responsible for overseeing the day-to-day activities of an authority) that, to the best of his or her knowledge and belief after reasonable inquiry, the proposed Budget and Financial Plan are based on reasonable assumptions and methods of estimation and that the Part 203 regulations have been satisfied.

 

“Finally, as indicated in the proposed Budget and Four-Year Financial Plan, the approved Budget and Four-Year Financial Plan uses updated estimates of generation, fuel prices, electric prices, operation and maintenance expenses, capital costs and other revenue and expense items. The approved Budget and Four-Year Financial Plan includes a section discussing the differences between the proposed and approved Budget and Four-Year Financial Plan. 

 

FISCAL INFORMATION

 

                “There is no anticipated fiscal impact.

 

RECOMMENDATION

 

“The Director – Financial Planning recommends that the Trustees approve the 2010 Annual Budget and Four-Year Financial Plan and authorize (i) making the approved Budget and Four-Year Financial Plan available for public inspection at no less than five convenient public locations throughout New York State, (ii) submitting the approved Budget and Four-Year Financial Plan to the Office of the State Comptroller in the prescribed format and (iii) posting the approved Budget and Four-Year Financial Plan on the Authority’s website.

 

                “The Chief Operating Office, the Executive Vice President and General Counsel, the Executive Vice President and Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance and I concur in this recommendation.”

 

Mr. Donald Russak presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Vice Chairman Foster, Mr. Russak said that the projected decline in net income in 2011 was based on the Astoria Energy plant coming on line, which in turn would drive unforced capacity (“UCAP”) prices down.  He said that the capitalized lease in Astoria would spike up in 2011 and that the bigger jump from 2010 to 2012 was due to amortization.  Responding to a question from Trustee Nicandri, Mr. Russak said that the Trustees will be requested to approve the payment to the State Treasury that is planned for March 2010. 

                The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That pursuant to 2 NYCRR Part 203, the attached 2010 Annual Budget and Four-Year Financial Plan, including its certification by the Chief Operating Officer, is approved in accordance with the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That pursuant to 2 NYCRR Part 203, the Corporate Secretary be, and hereby is, authorized to make the approved Budget and Four-Year Financial Plan available for public inspection at not less than five convenient public places throughout New York State, submit the approved Budget and Four-Year Financial Plan to the Office of the State Comptroller in the prescribed format and post the approved Budget and Four-Year Financial Plan on the Authority’s website; and be it further    

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 

 

9.                   Other Business – Introduction of Rocco Iannarelli

President Kessel introduced the Authority’s new Vice President of Human Resources, Rocco Iannarelli, saying that he had been talking to the Trustees about this appointment for a number of months.  He said that Mr. Iannarelli would have a challenging job, working closely with the Trustees, the unions and management at the Authority.  In response to a question from Trustee Nicandri, President Kessel said that Mr. Iannarelli’s appointment did not require ratification by the Governance Committee.  President Kessel said that going forward it made sense to take another look at what positions are subject to Governance Committee or the full board’s approval.  He asked Ms. Brown to work on this with Trustee Nicandri and Ms. Karen Delince.  Trustee Nicandri said that he thought it was important for people in senior positions to know they have the support of the Trustees. 


 

10.                Resolution – Arnold M. Bellis

 

                President Kessel said that Mr. Bellis is retiring from the Authority after 30 years and asked that the Trustees pass a resolution in his honor.  Trustee Nicandri expressed the Trustees’ appreciation to Mr. Bellis for all of his hard work on behalf of the Authority. 

 

WHEREAS, Arnold M. Bellis’ diverse and distinguished career of three decades at the New York Power Authority has been marked by an unfailing blend of honesty, integrity and candor that has earned him longstanding recognition as the Financial Conscience of the Power Authority; and

 

WHEREAS, a succession of Trustee, senior staff and budget meetings, along with innumerable less formal encounters, have been enhanced and enlivened by Mr. Bellis’ probing and skeptical questions, his acerbic rejoinders, his irreverent insights and his unflinching insistence that decisions be based on a thorough analysis of the facts;  and

               

WHEREAS, as Vice President-Controller since 1994, Mr. Bellis has vigorously safeguarded the Authority’s financial health and defended its general interests in roles as varied as working assiduously to restrain expenditures, spearheading installation of sophisticated data and control systems or fighting to ensure that NYPA received fair value for the sale of its nuclear power plants; and

 

WHEREAS, he had previously helped to pave the way for that landmark transaction when the Authority, recognizing his unique capabilities, turned to him for a special assignment—which he superbly completed—as head of nuclear business functions at a critical point in the plants’ histories; and

 

WHEREAS, Mr. Bellis’ deep understanding of the electric utility business and the Authority’s operations were honed through his early service in NYPA’s planning and marketing group; his leadership of its corporate planning, information technology and records management units; and his initial promotion to Vice President in 1988, with responsibility first for budgets and then as the Controller for Authority projects; and

 

WHEREAS, in addition to his own considerable accomplishments, Mr. Bellis, as a demanding but discerning manager, has been a highly respected mentor to numerous NYPA employees, several of whom now serve as senior executives in the organization; and

 

WHEREAS, his customary outspoken, no-nonsense approach to business has been tempered by a dry sense of humor, his love of golf and his predilection for crossword puzzles, big words and cigars and pipes (lit and unlit); and

 

WHEREAS, with the precision worthy of a consummate Controller, Mr. Bellis plans to retire from the Power Authority on January 14, 2010, exactly 30 years to the day of his hiring at NYPA;

 

NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power Authority of the State of New York convey their profound thanks and appreciation to Arnie Bellis for his dedicated and invaluable service to the Authority and for the personal and professional standards he has set, and that they wish him; his wife, Dinah; and their family many years of health, happiness and fulfillment.

 

December 15, 2009

 

 

11.                Motion to Conduct an Executive Session

               

                “Mr. Chairman, I move that the Authority conduct an executive session pursuant to Section 105(1)(f) of the Public Officers Law of the State of New York to discuss matters including the appointment, employment, promotion, discipline, suspension, dismissal or removal of a particular person or corporation.”   Upon motion made and seconded, an Executive Session was held.


 

12.                Motion to Resume Meeting in Open Session

“Mr. Chairman, I move to resume the meeting in Open Session.”  Upon motion made and seconded, the meeting resumed in Open Session.


 

13.            Election of Executive Vice President and Chief Financial Officer

The Chairman submitted the following report:

 

SUMMARY

“The Trustees are requested to consider the election of Elizabeth McCarthy of Jericho, New York as Executive Vice President and Chief Financial Officer of the Authority.

BACKGROUND AND DISCUSSION

“Article IV, Section 2 of the Authority’s By-laws provides for the election of certain non-statutory officers by the Trustees.  Section 3 of the same Article provides that such non-statutory officers shall hold office for a term expiring at the Trustees’ next Annual Meeting, or until their successors are elected. 

RECOMMENDATION

“It is recommended that, pursuant to Article IV of the By-Laws, adopted December 18, 1984, and last amended on February 24, 2009, Elizabeth McCarthy be elected as Executive Vice President and Chief Financial Officer, effective January 4, 2010, to hold such office for a term expiring at the next annual meeting of the Trustees in March 2010, or until her successor is elected.”

                President Kessel asked the Trustees to consider electing Ms. Elizabeth McCarthy as the Authority’s new Executive Vice President and Chief Financial Officer.

                The following resolution, as submitted by the Chairman, was unanimously adopted.

 

RESOLVED, That pursuant to Article IV, Section 2 of the Authority’s By-Laws, Elizabeth McCarthy is hereby elected as Executive Vice President and Chief Executive Officer at a salary of $234,900, effective January 4, 2010, for a term expiring at the next annual meeting of the Trustees in March 2010, or until her successor is elected.          

 

 

14.            Amendments to the Authority’s By-laws  

 

The President and Chief Executive Officer submitted the following report:

 

“The Trustees are requested to amend the Authority’s By-laws to effect certain organizational changes, principally the responsibilities of certain Authority officers.  The significant proposed changes are as follows:

 

(1)     Article IV, Sections 6.C, 6.C and 6.F have been modified to reflect more accurately the responsibilities of both the President and Chief Executive Officer, the Chief Operating Officer and the Executive Vice President and General Counsel.

 

(2)     Article IV, Section 6.N has been deleted to reflect the elimination of the position of Inspector General, with a corresponding deletion of the reference to such office in Article IV, Section 2.

 

                 “A redlined version of the amended By-laws with strikethroughs denoting deletions and underlining reflecting new language is attached as Exhibit ‘14-A.’

 

                “The Chief Operating Officer, the Executive Vice President and General Counsel and I recommend that the Trustees approve the proposed By-laws amendments.”

 

                Ms. Brown presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Trustee Nicandri, Ms. Brown said that elimination of the Office of the Inspector General conforms with the requirements of State law.

                The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the revisions to the By-laws (originally adopted on April 9, 1954, and last amended on February 24, 2009) discussed in the foregoing report of the President and Chief Executive Officer and attached hereto as Exhibit “14-A,” be hereby adopted; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


 

15.            Use of Net Revenues Produced by Sale of Expansion Power as Industrial Incentive Awards

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to: (1) approve a revised Economic Development Plan that will provide for the use of net revenues from the sale of Expansion Power (calendar years 2010-2029) for economic development assistance to support the Canal Side Development Project described below; (2) approve an Industrial Incentive Award (‘IIA’) to the Erie Canal Harbor Development Corporation (‘ECHDC’) in the amount of $3.7 million per year for 20 years to enable ECHDC to secure the necessary funding for the Canal Side Development Project and (3) authorize Authority staff to take all actions necessary to modify the Authority’s current payment stream under the Niagara Relicensing Settlement Agreement (‘Settlement Agreement’) to an equivalent (in present-value terms) payment stream of $4.7 million per year over a period of 20 years to provide additional support necessary for the Canal Side Development Project funding. 

 

BACKGROUND

 

ECHDC, a subsidiary of the Empire State Development Corporation/Urban Development Corporation (‘ESDC’), was created in 2005 to develop the City of Buffalo’s harbor waterfront.  It is sponsoring a major economic development project known as the Canal Side Development Project (‘Canal Project’). 

 

The Canal Project has been described as a ‘public/private investment consisting of 1,075,000 square feet of retail, cultural, residential, and office space on 23 development parcels within approximately 20 acres of land in downtown Buffalo.’  The Canal Project is intended to revitalize Buffalo’s inner harbor, and restore the area’s waterfront vitality through a combination of residential, commercial, open space and cultural elements.  According to ECHDC, when fully complete, the Canal Project has the potential to generate approximately 1,000 new jobs, almost $9.5 million in annual sales-tax revenues and $1.2 million in new yearly property taxes for the City of Buffalo.  ECHDC states that over the course of 20 years, the Canal Project will generate approximately $189 million in sales tax revenue.

 

Authority staff has been in discussions with ECHDC to explore additional sources of financial support for the Canal Project. Staff has identified two possible sources of financial support for the Canal Project: (1) a modification of the Authority’s payment schedule under the Settlement Agreement; and (2) an IIA from net revenues from the sale of Expansion Power.

 

Under the present terms of the Settlement Agreement, the Authority is providing ECHDC with $3.5 million per year for the 50-year term of the Niagara Project license to support economic development and revitalization within the vicinity of the Buffalo waterfront.  To date, two of the payments have been made, leaving 48 annual payments remaining, representing a present value of approximately $56 million. 

 

Regarding IIAs, under Public Authorities Law (‘PAL’) §1005 (eighth unnumbered paragraph) and Economic Development Law §188, the Authority is directed, no less than annually, to identify net revenues and submit, for Economic Development Power Allocation Board (‘EDPAB’) approval, an Economic Development Plan (‘Plan’) for the use of such revenues as IIAs.   Net revenues are defined by PAL §1005 as any excess of revenues properly allocated to sales of Expansion Power over the costs and expenses properly allocated to such sales. 

 

At its meeting of May 18, 2009, EDPAB approved a modified Plan.  Under this modified Plan, IIAs were made available to companies in New York State that are at identifiable risk of closure or relocation to another state.  EDPAB also extended the Plan until 2010 and approved IIAs to three companies for up to three years.  The annual amount of these three awards was $3.9 million.  At its meeting of October 26, 2009, EDPAB extended the Plan to cover the period 2010 through 2016.  At the same meeting, EDPAB approved a provisional IIA to Computer Associates for the period May 2010 through May 2016 and an extension of Computer Associates’ Economic Development Power allocation to December 31, 2016. 

DISCUSSION

 

ESDC has pledged monies to finance the planned Canal Project, which is estimated to cost approximately $300 million.  ECHDC needs an additional $105 million (present-value amount) to support the Canal Project.  According to ECHDC, the $105 million need may be met by securing a payment stream of $8.4 million annually over 20 years.  By securitizing (i.e., borrowing against) this payment stream, ECHDC has indicated that it can obtain the remaining $105 million in funding necessary for the Canal Project.

 

Authority staff has been in discussions with ECHDC to explore additional sources of financial support for the Canal Project.  The Authority can provide the required $8.4 million payment stream to enable ECHDC to satisfy its stated funding need.  The payment stream would consist of the following two components.

 

The first component would derive from a revision to the Authority’s scheduled payments to ECHDC provided under its Settlement Agreement.  In summary, the Authority would convert the $3.5 million payment stream for the remaining 48 years to an equivalent (in present-value terms) payment stream of $4.7 million per year over a period of 20 years. 

 

The second component would consist of an IIA to ECHDC in the amount of $3.7 million per year for 20 years (2010-2029) from Expansion Power net revenues pursuant to of PAL §1005 (eighth unnumbered paragraph).  This provision authorizes the Authority to make available net revenues earned from the sale of Expansion Power for ‘industrial incentive awards … in conformance with an economic development plan covering all such net revenues.’  As discussed above, this component would require an amendment to the current Economic Development Plan to extend the term of the Plan and authorize the use of net revenues for the award to ECHDC. This amendment would add to the list of permissible uses of IIAs previously approved by EDPAB and the Authority.

 

EDPAB will be asked to consider the proposed amendment to the Economic Development Plan, as well as the IIA to ECHDC, at its next meeting. 

 

FISCAL INFORMATION

 

                Expansion Power net revenues, which are used to support the IIA Program, typically range between $7 and $10 million per year.  Thus, this award would assign roughly one-third to one-half of the annual amounts to this purpose.  Since the conversion of the Settlement Agreement’s payment stream to a 20-year payment period rather than the current 48 remaining payments will not change the value of the Agreement in present-value terms, it will not have a significant impact on the Authority’s finances.

 

RECOMMENDATION

 

It is recommended that the Trustees approve the amendment to the Economic Development Plan for Industrial Incentive Awards to provide for the use of net revenues from the sale of Expansion Power (calendar years 2010-2029) for economic development assistance to support the Canal Side Development Project as discussed above. 

 

It is also recommended that the Trustees approve an Industrial Incentive Award to the Erie County Harbor Development Corporation in the amount of $3.7 million per year for 20 years (2010-2029).  The Industrial Incentive Award would be provided for the sole purpose of enabling the Erie County Harbor Development Corporation to secure the necessary funding for the Canal Side Development Project, and annual payment of the Industrial Incentive Award would be contingent upon satisfaction of such conditions and execution of such documents as the Executive Vice President and General Counsel may require to ensure that such funds are used for the stated purpose of supporting the Canal Side Development Project.

 

It is also recommended that the Trustees authorize a conversion of the Authority’s payment schedule under the Niagara Project Relicensing Settlement Agreement to an equivalent (in present-value terms) payment stream of $4.7 million per year over a period of 20 years.”

 

 

President Kessel presented the highlights of staff’s recommendations to the Trustees.  He thanked Ms. Brown and Mr. Russak and the team of people who worked with them to make this project happen.  He also thanked Mr. Del Sindaco for bringing up securitization of the project as a possibility.  President Kessel asked Ms. Brown and Trustee Curley to do all the work needed to implement the project as quickly as possible, noting that it is also subject to EDPAB ratification.  He commended Governor Paterson and his staff and the Authority’s Trustees for their vision with respect to the project.  Trustee Curley said he was delighted to move that the resolution be adopted, saying that in doing so the Trustees would be giving their “conceptual approval” of the project and that the Authority was not bound completely by this vote, since the approval of EDPAB and the Empire State Development Corporation was also required.  Chairman Townsend said that Trustee Elise Cusack had asked to have the following statement entered into the record, since she could not be at today’s meeting:

Although I’m not able to attend today’s meeting due to the funeral of a very close family friend, I wanted to be sure to have my comments on record regarding our vote today on the acceleration of investment in the Buffalo waterfront.  As a proud Western New Yorker, I can personally tell you how long we as a community have anxiously awaited this incredible boost to our ongoing economic development efforts.  It is beyond excitement and amazement to me that my young children will only know Buffalo and Western New York as a destination defined by a vibrant waterfront.  And I will be forever proud to let them know that as a Trustee of the New York Power Authority I had a small part in making our community’s long-anticipated dreams a reality.  I thank our President Richie Kessel and Governor David Paterson and the countless others who worked tirelessly to make this project happen and wholeheartedly support the Authority’s continued commitment to economic development efforts, not only in Western New York but across our great State.  Thank you.

 

                Vice Chairman Foster said that he disagreed with President Kessel about this project and that this represents a significant reallocation of monies and a very fast timetable.  He also said that he thought it was very bad to have the Trustees approving the project after the public announcement.  He stated that he feels this project is not consistent with the Authority’s mission or the additional fiduciary responsibilities imposed on the Trustees by the recent amendments to the Public Authorities Law.  He said that the Authority is responsible to all New Yorkers and that he was extremely frustrated by the way this project was handled.  Vice Chairman Foster said that he would very, very reluctantly agree to vote on this, but that he wanted his comments to go on the record.

                Chairman Townsend said that the Authority had always been engaged in economic development and that he feels this project is consistent with the Authority’s overall mission. 

                Trustee Nicandri seconded the motion, pointing out that the Authority is only able to do business thanks to the forbearance of its facilities’ host communities.  He said that people on the St. Lawrence and Niagara Rivers are concerned about their inability to use waterfront property that has long been under the control of the Authority.  He ended by stating that the Trustees can respectfully disagree with each other but united to vote for this project. 

The following resolution, as submitted by the President and Chief Executive Officer, was unanimously adopted.

 

RESOLVED, That the Authority hereby approves an amendment to the current Economic Development Plan to provide for the use of an Industrial Incentive Award in support the Canal Side Development Project on the terms and conditions and for the purposes set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Authority hereby approves an Industrial Incentive Award to the Erie Canal Harbor Development Corporation in the amount of $3.7 million per year for 20 years (2010-2029) in support of the Canal Side Development Project on the terms and conditions and for the purposes set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Authority hereby authorizes a modification of the Authority’s payment schedule under the Niagara Relicensing Settlement Agreement to an equivalent (in present-value terms) payment stream of $4.7 million per year over a period of 20 years for the purpose of facilitating additional financial support for the Canal Side Development Project on the terms and conditions and for the purposes set forth in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 


 

16.          Next Meeting

 

The next Regular Meeting of the Trustees will be held on Tuesday, January 26, 2010, at 11:00 a.m. at the Clarence D. Rappleyea Building in White Plains, New York, unless otherwise designated by the Chairman with the concurrence of the Trustees.

 

 

Closing

                On motion made and seconded, the meeting was adjourned by the Chairman at approximately

3:15 p.m.

 

 

 

 

Karen Delince

Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                

 

 

 

DECEMBER MINS.09