Minutes of the Regular Meeting of the Power Authority of the State of New York held via videoconference at the Clarence D. Rappleyea Building, 123 Main Street, White Plains, New York at approximately 12:05 p.m.

The Members of the Board were present at the following videoconference locations:

Michael J. Townsend, Chairman - Rochester

D. Patrick Curley, Trustee - Buffalo

John S. Dyson, Trustee - WPO

R. Wayne LeChase, Trustee - Italy

Eugene L. Nicandri, Trustee - WPO

Mark O’Luck, Trustee - NYO

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Gil C. Quiniones President and Chief Executive Officer

Judith C. McCarthy Executive Vice President and General Counsel

Edward Welz Chief Operating Officer

Donald Russak Chief Financial Officer

Thomas Antenucci Senior Vice President – Power Supply Support Services

Thomas DeJesu Senior Vice President – Public, Governmental and Regulatory Affairs

James Pasquale Senior Vice President – Marketing and Economic Development

Joan Tursi Senior Vice President – Corporate Support Services

Paul Belnick Vice President – Energy Efficiency – Energy Services and Technology

Sobeida Cruz Vice President – Environmental Justice

Dennis Eccleston Vice President – Information Technology/Chief Information Officer

Joseph Gryzlo Vice President and Chief Ethics and Compliance Officer

Michael Huvane Vice President – Marketing – Business and Municipal Marketing

John Kahabka Vice President – Environmental, Health and Safety

Joseph Leary Vice President – Community and Government Relations

Lesly Pardo Vice President – Internal Audit

Patricia Leto Vice President – Procurement

Scott Scholten Vice President and Chief Risk Officer – Energy Risk Assessment and Control

Bradford Van Auken Vice President – Engineering

Karen Delince Corporate Secretary

Jill Anderson Director – Business Integration

Mike Lupo Director – Marketing Analysis and Administration

Michael Saltzman Director – Media Relations

Lynn Hait Regional Manager – Central New York

Timothy Muldoon Manager – Business Power Allocations and Compliance

Gary Schmid Manager – Network Services Infrastructure

Peter Prunty Network Architect – Infrastructure

Ruth Colon Senior Business Integration Project Manager

Wayne Gowen Senior Business Analyst – Application Services

Lorna M. Johnson Assistant Corporate Secretary

Tabitha Robinson BPAC Analyst I – Business Power Allocations and Compliance

Emily Alkiewicz BPAC Analyst – Business Power Allocations and Compliance

Sheila Baughman Senior Secretary – Corporate Secretary’s Office

Trish Hennessy Photographer – Video and Photographic Services

Joseph Carline Counsel – Couch White, LLP

Vice Chairman Dyson presided over the meeting. Corporate Secretary Delince kept the Minutes.

Introduction

Vice Chairman Dyson presided over the meeting and welcomed the Trustees and staff.

Certificate of Recognition – Lynn Hait

Vice Chairman Dyson made the following remarks on behalf of the Trustees:

“Today, I am truly honored to acknowledge the achievements of an extraordinary individual, Lynn Hait, who has served the Power Authority for more than 35 years. He began his career at our Blenheim-Gilboa Pumped Storage Power Project and steadily advanced there to positions of increasing responsibility and to his current position of Regional Manager for Central New York.

Lynn recently received the 2012 Public Excellence Award from the State Academy for Public Administration recognizing his career of public service to NYPA and citing the emergency response efforts of last summer.

We are exceedingly proud that Lynn was cited for this most distinguished honor and for the special recognition he has brought to himself, to the New York Power Authority and to the communities we serve.

Lynn, nothing brings me greater pleasure today than to present you with this Certificate of Recognition on behalf of everyone here at the Power Authority. Your professionalism and dedication—both to NYPA and to the people we serve—have made us all exceptionally proud of you in every way. Congratulations!”

Vice Chairman Dyson then presented the Certificate of Recognition to Mr. Lynn Hait.

Energy Highway Summit

Vice Chairman Dyson mentioned the Energy Highway Summit which he said was very successful and thanked President Quiniones for the extraordinary job he did hosting this event. He also thanked Ms. Jill Anderson
for the work she did in planning the summit.

1. Adoption of the April 24, 2012 Proposed Meeting Agenda

On motion made and seconded, the meeting Agenda was approved. At its meeting earlier today, the Economic Development Power Allocation Board (“EDPAB”) recommended that the Authority’s Trustees
approve item #6 (Power Allocations under the ReCharge New York Program); Trustee Nicandri recused himself from the vote on item #6 since he voted for its approval at the EDPAB meeting.

2. Consent Agenda:

On motion made and seconded, the Consent Agenda was approved.

a. Approval of the Minutes

The Minutes of the Annual Meeting held on March 27, 2012 were unanimously adopted.

3. Discussion Agenda:

a. Report of the President and Chief Executive Officer

Corporate Performance Measures

President Gil Quiniones provided an update of the Authority’s performance to date. He said the Authority is meeting its goals as outlined in the Corporate Performance Measures. He then highlighted some of
the key initiatives.

Diversity

President Quiniones said that the Chief Diversity Officer will be reviewing the Authority’s corporate policies and procedures to ensure that they are consistent with the Authority’s values as it pertains to diversity.

Environmental Justice

President Quiniones said that Ms. Sobeida Cruz, Vice President of Environmental Justice, and Ms. Ruth Colon will be requesting the Board’s approval of the Authority’s Environmental Justice Plan.

Sustainability

President Quiniones said that staff is updating the Authority’s Sustainability Plan and the Board will be asked to approve it early next year.

ReCharge New York

President Quiniones said that the Authority is undertaking certain initiatives with the goal of advancing Governor Cuomo’s energy and economic development policies as outlined in his 2012 state of the state address.

As part of that initiative, President Quiniones said that the Board will be requested to approve the first round of allocations for power under the ReCharge New York Power Program and Mr. James Pasquale will
present staff’s recommendation to the Board. He said that Mr. Pasquale and his team were to be commended on the remarkable job they did in launching this program.

Master Plan for Energy Efficiency in State Facilities

President Quiniones said the Governor also announced a Master Plan for improving energy efficiency in state buildings and facilities. He said that the Authority will be the lead agency in implementing this $500
million program across the state. The Authority will also be assisting the localities in energy efficiency measures to reduce their operating costs.

NY-Sun Solar Market Acceleration Program (Solar MAP)

President Quiniones said that the Authority’s role in this initiative is limited to research and development with a goal to reducing the balance of plant costs of implementing photovoltaic technologies.

New York Energy Highway

President Quiniones said that the goal of this initiative is to provide safe, reliable and affordable energy by upgrading the state’s electric power system. He said the Governor has appointed a task force to implement
this initiative which the Authority co-chairs. He highlighted some of the key activities as follows:

· April 4, 2012 – Energy Highway Summit at Columbia University

· April 11, 2012 – Request for Information (“RFI”) issued

· April 19, 2012 – RFI Responders Conference in Tarrytown, NY

· May 30, 2012 – Deadline to submit responses to RFI

· Summer 2012 – Task Force to issue an “Action Plan” to the Governor

b. Report of the Chief Operating Officer

Mr. Edward Welz provided highlights of the report to the Trustees.

Performance Measures

System-wide Net Generation exceeded projections.

Key Issues:

Plant Performance

one significant unplanned generation event – a fire occurred at Hellgate Unit 1 on March 7. Repairs are currently underway and the unit is expected to return to service on April 14.
one significant unplanned transmission event – failure of a circuit breaker at the St. Lawrence facility. This is in the process of being replaced.

St. Lawrence-FDR Power Project –Life Extension and Modernization (LEM) Program:

Unit 19 – work began on July 25, 2011. The unit returned to service on April 2, 2012.
Unit 20 – outage scheduled for April 9, 2012 with an expected return to service on December 21, 2012.
The Program completion date is scheduled for 2013.

Lewiston Pumped-Generation Plant LEM Program:

Feeder #3 outage to replace the generator step-up transformers is in progress and will be completed by April 27, 2012.
Unit 11 Performance Testing is scheduled to begin on May 1, 2012.
The first pump/turbine unit outage is scheduled to begin December 2012
The program completion is scheduled for 2020.

Niagara Power Project:

Unit 2 – work continues on the reassembly of the Unit. The Unit is expected to return to service on July 12, 2012

In response to a question from Trustee Nicandri, Mr. Welz said that the Authority has a program in place to replace all of the circuit breakers at the St. Lawrence and Niagara Plants.

Organizational Review

Mr. Welz said that President Quiniones requested an organizational review of the Operations business unit; a consultant was engaged to conduct this review as it relates to succession planning and imminent
retirement of senior staff. He said President Quiniones has accepted the recommendations and they are in the process of being implemented. Mr. Welz said the Authority is also in the process of awarding a contract to a
vendor to provide GAP Analysis training for the Operations management and union staffs.

c. Report of the Chief Financial Officer

Mr. Donald Russak provided highlights of the report to the Trustees.

Net Income

Net income through March was $73 million, prior to the recognition of the $60 million voluntary contribution to New York State. This is $9.4 million higher than budget due largely to early year timing differences on
expenditures and lower interest costs due to lower rates.

Margins on market-based sales were on budget as the positive impact of higher net generation, due to the early spring run-off, was offset by lower energy prices.

Year-End Projections

Developing trends during the first quarter indicate year-end net income for 2012 is expected to under-run by about $10 million relative to the $167 million budget. These trends include Energy Prices, Capacity Prices
and Hydro Flows.

At currently projected levels, business requirements for cash flow (debt service coverage) and liquidity are expected to be on target for 2012.

In response to a question from Trustee Foster, Mr. Russak said that while precipitation has been near normal during the winter, because of the relatively warm temperatures and little snow-pack around the Great
Lakes, this resulted in an early spring run-off with the water flowing through the turbines earlier than usual. As a result, net generation at the Niagara and St. Lawrence hydroelectric facilities has been running above
forecast for the first quarter but is expected to revert to near budgeted levels by year-end.

4. Motion to Conduct an Executive Session

Mr. Chairman, I move that the Authority conduct an executive session pursuant to the Public Officers Law of the State of New York section 105 to discuss matters leading to the award of contracts to particular
corporations. On motion made and seconded, an Executive Session was held.

5. Motion to Resume Meeting in Open Session

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

6. Power Allocations Under the ReCharge New York Power Program

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to approve 517 allocations of available power under the ReCharge New York (‘RNY’) power program to the businesses listed in Exhibit ‘6-A.’ This action has been recommended by the
Economic Development Power Allocation Board (‘EDPAB’). Exhibit ‘6-B’ has been included to inform the Trustees of those businesses deemed ineligible by EDPAB.

BACKGROUND

        “On April 14, 2011, Governor Andrew M. Cuomo signed into law the RNY power program as part of Chapter 60 (Part CC) of the Laws of 2011. RNY makes available 910 Megawatts (‘MW’) of economic development power,
    50% of which will be provided by the Authority’s hydropower resources and 50% of which will be procured by the Authority on the open market. RNY contracts can be for a term of up to seven years in exchange for job and capital
     investment commitments. The statewide program is available to businesses and not-for-profit corporations for job retention, expansion and attraction purposes.

“The legislation stipulates that at least 350 MW of RNY power should be allocated to entities served by the New York State Electric and Gas, National Grid and Rochester Gas and Electric utility companies. At least 200 MW will be set aside for the purpose of attracting new businesses and encouraging expansion of existing businesses statewide. In addition, the legislation stipulates that up to 100 MW should be awarded to not-for-profit corporations (as defined in section 102 of the State’s Not-for-profit Corporation Law, subdivision five of paragraph (a)) and small businesses statewide.

“Under the legislation, eligible applicant shall mean an eligible business, eligible small business, or eligible not-for-profit. Further, an eligible applicant shall not include retail businesses as defined by EDPAB, including, without limitation, sports venues, gaming or entertainment-related establishments or places of overnight accommodations. For purposes of the RNY power program, EDPAB adopted, at their meeting of April 24, 2012, the existing definition of a retail business as a business that is primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain goods or services, consistent with the rules previously promulgated by EDPAB for implementation of the Economic Development Power program.

“RNY allocation awards are comprised of 50% hydropower and 50% Authority-procured market power. Prior to entering into a contract with an eligible applicant for the sale of RNY power, and prior to the provision of electric service relating to the RNY power allocation, the Authority shall offer each eligible applicant the option to decline to purchase the RNY market power component of such allocation. If an eligible applicant declines to purchase the RNY market power component, the Authority shall have no responsibility for supplying such market power to the eligible applicant.

“As envisioned by the legislation, the Authority worked cooperatively with the Department of Public Service (‘DPS’) to recommend to the New York State (‘NYS’) Public Service Commission (‘PSC’) reduced rates by utility corporations of RNY power program allocations. Pursuant to Chapter 60 and by order of the PSC, NYS utilities are required to deliver RNY power using discounted delivery rates. The discount derives from exempting RNY power from the Renewable Portfolio Surcharges, the Systems Benefits Charge and the Energy Efficiency Portfolio Standard Surcharge. The delivery discount will apply to a customer’s total allocation even if the customer decides to purchase the RNY market power component of its allocation from a non-Authority source.

“The application for the RNY power program was approved by EDPAB at their meeting of September 26, 2011. Applications for RNY power were subject to a competitive evaluation process and were evaluated based on the twelve criteria set forth in the RNY legislation. Pursuant to the legislation, the criteria were considered in the aggregate and none were presumptively determinative.

DISCUSSION

“In an effort to receive high-quality RNY applications and to announce the program, advertisements announcing the program were placed in major newspapers and business publications statewide; Web site postings were issued; mass emails were distributed and regional meetings were hosted by the Authority throughout the state. In addition, the program was promoted with assistance from state and local entities, including the Regional Economic Development Councils (‘REDCs’), the Empire State Development Corporation and other local and regional economic development organizations within the state such as the Manufacturers Association of Central New York. Further,
a RNY Call Center was established to assist prospective applicants and to further disseminate information regarding the RNY program. The RNY Call Center remains in operation. Finally, a targeted postal mailing to business customers utilizing a list of ten thousand businesses in NYS was made to foster interest in the program.

“As part of Governor Cuomo’s ‘New York Open for Business’ initiative, requests for all statewide economic development programs, including RNY, have been incorporated into a single on-line Consolidated Funding Application (‘CFA’). Beginning in September 2011, the CFA was available to applicants, marking a fundamental shift in how economic development resources are allocated. The CFA continues to serve as an efficient and effective tool to streamline and expedite the state’s efforts to generate sustainable economic growth and employment opportunities across the state. All applications that are considered for an RNY allocation were submitted through the CFA process.

“To support the Governor’s transformative plans to improve New York’s business climate and stimulate economic growth, ten REDCs were created. Through a performance-based, community-driven approach, each REDC has designed a strategic economic development model for their area and used the CFA as the primary support mechanism to work with eligible applicants to advance projects that demonstrate the greatest potential for job creation
and economic opportunity.

“The Power for Jobs (‘PFJ’) and Energy Cost Savings Benefit (‘ECSB’) programs expire on June 30, 2012. Current customers participating in these programs are required, under legislation, to apply for RNY in order to be considered for a RNY power allocation. RNY is a new economic development power program unrelated to the earlier PFJ and ECSB programs. All RNY applications are considered solely on their merits under the criteria established
by the RNY legislation.

“Current PFJ and ECSB customers who submit applications and who do not receive a RNY allocation will be considered for the transitional electricity discount (‘TED’). Pursuant to section 188-a of the economic development law, the Authority is authorized, as deemed feasible and advisable by the Trustees, to provide such TED as recommended by EDPAB. The Authority shall identify and advise EDPAB whether sufficient funds are available for funding of such discounts through June 30, 2016. The amount of the TED for the period of July 1, 2012 through June 30, 2014 shall be equivalent to 66% of the unit (per kilowatt-hour) value of the savings received by the applicant under the PFJ or ECSB during the 12 months ending on December 31, 2010. The amount of the TED for the period July 1, 2014 through June 30, 2016 shall be equivalent to 33% of the unit (per kilowatt-hour) value of the savings received by the applicant under the PFJ or ECSB during the 12 months ending on December 31, 2010. EDPAB’s recommended recipients for the TED will be made at a future date. Of the applications received, 410 PFJ and ECSB customers have applied for an RNY allocation.

“As of the January 27, 2012 deadline to submit a RNY application, 1,009 RNY applications have been submitted via the CFA process, requesting over 2,100 MW, a figure more than twice the total amount available for allocation under the legislation. Staff evaluated the completed applications pursuant to the following twelve criteria as set forth in the RNY legislation:

(i) the significance of the cost of electricity to the applicant's overall cost of doing business, and the impact that a recharge New York power allocation will have on the applicant's operating costs;

(ii) the extent to which a recharge New York power allocation will result in new capital investment in the state by the applicant;

(iii) the extent to which a recharge New York power allocation is consistent with any regional economic development council strategies and priorities;

(iv) the type and cost of buildings, equipment and facilities to be constructed, enlarged or installed if the applicant were to receive an allocation;

(v) the applicant's payroll, salaries, benefits and number of jobs at the facility for which a recharge New York power allocation is requested;

(vi) the number of jobs that will be created or retained within the state in relation to the requested recharge New York power allocation, and the extent to which the applicant will agree to commit to creating or retaining such jobs as a condition to receiving a recharge New York power allocation;

(vii) whether the applicant, due to the cost of electricity, is at risk of closing or curtailing facilities or operations in the state, relocating facilities or operations out of the state, or losing a significant number of jobs in the state, in the absence of a recharge New York power allocation;

(viii) the significance of the applicant's facility, that would receive the recharge New York power allocation, to the economy of the area in which such facility is located;

(ix) the extent to which the applicant has invested in energy efficiency measures, will agree to participate in or perform energy audits of its facilities, will agree to participate in energy efficiency programs of the authority, or will commit to implement or otherwise make tangible investments in energy efficiency measures as a condition to receiving a recharge New York power allocation;

(x) whether the applicant receives a hydroelectric power allocation or benefits supported by the sale of hydroelectric power under another program administered in whole or in part by the authority;

(xi) the extent to which a recharge New York power allocation will result in an advantage for an applicant in relation to the applicant’s competitors within the state; and

(xii) in addition to the foregoing criteria, in the case of a not-for-profit corporation, whether the applicant provides critical services or substantial benefits to the local community in which the facility for which the allocation is requested is located.

“Based on the evaluation of these criteria, staff scored and ranked the applicants. Staff’s recommendations also considered the scores of criteria numbers three and eight given by each REDC to each applicant in its region. All recommended RNY allocations are based on a composite of staff’s and REDC’s scoring. Allocations were recommended for those applicants who scored the highest under this evaluation process.

“In arriving at the recommended amount of each RNY allocation, staff attempted to maximize the economic benefits of low-cost Authority hydropower – the critical state asset at the core of the RNY program. To do so, staff recommended allocation amounts for each applicant with the goals of expanding participation in the program while also assuring that each recipient receives a meaningful allocation.

“Accordingly, business applicants who scored high were recommended for allocations of RNY power of 50% of the requested amount or average historic demand, whichever was lower; business applicants were capped at
10 MW for any recommended allocation. Not-for-profit applicants who scored high were recommended for allocations of RNY power of 33% of the requested amount or average historic demand, whichever was lower; these allocations were capped at 5 MW. Authority customers currently receiving hydropower allocations under other Authority power programs were recommended for allocations of RNY power of 25% of the requested amount with the same caps as stated above.

“Of the 877 applications reviewed, 517 were recommended for an allocation of RNY power by EDPAB at their meeting of April 24, 2012. The 517 businesses listed in Exhibit ‘6-A’ have stated on their applications a willingness to create or retain over 362,000 jobs in NYS. Additionally, these applicants will be committing to capital investments totaling nearly $30 billion over five years in exchange for the allocations. Of the total 517 recommendations, 320 businesses are recommended for 510.1 MW; 122 small businesses are recommended for 12.7 MW and 75 not-for-profit corporations are recommended for 73.1 MW.

“The RNY allocations in Exhibit ‘6-A’ are recommended for a period of up to seven years. Consistent with legislation, each allocation recommended by EDPAB shall qualify an applicant to enter into a contract with the Authority, pursuant to the terms and conditions of the recommendation by EDPAB and on such other terms as the Authority determines to be appropriate. The contract will have provisions for effective periodic audits of the recipient of an allocation for the purpose of determining contract and program compliance and for the partial or complete withdrawal of an allocation if the recipient fails to maintain mutually agreed-upon commitments, relating to, among other things, employment levels, power utilization, capital investment and/or energy efficiency measures. In addition, there shall be a requirement that a recipient of an allocation make its facilities available, at reasonable times and intervals, for energy audits and related assessments that the Authority desires to perform. At their March 27, 2012 meeting, the Trustees approved the form and substance of a retail contract that incorporates these requirements.

“There are a few applications that fall under the definition of retail businesses as established by EDPAB. At their meeting of April 24, 2012, EDPAB deemed ineligible those applications for the three businesses listed in Exhibit ‘6-B.’

“All other applications received are still under review and will be brought to the board at subsequent meetings.

Recommendation

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the allocations of power under the ReCharge New York Power program to the companies listed in Exhibit ‘6-A.’

“For the reasons stated, I recommend the approval of the above-requested action by adoption of a resolution in the form of the attached draft resolution.”

Vice Chairman Dyson asked if any member of the Board had a conflict of interest based on the list, provided by staff, of applicants being considered for power allocations. Trustee Nicandri recused himself from the vote since he voted for its approval at the Economic Development Power Allocation Board meeting.

Chairman Townsend recused himself from the vote as it relates to the following companies:

Adirondack Medical Center

Air Innovations, Inc.

Albany International Corp.

American Rock Salt Company LLC

Anheuser-Busch Employees Federal Credit Union

API Heat Transfer Inc.

Arch Chemicals, Inc.

Arnot Ogden Medical Center

Auburn Memorial Hospital

Cannon Industries Inc.

Canton Potsdam Hospital

Chapin Manufacturing

Citibank NA

Citigroup Global Markets Inc.

Claxton Hepburn Medical Center

Conax Technologies LLC

Constellation Brands Inc.

Currier Plastics, Inc.

Delphi Automotive Systems, LLC

Eastman Machine Company

Eaton Corporation

Edward John Noble Hospital

Elmhurst Dairy, Inc.

FiberMark North America, Inc.

Ford Motor Company

General Electric Company

General Mills Flour Division

Greatbatch, Ltd

IEC Electronics Corporation

International Fiber Corporation

Kaleida Health - DeGraff Memorial Hospital

Klein Steel Service Inc.

Moog Inc.

Nathan Littauer Hospital & Nursing Home

NYCO Minerals Inc

NYSE Euronext, Inc.

Oldcastle Precast, Inc.

Pace University

Pactiv Corporation

PCB Piezotronics, Inc.

Pfaudler Inc.

Queensboro Farm Products, Inc.

Saint-Gobain Abrasives, Inc.

Samaritan Keep Nursing Home

Samaritan Medical Center

Syracuse Plastics LLC

Sysco Syracuse, LLC

Universal Photonics Incorporated

Welch Allyn, Inc.

Trustee D. Patrick Curley recused himself from the vote as it relates to the following companies:

Mayer Brother Apple Products

MOD-PAC Corp

MOOG Inc.

PCB Piezotronics, Inc.

Trustee R. Wayne LeChase recused himself from the vote as it relates to the following companies:

General Electric

St. Lawrence University

Garlock Sealing Technologies

Infotonics Technologies Center

Corning, Inc.

World Kitchen, LLC.

United Health Services, Inc.

Arnot Ogden Medical Center.

Syracuse University

Dresser Rand

Trustee Mark O’Luck recused himself from the vote as it relates to Albany Molecular Sciences.

Mr. Pasquale made the following remarks:

“The Authority has waited a long time to have a new statewide economic development program, so I’m thrilled, today, to introduce ReCharge New York (“ReCharge”).

ReCharge has replaced two existing NYPA programs — the Power for Jobs (PFJ) and Energy Cost Savings Benefit (ECSB) Programs — which statutorily expire on June 30, 2012.

There are several reasons why ReCharge is superior to the PFJ and ECSB programs:

• The PFJ and ECSB programs were temporary; they were extended by law each year. This created uncertainty for businesses in the programs. ReCharge is permanent and requires no further action by the Legislature.

• The annual extension of the PFJ and ECSB programs meant that businesses would have only one year of energy cost certainty. ReCharge provides up to 7 years low-cost power contracts, allowing businesses to plan and facilitate greater investment in New York State.

• No new businesses were allowed into the PFJ and ECSB programs. ReCharge is open to all eligible businesses, statewide.

• The PFJ and ECSB programs were primarily reliant on NYPA cash subsidies. That was not sustainable. ReCharge is backed by 455 megawatts of stable and low-cost hydropower, allowing the program to be self-sustaining.

• The PFJ and ECSB programs were created by different legislation, had very different criteria and provided inconsistent benefits to the Authority’s customers. Recharge has very prescriptive criteria and consistent pricing.

Recharge is a new business model for the Authority. The Authority had never attempted an undertaking like this. PFJ was “sale-for-resale” – the Authority sold power to the IOUs and they, in turn, resold it to the recipients. The IOUs billed the customers and took on the credit risk. Recharge allocations will be “direct-serve.” The Authority will bill the customers, and as a result, take on the credit and collection risks.

Recharge levels the playing field. All existing customers had to reapply and were evaluated, competitively, along with all the new businesses that were applying for low-cost power for the first time. The legislation did not provide guidelines on sizing allocations. All applicants were evaluated against the same criteria. The application process was based on merit and regional priorities. The goal was to maximize participation in the program while still providing a meaningful benefit.

There were many challenges to overcome before getting to this point. Staff tried for years to get legislation passed to create a new economic development program. I cannot tell you how many email exchanges, conference calls and meetings Don Russak and I participated in – with the Governor’s staff, legislators and business groups – trying to develop a program that was palatable to everyone.

Launching Recharge was a NYPA-wide effort; almost every business unit was, or will be, involved in Recharge in one way or another.

Staff needed to develop:

§ RNY Customer Contract Template

§ RNY-1 Tariff for 4 zonal rates for Hydro only and blended product

§ RNY savings models

§ Six Delivery Service Arrangements with IOU’s and LIPA

In a very short period of time, staff had to, among many things:

§ Create a project plan

§ Create an outreach plan, create logos

§ Develop an application

§ Create a scoring matrix

§ Set up a call center to handle all inquiries. (Staff received positive feedback from both businesses and legislators)

§ Review over 1,000 applications, against very prescriptive criteria, in a very short period of time.

There is still more work to be done. Staff has to execute the more than 500 contracts being recommended for approval today; continue to review another few hundred applications; and monitor those applicants who receive allocations to ensure that they are in compliance with the commitments they have agreed to.

It is important that the Board understand the challenges that had to be overcome and the monumental effort put forth by staff and others to launch Recharge. I would like to thank the following persons for their efforts:

Tom Congdon of the Governor’s staff – the real quarterback of this effort – deserves much of the credit for making ReCharge a reality. In addition, Jim Malatras and Irene Baker were very helpful in launching the program.

Legal – Judith McCarthy, Arthur Cambouris and Vincent Esposito for drafting the legislation; reviewing the tariffs and contract template.

Corporate Secretary and her staff for rising above and beyond and getting everything right even when substantial changes are made at the last minute.

Business Services – Donald Russak and Tom Concadoro who will be responsible for any non-payment issues that may arise from the new business model.

Information Technology – Dennis Eccleston made sure staff had resources available at all times. Special thanks also to Mike Farley and Maria He for their assistance.

Energy Services – Paul Belnick for his help in developing the measure staff used to score the criteria as it relates to energy efficiency.

Public and Governmental Affairs and Corporate Communications – Joseph Leary, Michael Saltzman and their staffs.

Energy Resource Management – Edward Welz and his staff who will be responsible for procuring the market power that compliments NYPA hydropower in Recharge.

Mailroom– Chris Copeland and his staff worked until midnight this past Friday and came in on Saturday to make sure staff would be able to mail more than 500 contract packages as soon as
the Trustees approve the recommendations today.

Marketing:

Marketing Analysis and Administration – under the direction of Mike Lupo – thanks to Egle Travis, Mark Schwartzburt, Mike Quinn and Chris Vitale.

Everyone in Business Marketing and Business Power Allocations. Special kudos to Tim Muldoon, Emily Alkiewicz and Tabitha Robinson.

Thanks to others in Marketing, including Keith Hayes, Leanore Welz, Tony Savino and Frank Rutigliano, from Business Services, for the work they did to launch this program.

Everyone worked quickly, professionally and, most of all, incredibly competently. I am very proud of the work they did and honored to be part of the team.

Lastly, I would like to ask Mr. Michael Huvane to formally present staff’s recommendation to the Board. Mr. Huvane was the real leader of this effort. He kept staff focused, and most importantly, kept me sane in the process.

Thank you for allowing me these few minutes to address the Trustees.”

Vice Chairman Dyson said the ReCharge New York Power Program is among the great accomplishments of the Authority and the Trustees are thankful to the staff for their hard work in launching this project. He
said the Authority has achieved the Governor’s objective and the Legislature and the Governor’s administration can be proud of the way the Authority has implemented this program under their direction. Special thanks to James Pasquale and his colleagues for implementing this program on time and efficiently. He ended by saying that on behalf of the Governor and the State of New York he would like to thank the staff for a job well done.

Mr. Huvane presented highlights of staff’s recommendation to the Trustees.

The following resolution, as submitted by the President and Chief Executive Officer and as read by Vice Chairman Dyson, at the request of Trustee Curley, was approved by a vote of 6 to 1, with Trustee Nicandri abstaining and Chairman Townsend and Trustees Curley, LeChase and O’Luck being recused as it relates to the aforementioned companies.

WHEREAS, the Economic Development Power Allocation Board has recommended that the Authority approve the ReCharge New York (“RNY”) power allocations to the companies listed in Exhibit “6-A”;

NOW THEREFORE BE IT RESOLVED, That the Authority hereby authorizes the allocations of ReCharge New York power to the companies listed on Exhibit “6-A” 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.

7. Environmental Justice Implementation Plan – Authorization

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to approve the Authority’s Environmental Justice Implementation Plan (‘Plan’) (Exhibit ‘7-A’). The Plan aims to strengthen environmental justice by ensuring that the public health and quality
of life interests of low-income and minority communities surrounding the Authority’s facilities are represented in applicable Authority activities. The Plan will establish an environmental justice program that facilitates consideration
of possible environmental justice impacts in the development of Authority projects and operations.

BACKGROUND

“The United States Environmental Protection Agency (‘EPA’) defines environmental justice as ‘the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.’

“The New York State Department of Environmental Conservation (‘DEC’) has identified Potential Environmental Justice Areas as those within U.S. Census blocks (200 to 500 households) that, in the 2000 U.S. Census, met one or more of the criteria identified in Policy CP-29:

• 51.1% or more of the population in an urban area reported themselves as members of minority groups;

• 33.8% or more of the population in a rural area reported themselves as members of minority groups; or

• 23.59% or more of the population in an urban or rural area had incomes below the federal poverty level.

“The Authority adopted both the EPA’s definition of Environmental Justice and the DEC’s criteria for Potential Environmental Justice Areas. The Authority will make necessary adjustments when DEC updates its criteria based in the 2010 census and new regulations.

“On August 4, 2011, Governor Andrew M. Cuomo signed the Power New York Act of 2011, reauthorizing Article 10 of the State Public Service Law for the siting of generating facilities. The new Article 10 includes a focus on environmental justice issues and greatly enhances public participation in that process.

“The Authority has a history of striving to protect and improve the environment and to address the needs and concerns of communities in which its projects are located. In the past, the Authority has worked to benefit the communities where locations of its facilities had the potential for adverse impacts such as health, environmental, social or economic.

“Some of the major initiatives which the Authority has carried out to achieve environmental justice objectives in communities include the installation of pollution control systems on 1,000 New York City buses and the installation of eight clean fuel cells at New York City’s wastewater treatment plants. The Authority funded the conversion of eight postal trucks to run on electricity in the Bronx and supplied a 66-seat electric bus to serve two
schools managed by the United Talmudical Academy of Williamsburg, Brooklyn. On Staten Island, the Authority converted the boiler of Public School 13 to natural gas, replacing a 20-year-old No. 4 heating oil boiler, and installed high-efficiency postal trucks serving the borough.

“Historically, the Authority has led by example and as a good neighbor that seeks to improve the areas surrounding its facilities. To that end, the Authority has partnered with community groups and organizations such as the United Puerto Rican Organization of Sunset Park (‘UPROSE’) and the Community Foundation for Greater Buffalo to address environmental justice concerns in disenfranchised and affected areas.

DISCUSSION

“The Trustees are requested to adopt an Environmental Justice Plan with the following goals:

• strengthen relationships with environmental justice communities;

• establish a program that facilitates automatic consideration of possible community impacts; and

• utilize training and other resources to sensitize Authority employees to environmental justice concerns.

“The Environmental Justice Plan consists of five strategies:

1.       Collaborate with Environmental Justice Communities near existing or proposed infrastructure. The Authority will establish effective communication channels with the Environmental Justice Communities maintaining an open dialogue and a working relationship with them. For example, the Authority will periodically inform the Environmental Justice Communities of projects that affect them via print, Web site or other conduits, as needed.

        2.       Develop Environmental Justice Training for Authority employees. The Authority will offer an environmental justice training for relevant business units. The training will involve discussion of potential barriers affecting communication with community stakeholders, site visits and discussion on how permitting decisions potentially impact Environmental Justice Communities. It will include an awareness program for employees who are working with the public and/or on large capital projects.

     3.       Implement Energy Efficiency Educational Program within Environmental Justice Communities. Consistent with its Mission, the Authority will seek opportunities to work within environmental justice schools in developing or implementing an educational curriculum for students in grades 4 thru 8 that will address where and how electricity is created and transmitted, energy conservation and alternative energy concepts. This work will be coordinated with the New York State Department of Education. Funding requests will be included in future operating budgets.

     4.       Create an internal Environmental Justice Task Force to ensure timely involvement of Environmental Justice Communities. This task force will consist of an internal group of designated technical experts from relevant departments to make recommendations and institute processes for dissemination of information when the construction of a project is proposed.

    5.       Develop Energy Services projects. Subject to the Authority’s statutory power, the Authority will finance energy related projects, programs and services in Environmental Justice communities. For the purposes of this program, an eligible project, program or service should be within two miles of an Authority facility in an urban area and within six miles of an Authority facility in a rural area. The Authority will provide non-recoverable funding for such projects. The Authority will partner with Environmental Justice communities in various areas of the state to identify potential projects and target participants who are eligible for the Authority’s energy services programs. For example, energy services projects may include energy efficiency, electric or hybrid transportation technology, or clean energy installations such as solar photovoltaic, geothermal or biomass.

FISCAL INFORMATION

“The estimated cost for the entire Plan is approximately $850,000 over three years. Detailed requests and justifications for funding of specific components of the Plan will be presented during future budget proposals. Funding, as may be approved for each of the components, including the implementation of the energy efficiency educational program and the energy service projects, will be provided from the Operating Fund.

RECOMMENDATION

“The Vice President – Public and Government and Regulatory Affairs and the Vice President – Environmental Justice recommend that the Trustees approve the Environmental Justice Implementation Plan as described above.

“For the reasons stated, I recommend the approval of the above requested action by adoption of a resolution in the form of the attached draft resolution.”

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

RESOLVED, That the Trustees hereby authorize the Authority’s Environmental Justice Implementation Plan as recommended in the foregoing report of the President and Chief Executive Officer; and be it further

8. Informational Item: New York Power Authority’s Incident Communications Protocol

The President and Chief Executive Officer submitted the following report:

SUMMARY

“This report is to advise the Trustees of the modification and expansion of the Authority’s internal and external communications protocol.

BACKGROUND

“Last August, the Authority responded immediately to threats from Hurricane Irene and Tropical Storm Lee. More recently, on-site employees made crucial operational decisions during a circuit breaker failure in the Massena Substation, which is part of the St. Lawrence Power Project. Both incidents have drawn attention to the Authority’s communication procedures. This informational item to the Trustees will serve to convey established internal communication protocol. Additionally, the Authority’s existing incident communications process has been expanded to make clear and specific the Authority’s role and responsibilities so that all stakeholders (internal, external, and interagency) will have a clear understanding of what to expect from the Authority in times of crisis. Internal notifications based on the incident’s level of severity (1, 2 and 3) have been slightly revised. External notifications to government officials and community partners have been refined for all levels. Finally, the Authority has partnered with other New York State emergency responders to improve incident communications among state entities.

DISCUSSION

Internal Notifications

“Each type of incident is categorized into levels (listed below) based on severity. These categories dictate who, within the Authority, receives a notification. The most efficient method of notification is via email; however, the Authority’s senior management may use discretion in choosing the communication method (i.e. email, telephone, etc.) and in expediting and/or omitting communication steps depending on urgency of response and/or availability of individuals, as well as the nature of the incident (i.e. Safety, Environmental, Cyber, Power System, etc.).

Level 1 (Routine)

Examples: Heavy Snowfall, Medical Incident (minor injuries), Thunderstorm, Suspicious Mail

Level 2 (Serious)

Examples: Earthquake, Hurricane, Ice Storm, Flooding, Catastrophic Equipment Failure, Fire, Medical Incident (moderate injuries, off-site assistance required)

Level 3 (Critical)

Examples: Imminent or Developing Dam Breach/Failure (EAP), Act of Terrorism, Medical Incidents (serious injuries or fatalities)

External Communications

Media

“The Authority’s Corporate Communications group has an existing Media Relations Guide that includes factual information on each of the Authority’s Generation and Transmission assets. The guide also includes a list of the media stakeholders and contact information for each area. When incidents occur, this guide is used to create talking points for designated senior management and news releases for the affected region(s), as requested. The Communications group has the experience necessary to make appropriate judgment calls, with the approval of the Authority’s Chief Executive Officer, on how much outreach to media partners is appropriate given the incident level.

Public, Government and Regulatory Affairs

“Under the leadership of the Vice President of Community and Governmental Relations, the Authority continues to nurture the good standing it has with external stakeholders, including government and regulatory officials, environmental justice communities and the general public. Using the talking points established by Corporate Communications, the Authority’s external affairs team connects with their existing network of stakeholders in the affected area to inform them of the incident and reassure them of the Authority’s commitment to safety and stewardship as good neighbors, especially in the areas where the Authority’s facilities are located.

Inter-agency Coordination

“The Authority has been working on producing a Central Region Emergency Response After Action Report. The purpose of this report is to document the communications that occurred during Hurricane Irene and Tropical Storm Lee in the Central Region during August 2011, with particular emphasis on capturing inter-agency (Federal Energy Regulating Commission, New York City Department of Environmental Protection, New York State Canal Corporation, New York State Office of Emergency Management, Schoharie County Office of Emergency Management, and Local Emergency Responders) communications.

“Recommendations from the report indicate that while there were no major protocol changes necessary, there are some areas of refinement and coordination that have already been proactively implemented by the Authority and some of the other entities; most operational recommendations for improved physical communications (cellular service/land lines/diversification) have already been implemented at minimal costs.

“Currently, revisions are being made to the report before the final document is released.”

Mr. Bradford Van Auken presented an overview of the Authority’s Incident Communications Protocol to Trustees. Responding to a question from Trustee Nicandri, Mr. Van Auken said that during the flood from Hurricane Irene and Tropical Storm Lee last August, staff had some challenges with the phones and cellular infrastructure in the central region, most of which were washed out. Staff, however, with the assistance of the Information Technology staff, was able to communicate with stakeholders using the Authority’s internal network. Mr. Van Auken added that the infrastructure at the Blenheim-Gilboa facility has since been upgraded and the risk to the phone and cellular infrastructure would be much less should the Authority experience another flood.

President Quiniones said that the Authority is mindful of the importance of being able to communicate with the public and stakeholders in close proximity to its facilities on a timely basis. Responding to a question from Vice Chairman Dyson, President Quiniones said that, in order to strengthen communications, the Authority is considering construction of cell towers at the B-G facility, in collaboration with the telecommunications providers in the area. He added that, in doing so, the local communities in the area can benefit from those added telecommunications infrastructure as well.

Next Meeting

The next regular meeting of the Trustees will be held on Tuesday, May 22, 2012, at 11:00 a.m., at the Clarence D. Rappleyea Building, White Plains, New York, unless otherwise designated by the Chairman with the concurrence of the Trustees.