MINUTES OF THE ANNUAL MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

March 27, 2012

 

Table of Contents

 

 

                Subject                                                                                                                                 

 

 

               

        Certificates of Appreciation                                                                                                    

1.                   Adoption of the March 27, 2012 Proposed Meeting Agenda                                           

2.                   Consent Agenda:                                                                                                                      

a.       Minutes of the Regular Meeting held on January 31, 2012                              

b.       Transfers of Industrial Power                                                                                  

 

c.        Annual Report of Procurement Contracts, Guidelines for Procurement Contracts and Annual Review of  Open Procurement Service Contracts, Exhibit - “2c-A-1” –  “2c-A-3”
Resolution
                                                      

       

d.       Annual Review and Approval of Guidelines and Procedures for and Annual Report of the Disposal of Personal Property, Exhibit - “2d-A” & “2d-A-1”
Resolution
                                                

     

e.        Annual Review and Approval of Guidelines and Procedures for the Disposal of Real Property, Guidelines and Procedures for the Acquisition

Real Property and Annual Report for the Disposal of Real Property, Exhibit - “2e-A” – “2e-C”; “2e-C-1”
Resolution
 

f.        Annual Review and Approval of Guidelines for the  Investment of Funds and 2011 Annual Report on Investment of Authority Funds,  Exhibit - “2f-A” & “2f-B”
Resolution
                                                            

 

g.       Annual Review and Approval of Certain Authority Policies, Exhibit, - 2g-A – “2g-R”
Resolution

 

h.       Adoption of the Amended Deferred Compensation Model  Plan For Employees of the Power Authority of the State
of New York (Section 457 Deferred Compensation Plan), Exhibit - “2h-A” – “2h-B”

Resolution                                   

                               

i.         Lease of Office Space – Clarence D. Rappleyea Building – Canter Law Firm, P.C., Exhibit - “2i-A”
Resolution

 

j.         Lease of Warehouse Space – Niagara Power Project – DRC Development, LLC, Exhibit - “2j-A”
Resolution

 

k.       Procurement (Services) Contracts – Business Units and Facilities – Awards, Extensions and Additional Funding, Exhibit - “2k-A” – “2k-B”
Resolution

 

l.         Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program –  Isolated Phase Bus and Phase Reversal Switch –  Contract Award                                                                          

 

m.     New York Power Authority’s Annual Strategic Plan, Exhibit - “2m-A” – “2m-B”
Res
olution

 

 

Discussion Agenda:                                                                                                                                

3.                   Reports from:

a.       President and Chief Executive Officer, Exhibit - “3a-A”

        Resolution

 

b.       Acting Chief Operating Officer, Exhibit - “3b-A”
Resolution

 

c.        Acting Chief Financial Officer, Exhibit - “3c-A”
Resolution

 

4.                   Allocations of Expansion Power, Exhibit - “4-A”; “4-A-1” –  “4-A-4”                                                                                                              

Resolution                                                                                                                                                            

 

5.                   Municipal and Rural Electric Cooperative Economic Development Program – Allocation to Delaware County Electric Corporation
Resolution

 

6.                   Agreement for the Sale of ReCharge New York Power and Energy and Service Tariff RNY-1, Exhibit - “6-A” – “6-B”

Resolution 

 

7.                   Power Contract with the Town of Massena – Massena Electric Department, Exhibit - “7-A” – “7-B”

Resolution

 

8.                   Solar Market Acceleration Program Authorization and 100 MW Solar Initiative – Staff Report                                                         

Resolution

 

9.                   2011 Financial Reports Pursuant to Section 2800 of  the Public Authorities Law and Regulations of the  Office of the State Comptroller, Exhibit - “9-A” – “9-B”
Resolution

    

10.                Election of Officers:                                                                                                                           

 

    a. Chief Operating Officer                                                                                                  

 

    b. Chief Financial Officer                                                                                                   

 

    c. Vice Chairman                                                                                                                 

 

Resolution

11.                Amendments to the Authority’s By-laws, Exhibit - “11-A” – “11-C”

Resolution

 

12.                Adoption of Strategic Planning and Energy Policy Committee Charter, Exhibit - “12-A”
Resolution   

 

13.                Strategic Planning and Energy Policy Committee Appointments                                                            

 Resolution

 

14.                Other Business                                                                                                                     

15.                Motion to Conduct an Executive Session                                                                          

16.                Motion to Resume Meeting in Open Session                                                                      

17.                Next Meeting                                                                                                                            

Closing                                                                                                                                       

 

Minutes of the Annual 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 11:00 a.m.

 

The Members of the Board present were:

 

                                Michael J. Townsend, Chairman

                                D. Patrick Curley, Trustee

                                John S. Dyson, Trustee

                                Eugene L. Nicandri, Trustee

                                Mark O’Luck, Trustee                       

----------------------------------------------------------------------------------------------------------------------------------------------------

Gil C. Quiniones                                  President and Chief Executive Officer

Judith C. McCarthy                            Executive Vice President and General Counsel

Edward Welz                                        Acting Chief Operating Officer

Donald Russak                                    Acting Chief Financial Officer

Thomas Antenucci                             Senior Vice President – Power Supply Support Services

Steve DeCarlo                                      Senior Vice President – Transmission

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 ServicesEnergy Services and Technology

John Canale                                         Vice President – Project Management

Thomas Concadoro                            Vice President and Controller

Sobeida Cruz                                        Vice President – Environmental Justice

Dennis Eccleston                                 Vice President – Information Technology/Chief Information 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 OfficerEnergy Risk Assessment and Control

John Suloway                                       Vice President – Project Development, Licensing and Compliance

Brian McElroy                                       Treasurer

Karen Delince                                       Corporate Secretary

Jill Anderson                                         Director – Business Integration

Janis Archer                                          Director – Strategy Management

Mike Lupo                                             Director – Marketing Analysis and Administration 

Mark O’Connor                                    Director – Real Estate

Michael Saltzman                                 Director – Media Relations

Khalil Shalabi                                       Director Power Resource Planning

Guy Sliker                                             Director – Renewable Energy Resources and Technology

Gerard Vincitore                                  Director – Financial Projects

Lynn Hait                                             Regional Manager – Central New York

Paul Tartaglia                                       Regional Manager – SENY

Alice Conway                                      Manager - Benefits

Gary Schmid                                        Manager – Network Services Infrastructure

Ruth Colon                                          Senior Business Integration Project Manager

Lewis Payne                                        ROW/Environmental Supervisor

Jeffrey Geller                                        Environmental Scientist

Egle Travis                                           Pricing and Power Contracts Analyst II

Lorna M. Johnson                              Assistant Corporate Secretary

Sheila Baughman                                Senior Secretary – Corporate Secretary’s Office

Joseph M. Bress                                 Consultant

R. Lowman                                           Field Engineer – RTS

 


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


Introduction

                Chairman Townsend welcomed the Trustees and staff to the meeting.

Certificates of Appreciation

                Chairman Townsend said that the Trustees periodically receives newspaper articles pertaining to the Power Authority; one such article highlighted six staff members who received Technology Transfer awards for research and development projects they worked on with the Electric Power Research Institute(“EPRI”) in 2011.  Chairman Townsend made the following remarks on behalf of the Trustees:

“The nuts and bolts of what these employees helped to achieve – finding new ways, on the one hand, to avoid costly shutdowns and repairs, and on the other, to improve our processes for managing the growth of invasive species underneath our transmission towers – dramatizes what the Power Authority stands for: working to make things better for our customers and the people of New York State.  But the best part is--as the title of the EPRI award implies--they are technologies that can be transferred.  Not only will they benefit our operations--as I understand they already have--but they will also benefit the industry as a whole.

 

To the six NYPA employees who contributed to these innovations, we want to say we are proud of what you accomplished.  By enhancing power generation and transmission across the industry you have reinforced the message that the New York Power Authority is an asset to all who come in contact with us.

 

On behalf of the entire Board of Trustees, I would like to thank John DeLise, Jeffrey Geller, Lewis Payne, George Stranovsky, Paul Tartaglia and Tom Tyrrell for your remarkable contributions.

 

 And now, I have the honor to call up those awardees able to make it here today, to present these Certificates of Appreciation.”

 

                Chairman Townsend then presented the Certificates to those awardees present at the meeting.

 

 

1.                   Adoption of the March 27, 2012 Proposed Meeting Agenda

                On motion made and seconded, the Agenda for the meeting was approved as amended.

 

2.                   Consent Agenda:

                On motion made and seconded, the Consent Agenda was approved as amended.  Chairman Townsend said that the Economic Development Power Allocation Board (“EDPAB”) had recommended that the Authority’s Trustees approve item 2b (Transfers of Industrial Power) at its meeting on Monday, March 26th.  Trustee Nicandri recused himself from the vote on item 2b since he voted for its approval at the EDPAB meeting.

 

a.                   Approval of the Minutes

 

                The Minutes of the Regular Meeting held on January 31, 2012 were unanimously adopted.


b.                   Transfers 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 six existing customers that have requested such transfers due to changes to their corporate identities for various business reasons or because of relocation of their business, operations or personnel to other facilities.

 

BACKGROUND

 

“This is an administrative item brought to the Trustees at regular intervals.  Three of the six companies are requesting that the Trustees approve a transfer of their existing power allocation to a new corporate entity.  The power allocation and/or benefits for these three customers will continue to be delivered to the same location.  Two of the customers are requesting a physical allocation transfer due to relocating from one facility to another.  The remaining customer is requesting a redistribution of power between existing facilities to reflect movement of operations and personnel of the corporation.  All of the customers will continue to provide the same products and/or services as they did prior to the transfers.  The reasons for such transfer requests are described below.

 

“The Power for Jobs (‘PFJ’) and Economic Development Power (‘EDP’) allocations involved in this item were approved by the Economic Development Power Allocation Board (‘EDPAB’) at its March 26, 2012 meeting, as required under Economic Development Law §186.

 

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

DISCUSSION

 

                “The proposed transferees are as follows:

 

Citigroup North America Inc. (‘Citigroup’), located in Amherst, Erie County, has been in business since 2008.  Citigroup’s New York City-based parent company provides a broad range of banking and financial products and services around the globe.  The company was awarded a 1,400 kW Replacement Power (‘RP’) allocation by the Trustees at their meeting of January 30, 2007.  The business conducted by the company remains unchanged and the Amherst location remains the same as well.  Due to restructuring, the Amherst facility’s corporate name is now Citigroup Technology Inc.  Citigroup is in compliance with its job commitment.  The company will continue to honor all of the terms and conditions of its contract with the Authority.

 

JP Morgan Chase (‘JPMC’), located in Manhattan, provides a broad range of banking and financial products and services around the world.  The company has a 24,200 kW allocation of EDP through the New York City Public Utility Service.  The company is requesting a change in how its power allocation is distributed to its facilities to more accurately reflect staffing and operations among its various locations within New York City.  JPMC is in compliance with its job commitments and will continue to honor all of the terms and conditions of its contract with the Authority.  The company requests that the Trustees approve its redistribution of the allocation among its facilities.

 

Kreher’s Poultry Farms (‘Kreher’s’), located in Clarence, Erie County, have been in business since 1924.  Kreher’s is a third-generation family fresh egg producer in Western New York.  The company was originally awarded a 350 kW PFJ allocation by the Trustees at their meeting of April 27, 1999.  The business conducted by the company remains unchanged and the Clarence location remains the same as well.  Due to restructuring, the company is now named Kreher’s Farm Fresh Eggs, LLC.  Kreher’s is in compliance with its job commitment.  The company will continue to honor all of the terms and conditions of its contract with the Authority. 

 

Luvata Buffalo, Inc. (‘Luvata’), located in Buffalo, Erie County, has been in business under various owners since 1906, with this facility in operation since that date.  Luvata manufactures copper and brass sheets and rolls.  The company has several RP allocations totaling 11,560 kW and 5,000 kW of PFJ in the form of an electricity savings reimbursement.  All of the allocations are job compliant except for a 250 kW RP allocation which reported 2011 employment at 76% of its job commitment.  The Trustees authorized a lowered job commitment for this allocation commencing July 2013 when they approved the company’s long-term contract extension at their December 2010 meeting.  The New York-based company’s parent, Aurubis AG, has created a new corporate entity called Aurubis Buffalo, Inc.  Aurubis Buffalo, Inc. will assume all assets and liabilities of Luvata.  The location will remain the same, as will the business carried on at the location.  Luvata requests that the PFJ and RP allocations be transferred to Aurubis Buffalo, Inc., where the company will continue to honor all of the terms and conditions of its contract with the Authority.

 

Shipman Printing Industries Inc. (‘Shipman’) located in Wheatfield, Niagara County has been in business under various owners since 1906 in the Niagara Falls area.  Shipman is a commercial printer and producer of envelopes, web cut sheets, stitched books and notepads.  The company was awarded a 130 kW allocation by the Trustees at their meeting of February 26, 2008.  Shipman is moving its operations to a larger nearby facility at 6120 Lendell Road in Sanborn, New York.  The company requests that the Trustees transfer the allocation, which it is not yet using, including its employment and investment commitments, to the new location.  Shipman agrees to honor all of the terms and conditions of its contract with the Authority when the allocation begins service.

 

The American Folk Art Museum (‘the Museum’) located in Manhattan was founded in 1961 and is a museum devoted to American folk art.  The company was originally awarded a 50 kW PFJ allocation by the Trustees at their meeting of May 20, 1999.  The company is moving its location to 2 Lincoln Square following the sale of its building to the Museum of Modern Art.  The company requests that the Trustees transfer the allocation, including its employment commitment, to the Lincoln Square location.  The Museum is in compliance with its job commitment.  The Museum’s name remains the same and it will continue to honor all of the terms and conditions of its current contract with the Authority. 

RECOMMENDATION

 

                “The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the transfer of power allocations for these six existing customers; three that have changed their corporate name for a variety of business reasons, two requesting a physical allocation transfer due to relocating from one facility to another and one requesting reallocation of power between existing facilities to reflect movement of operations and personnel of the corporation.  All of the transferees are maintaining the same industry operations and agree to continue meeting contractual commitments.

 

“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 Authority hereby authorizes the transfers of six 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 Acting 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.


c.                    Annual Report of Procurement Contracts, Guidelines for Procurement Contracts and Annual Review of Open Procurement Service Contracts 

 

                                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve the 2011 Annual Report of Procurement Contracts (‘Annual Report’) (Exhibit ‘2c-A-3’) and the Guidelines for Procurement Contracts (‘Guidelines’) (Exhibit ‘2c-A-2’) and to review open service contracts exceeding one year that were active in 2011 as detailed in the Annual Report (Exhibit ‘2c-A-3’).  An Executive Summary is set forth in Exhibit ‘2c-A-1.’

 

BACKGROUND

 

                “Section 2879 of the Public Authorities Law (‘PAL’) governs the administration and award of procurement contracts equal to or greater than $5,000.  Section 2879 of the PAL requires public authorities to adopt comprehensive guidelines detailing their operative policy and instructions concerning the use, awarding, monitoring and reporting of procurement contracts.  The Authority’s Guidelines were adopted by the Trustees at their meeting of October 31, 1989 and were implemented as of January 1, 1990.  The Guidelines have been amended as deemed advisable and necessary, and reviewed and approved annually since that date, most recently on March 29, 2011.

 

“Section 2879 of the PAL also requires authorities to review and approve such guidelines annually and to file a report regarding procurement contracts with the Director of the Division of the Budget, the Department of Audit and Control, the Department of Economic Development, the Senate Finance Committee, the Assembly Ways and Means Committee and the Authorities Budget Office.  The Annual Report must include a copy of the Authority’s current Guidelines, details concerning any changes to the Guidelines during the year and particular information concerning procurement contracts.  For each procurement contract included in the report, the following information must be identified:

 

[A] listing of all procurement contracts entered into [by the Authority], all contracts entered into with New York State business enterprises and the subject matter and value thereof, all contracts entered into with certified minority or women-owned business enterprises and the subject matter and value thereof, all referrals made and all penalties imposed pursuant to section three hundred sixteen of the executive law, all contracts entered into with foreign business enterprises, and the subject matter and value thereof, the selection process used to select such contractors, all procurement contracts which were exempt from the publication requirements of article four-C of the economic development law, the basis for any such exemption and the status of existing procurement contracts.

 

                “Lastly, Section 2879 of the PAL requires an annual review by the Trustees of open service contracts exceeding one year.  Those long-term service contracts exceeding one year and awarded after January 1, 1990 are also included in the Annual Report.

 

DISCUSSION

 

                “The 2011 Annual Report is attached for the Trustees’ review and approval (Exhibit ‘2c-A-3’).  The Annual Report reflects activity for all procurement contracts equal to or greater than $5,000, as identified by the Authority’s SAP computer system, that were open, closed or awarded in 2011, including contracts awarded in 1990 through 2011 that were completed in 2011 or were extended into 2012 and beyond.  In addition, fossil fuels transactions reported by the Fuels Planning and Operations group and financial-related services reported by Corporate Finance (of the Energy Resource Management and Business Services Business Units, respectively), are included in the Annual Report of Procurement Contracts.  All additional information required by the statute is also included.  The Trustees are requested to approve the attached Annual Report pursuant to Section 2879 of the PAL prior to submittal thereof to the Director of the Division of the Budget, the Department of Audit and Control, the Department of Economic Development, the Senate Finance Committee, the Assembly Ways and Means Committee and the Authorities Budget Office.

 

                “A copy of the Guidelines effective March 31, 2012 (Exhibit ‘2c-A-2’) is attached to the Annual Report.  These Guidelines are amended in accordance with recently enacted provisions of Section 163-a of the New York State Finance Law, as well as with Section 2879-a of the PAL, the New York State Comptroller Regulations and the State Authority Contract Manual, as further set forth in Exhibit ‘2c-A-1.’

 

“The Guidelines generally describe the Authority’s process for soliciting proposals and awarding contracts.  Topics detailed in the Guidelines include solicitation requirements, evaluation criteria, contract award process, contract provisions, change orders, Minority/Women-owned Business Enterprise (‘M/WBE’) requirements, employment of former officers and reporting requirements.

 

RECOMMENDATION

 

                “The Senior Vice President – Corporate Support Services and the Vice President – Procurement recommend that the Trustees approve the 2011 Annual Report of Procurement Contracts, the Guidelines for Procurement Contracts and the review of open service contracts as attached hereto in Exhibits ‘2c-A-1’ through

‘2c-A-3.’

 

                “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 pursuant to Section 2879 of the Public Authorities Law and the Authority’s Procurement Guidelines, the Annual Report of Procurement Contracts, as listed in Exhibit “2c-A-3,” and the Guidelines for the use, awarding, monitoring and reporting of Procurement Contracts (Exhibit “2c-A-2”), as amended and attached hereto, be, and hereby are, approved; and be it further

 

                RESOLVED, That the open service contracts exceeding one year be, and hereby are, reviewed and approved; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.

 

 


d.                   Annual Review and Approval of Guidelines and Procedures for and Annual Report of  the Disposal of Personal Property

                           

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to review and approve the Guidelines and Procedures for the Disposal of Personal Property (‘Personal Property Guidelines’), which address the disposal of Authority-owned materials, tools, equipment and vehicles with a value in excess of $5,000, in compliance with Public Authorities Law § 2896, enacted as part of the Public Authorities Accountability Act of 2005 (‘PAAA’) and amended by the Public Authorities Reform Act of 2009 (‘PARA’).  The Personal Property Guidelines are attached hereto as Exhibit ‘2d-A.’  The Trustees are also requested to review and approve the 2011 Annual Report of the Disposal of Personal Property, attached hereto as Exhibit ‘2d-A-1.’

 

BACKGROUND

 

“On January 13, 2006, the PAAA was enacted to codify model governance principles for New York State’s public authorities to further accountability and transparency.  Among its provisions, the PAAA, and as later amended by PARA, established requirements for the disposal of public authority personal property.  The law also required each authority to draft guidelines consistent with the legislation dealing with these issues, to review and approve such guidelines annually and to prepare an annual report of the disposal of personal property (including the full description, name of the purchaser and price received for all such property disposed of by the authority during such period).  Such Guidelines were initially approved by the Trustees at their meeting of March 28, 2006 and have been amended as deemed advisable and necessary, and reviewed and approved annually since that date, most recently on March 29, 2011.

 

DISCUSSION

 

“The Personal Property Guidelines set forth the methodology detailing the Authority’s policy regarding the use, award, monitoring and reporting of the disposal of personal property and designate a Contracting Officer responsible for the Authority’s compliance with, and enforcement of, such Guidelines.

 

“Staff has reviewed the Personal Property Guidelines and recommends no substantive changes.  Several non-substantive changes were made to the Guidelines to reflect titular or organizational changes in the Authority, as set forth in the redlined copy attached hereto as Exhibit ‘2d-A.’

 

“After being reviewed and approved annually by the Trustees, the Guidelines and corresponding Annual Report must be filed on or before the 31st day of March with the State Comptroller, the Director of the Division of the Budget, the Commissioner of General Services, the State Legislature and the Authorities Budget Office and posted on the Authority’s internet Web site.

 

FISCAL INFORMATION

 

“There will be no financial impact on the Authority.

 

RECOMMENDATION

 

“The Senior Vice President – Corporate Support Services and the Vice President – Procurement recommend that the Trustees approve the Guidelines and Procedures for the Disposal of Personal Property for the disposition of Authority-owned materials, tools, equipment, and vehicles with a value in excess $5,000, and the corresponding 2011 Annual Report of the Disposal of Personal Property, as set forth in Exhibits ‘2d-A’ and

‘2d-A-1,’ respectively.

 

“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 pursuant to the provisions of the Public Authorities Law, the Authority hereby reviews and approves the Guidelines and Procedures for the Disposal of Personal Property, as set forth in Exhibit “2d-A” and attached hereto; and be it further

 

RESOLVED, That pursuant to the provisions of the Public Authorities Law, the Authority hereby reviews and approves the 2011 Annual Report for the Disposal of Personal Property, as set forth in Exhibit “2d-A-1” and attached hereto; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.                    Annual Review and Approval of Guidelines and Procedures for the Disposal of Real Property, Guidelines and Procedures for the Acquisition of 
               
Real Property and Annual Report for the Disposal of Real Property 

              

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to review and approve the following, which comply with the requirements of the Public Authorities Accountability Act of 2005 (‘PAAA’) as amended by the Public Authorities Reform Act, Chapter 506 of the Laws of 2009:  (1) 2012 Guidelines and Procedures for the Disposal of Real Property (‘Real Property Disposal Guidelines’) for transfers of land or interests in land; and (2) 2012 Guidelines and Procedures for the Acquisition of Real Property (‘Real Property Acquisition Guidelines’).  The Guidelines are set forth in Exhibits ‘2e-A’ and ‘2e-B’ attached hereto.  In addition, the Trustees are also requested to review and approve the 2011 Annual Report of the Disposal of Real Property set forth in Exhibit ‘2e-C’ attached hereto.

BACKGROUND

“On January 13, 2006, the PAAA was enacted to codify model governance principles for New York State’s public authorities to further accountability and transparency.  The PAAA was subsequently amended by the Public Authorities Reform Act (Chapter 506 of the Laws of 2009) which Governor Paterson signed into law on December 11, 2009.  Among its provisions, the PAAA established rules for the disposal and acquisition of real property owned by public authorities.  In addition to requiring each authority to draft and annually review and approve guidelines consistent with the legislation, each authority must also prepare an annual report of all real property of such authority having an estimated fair market value in excess of fifteen thousand dollars that the authority acquires or disposes of during such period.  The report shall contain the price received or paid by the authority and the name of the purchaser or seller for all such property sold or bought by the authority during such period. 

DISCUSSION

“The 2012 Real Property Disposal Guidelines and the 2012 Real Property Acquisition Guidelines set forth the methodology detailing the Authority’s policy regarding the use, award, monitoring and reporting of contracts for the disposal and acquisition of real property and designate a Contracting Officer responsible for the Authority’s compliance with, and enforcement of, such Guidelines.  At their meeting of March 29, 2011, the Trustees reviewed and approved the Authority’s 2011 Guidelines and Procedures for the Disposal of Real Property (Real Property Disposal Guidelines) and the 2011 Guidelines and Procedures for the Acquisition of Real Property (Real Property Acquisitions Guidelines).  The only substantive change in the 2012 Guidelines is a title change, which reflects operational changes made within the past year. The Senior Vice President – Corporate Support Services is named as the Authority’s contracting officer in place of the Vice President – Enterprise Shared Services (a position that no longer exists).

“The Real Property Disposal Report lists the real property disposal transactions conducted during the reporting period having an estimated fair market value in excess of $15,000, including a description of the property, the purchaser’s name and the price received by the Authority, as required by New York Public Authorities Law §2800.  The Real Property Acquisition Report lists the real property acquisition transactions conducted during the reporting period having an estimated fair market value in excess of $15,000, including a description of the property, the seller’s name and the price received by the Authority, as required by New York Public Authorities Law §2800. 

“These acquisitions and dispositions were among those reviewed and approved by the Authority’s Governance Committee at their meeting of March 27, 2012.  The Trustees are now requested to review and approve the Authority’s 2012 Annual Report of the Disposal of Real Property and the Authority’s 2012 Annual Report of the Acquisition of Real Property.

 

“The 2012 Real Property Disposal Guidelines and the 2012 Real Property Acquisition Guidelines, if approved, will be posted on the Authority’s internet Web site.  On or before the 31st day of March, the Real Property Disposal Guidelines, the Real Property Acquisition Guidelines and the corresponding 2011 Annual Reports, as reviewed and approved by the Trustees, will be filed with the State Comptroller, the Director of the Budget, the Commissioner of General Services, the State Legislature and the Authorities Budget Office.  The 2011 Annual Reports will also be posted on the Authority’s internet website.

 

FISCAL INFORMATION

 

“There will be no financial impact on the Authority.

 

RECOMMENDATION

“The Senior Vice President – Corporate Support Services and the Director of Real Estate recommend that the Trustees approve the amended Guidelines and Procedures for the Disposal of Real Property, the amended Guidelines and Procedures for the Acquisition of Real Property and the 2011 Annual Report of the Disposal of Real Property as set forth in the attached Exhibits.

“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 pursuant to the provisions of the Public Authorities Accountability Act of 2005, as amended by the Public Authorities Reform Act, Chapter 506 of the Laws of 2009, the Authority hereby reviews and approves the 2012 Guidelines and Procedures for the Disposal of Real Property and the 2012 Guidelines and Procedures for the Acquisition of Real Property as set forth in Exhibits “2e-A” and “2e-B” attached hereto; and be it further

 

RESOLVED, That pursuant to the provisions of the Public Authorities Accountability Act of 2005, as amended by the Public Authorities Reform Act, Chapter 506 of the Laws of 2009, the Authority hereby reviews and approves the 2011 Annual Report for the Disposal of Real Property as set forth in Exhibit “2e-C” attached hereto; and be it further

 

RESOLVED, That Authority staff may take any and all steps necessary or convenient to implement such Guidelines; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.

 


f.                    Annual Review and Approval of Guidelines for the Investment of Funds and 2011 Annual Report on Investment of Authority Funds  

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to: (i) review and approve the attached 2011 Annual Report on Investment of Authority Funds which includes the Guidelines for the Investment of Funds (Exhibit ‘2f-A’), and (ii) amend the Authority’s Investment Guidelines to reflect an organizational change within the Authority.

 

 BACKGROUND

 

                “Section 2925 of the Public Authorities Law requires the review and approval of an annual report on investments.  Pursuant to the statute, the attached report includes Investment Guidelines that set standards for the management and control of the Authority’s investments; total investment income; a statement of fees paid for investment management services; the results of an independent audit; a detailed inventory report for each of the Authority’s investment portfolios as of December 31, 2011; and a summary of transactions with brokers, dealers and banks.  The approved annual report is filed with the State Division of the Budget, with copies to the Office of the State Comptroller, the Senate Finance Committee and the Assembly Ways and Means Committee.  The report is also available to the public upon written reasonable request. 

 

DISCUSSION

 

                “In 2011, the Authority’s investment portfolios, exclusive of the separately managed Other Post-Employment Benefits Trust Fund and Nuclear Decommissioning Trust Fund, averaged $1.19 billion with a December 31, 2011 cost of $1.292 billion and market value of $1.321 billion, representing a positive mark-to-market of $29.32 million.  At year-end, $1.21 billion in cash and investments was held in the Authority’s Operating Fund with the remainder held in construction funds and restricted funds.  The Operating Fund was created by the Authority’s General Resolution authorizing Revenue Obligations adopted on February 24, 1998.  A number of internal reserves have been established within the Operating Fund as follows (year-end balances noted in parentheses):

 

·         Debt Service Reserve ($48 million) – The Debt Service Reserve is funded monthly to ensure that sufficient amounts are available to pay debt service obligations when due.  The Authority’s scheduled principal and interest payments presently total approximately $150 - $175 million per year.

  

·         Energy Hedging/Fuel Reserve ($71 million) – This Reserve was established to have funds available for use as collateral that may be required to support the Authority’s authorized fuel and energy hedging transactions and to maintain funds to match a federal obligation to pay for the processing and final disposition of spent nuclear fuel burned by the Authority when it owned the Indian Point #3 and James A. FitzPatrick nuclear plants.  On February 3, 2009, the Trustees approved the temporary transfer of $215 million held in the Energy Hedging/Fuel Reserve for the spent fuel obligation to the State of New York (‘State’) to assist with the State’s budgetary deficits.  The temporary asset transfer was completed on February 25, 2009 and, in accordance with the terms and conditions of a Memorandum of Understanding between the State and the Authority, is due to be returned to the Authority no later than September 30, 2017.  The December 31, 2011 spent fuel obligation was $216 million.

 

·         Capital Project Reserve ($785 million) – This amount is being set aside to partially fund any major new investments in energy infrastructure by the Authority.  In order to minimize customer costs, maintain the Authority’s financial metrics and maintain ready access to the capital markets, it has been determined that the next major investment should be financed with a portion funded by debt and a portion funded by Authority cash or, in effect, its ‘equity.’  This Reserve has been established to provide this equity.  On February 3, 2009, the Trustees approved a temporary transfer of $103 million from the Capital Project Reserve to the State to assist with the State’s budgetary deficits and reaffirmed the transfer on July 28, 2009.   The temporary asset transfer was completed in September 2009, and in accordance with the terms and conditions of a Memorandum of Understanding between the State and the Authority, is due to be returned to the Authority no later than September 30, 2014.   

 

·            Operating Reserve ($301 million) – The Operating Reserve includes a reserve for working capital and emergency repairs to the Authority’s projects.  The Authority’s Trustees have established a minimum reserve amount of $175 million for this purpose and funds cannot be released for ‘any lawful corporate purpose’ (pursuant to Section 503(1)(e) of the Bond Resolution) unless this minimum reserve level is satisfied.  The December 31, 2011 Operating Reserve of $301 million reflects this $175 million minimum, plus the amount staff deems prudent to provide for uncertainties in cash flows and commitments related to certain statewide economic development programs.   

 

“In addition to the Operating Fund, as of December 31, 2011, the Authority separately held a total of $119 million from the proceeds of bond and note issuances in its Energy Services, Note Debt Reserve and Construction portfolios and in cash.  These funds are earmarked for construction projects currently under way, such as the St. Lawrence Life Extension and Modernization Project and various Energy Services initiatives.

 

“In 2011 and 2010, the Authority’s portfolios earned approximately $26 million and $30 million in investment income, respectively.  The decrease in investment earnings from 2010 is attributable to reinvesting proceeds from matured securities and investing new cash flows into lower yielding securities subject to a prolonged low interest rate environment.  In 2011, the Authority’s portfolios had an average yield of 2.20%, exceeding the Authority’s targeted performance by 15 basis points (15/100 of 1%).  Targeted performance for 2011 was the three-year rolling average yield of the two-year Treasury note with an average added spread of 113 basis points.

               

As of December 31, 2011, the portfolio was comprised of various government-sponsored agency securities (84.3%), municipal securities (8.0%), mortgages guaranteed by the U. S. government (3.7%) and certificates of deposit and repurchase agreements (4.0%).

 

Other Post-Employment Benefits Trust

 

“The Authority’s Other Post-Employment Benefits Trust (‘OPEB Trust’) was established in 2007 as authorized by the Authority’s Trustees at their December 19, 2006 meeting to provide for medical, prescription drug, life and other long-term care benefits offered by the Authority for retirees and eligible beneficiaries.  The OPEB Trust allows for investments in a diversified portfolio of assets, including domestic and international equity securities, fixed-income securities, public Real Estate Investment Trusts and a U. S. Treasury Money Market fund.  During 2007 and 2008, the Authority deposited a total of $225 million into the OPEB Trust to partially fund its actuarial accrued liability which, at December 31, 2011, is estimated to be $437 million.  On October 25, 2011, the Authority’s Trustees approved on-going annual funding of the OPEB Trust in order to strengthen the Authority’s financial position.  A contribution of $40 million was made to the OPEB Trust in November, 2011 which represents the net obligation for the years 2009 through 2011.

 

“As of December 31, 2011, the OPEB Trust’s market value was approximately $282 million, representing an annualized return of 1.44% for 2011.  The return performance was attributable to positive returns in the fixed income and real estate investment trust asset classes partially offset by negative returns in the domestic and international equity asset classes. 

 

“Investment management and advisory fees associated with the OPEB Trust Fund totaled $1,091,275 in 2011 and were paid from such Trust Fund.  These fees and the firms paid are detailed in Section III (B) of the
attached report.

 

 

Nuclear Decommissioning Trust

 

“On November 21, 2000, the Authority completed the sale of its Indian Point #3 and James A. FitzPatrick nuclear plants to two subsidiaries of Entergy Corporation pursuant to a purchase-and-sale agreement dated March 28, 2000.  In accordance with the Decommissioning Agreements, the Authority retains contractual decommissioning liability until license expiration, a change in the tax status of the fund or any early dismantlement of the plants, at which time the Authority will have the option to terminate its decommissioning responsibility and transfer the plant’s fund to the Entergy subsidiary owning the plant.  At that time, the Authority will be entitled to be paid an amount equal to the excess of the amount in the fund over the Inflation Adjusted Cost Amount (a fixed estimated decommissioning cost amount adjusted in accordance with the effect of increases and decreases in the U. S. Nuclear Regulatory Commission minimum cost-estimate amounts applicable to the plant), if any.  The Authority’s decommissioning liability is limited to the lesser of the Inflation Adjusted Cost Amount or the amount of the plant’s fund, guaranteeing that no additional cost burdens may be placed on the Authority. 

 

“As of December 31, 2011, the Nuclear Decommissioning Trust’s (‘NDT’) market value was approximately $1.09 billion, representing an annualized return of 5.79% for 2011.  The return performance was primarily attributable to positive returns in the fixed income asset class, which in accordance with the investment guidelines, has a target allocation of sixty-five percent of total assets.  The Treasury security holdings performed especially well relative to other fixed income sectors due to continued risk aversion exhibited by international and domestic investor groups.

 

“Investment management and advisory fees associated with the Nuclear Decommissioning Trust Fund totaled $1,239,747 in 2011 and were paid from such Trust Fund.  These fees and the firms paid are detailed in Section III (C) of the attached report. 

 

“In connection with its examination of the Authority’s financial statements, KPMG LLP (‘KPMG’) performed tests of the Authority’s compliance with certain provisions of the Investment Guidelines, the State Comptroller’s Investment Guidelines and Section 2925 of the Public Authorities Law.  KPMG’s report, a copy of which is attached, (Section III D, Exhibit ‘2f-B,’) states that the Authority complied, in all material respects, with the requirements during the year ended December 31, 2011.  Consequently, staff believes the Authority is in compliance with the Investment Guidelines, the State Comptroller’s Investment Guidelines and Section 2925 of the Public Authorities Law.

 

“The Investment Guidelines and procedures have not been amended since last presented to and approved by the Trustees at their meeting of March 29, 2011.  One minor edit is recommended to reflect an organizational change within the Authority.  This change, which is marked in the attached Guidelines, substitutes the Executive Vice President and Chief Financial Officer for the Senior Vice President – Corporate Planning and Finance in oversight of certain Repurchase Agreement transactions.  Other than this one change, the Guidelines remain fundamentally sound and meet the requirements of the Authority.  Furthermore, these Guidelines continue to meet the requirements of Section 2824(1)(e) of the Public Authorities Law, which requires the Authority’s Trustees to establish written policies and procedures with respect to investments.

 

RECOMMENDATION

 

                “The Treasurer recommends that the Trustees approve the attached 2011 Annual Report on Investment of Authority Funds.

 

                “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 2011 Annual Report on Investment of Authority Funds be, and hereby is, approved; and be it further

 

RESOLVED, That the Investment Guidelines be amended as follows (new language underlined; deleted language in brackets):

               

Section B.4 of Paragraph VII, Policies Concerning Certain Types of Investments Diversification Standards Required, shall be amended to read as follows:

 

4.  No more than $50 million of Authorized Investments shall be purchased under a Repurchase Agreement with any one Dealer or Bank.  This requirement may be waived by the [Senior Vice President – Corporate Planning and Finance] Executive Vice President and Chief Financial Officer on a single transaction basis only if warranted by special circumstances and documented in writing.

 

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.

 

 

g.                   Annual Review and Approval of Certain Authority Policies

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve certain Authority policies as required by Section 2824 of the Public Authorities Law and Section 2 of Article II of the Authority’s By-laws.

 

                “The Trustees are also requested to delegate to the President and Chief Executive Officer the authority to modify these policies, as necessary, except in the event that any powers, duties or obligations of the Trustees would be affected by such modification.

 

                “This item also contains several policy changes that do not require Trustee approval, but are being provided for informational purposes.

 

BACKGROUND AND DISCUSSION

 

                “Section 2824 of the Public Authorities Law requires the Authority’s Trustees to, among other things, establish policies regarding the payment of salary, compensation and reimbursements to, and establish rules for the time and attendance of, the chief executive and senior management; and Section 2 of the Authority’s By-laws requires the Authority’s Trustees to review and approve annually the policies and procedures governing: (i) the salary, (ii) compensation, (iii) benefits and (iv) time and attendance of the chief executive and senior management.

 

                “The Authority’s policies relating to salary, compensation, benefits and time and attendance of its employees, inclusive of the chief executive and all senior management, are attached as Exhibits ‘2g-A’ through ‘2g-L’ and respectively entitled:

 

        A.    Recruitment and Job Posting (EP 1.2); last revised 1/13/11;

        B.    Salary Administration Policy (EP 2.1); revisions proposed 3/27/12;

        C.    Salaried Non-Exempt and Facility-Based Exempt Overtime (EP 2.4), revisions proposed 3/27/12;

        D.    Variable Pay Plan (EP 2.6), Deleted 7/20/10;

        E.    Employee Benefits Eligibility (EP 3.1), revisions proposed 3/27/11;

        F.     Reimbursement of Employee Meal Costs (CAP 1.5), revisions proposed 3/27/12;

        G.    Attendance & Flexible Hours (EP 4.6), revisions proposed 3/27/12;

        H.    Vacation (EP 3.2), revisions proposed 3/27/12;

        I.     FMLA (EP 3.3), last revised 5/19/10;

        J.     Sick Time (EP 3.9), last revised 2/20/09;

        K.    Relocation Benefits for New and Transferred Employees (EP 3.8); last revised 1/1/10; and

        L.    Travel (CP 2-1); revisions proposed 3/27/12

 

                “The following Authority policies do not require Trustee approval, but have been modified and are being provided for informational purposes. Attached are Exhibits ‘2g-M’ through ‘2g-R’:

 

        M.   Transfer or Re-Employment in Public Service (EP 1.9);

        N.    Job Description and Evaluation (EP 2.2); Deleted

        O.    Leaves of Absence (EP 3.4);

        P.     Employee Assistance Program (EP 3.5);

        Q.    Motor Vehicle and Equipment (CP 2.8);

        R.    Restrictions on the use of Hand – Held Mobile Telephones While Operating a Motor Vehicle

                (CP 1.6);

 

RECOMMENDATION

 

                “It is recommended that the Trustees approve the Authority’s policies related to salary, compensation, benefits and time and attendance, which are applicable to all Authority employees, including the chief executive and senior management.  It is further recommended that the Trustees delegate to the President and Chief Executive Officer the authority to modify these policies, as necessary, except in the event that any powers, duties or obligations of the Trustees would be affected by such modification.

 

“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 pursuant to Section 2824 of the Public Authorities Law and Section 2 of Article II of the Authority’s By-laws, the below-listed policies of the Authority relating to salary, compensation, benefits and time and attendance of its employees, including the chief executive and senior management, are hereby approved:

 

        A.    Recruitment and Job Posting (EP 1.2); last revised 1/13/11;

        B.    Salary Administration Policy (EP 2.1); revisions proposed 3/27/12;

        C.    Salaried Non-Exempt and Facility-Based Exempt Overtime (EP 2.4), revisions proposed 3/27/12;

        D.    Variable Pay Plan (EP 2.6), Deleted 7/20/10;

        E.    Employee Benefits Eligibility (EP 3.1), revisions proposed 3/27/11;

        F.    Reimbursement of Employee Meal Costs (CAP 1.5), revisions proposed 3/27/12;

        G.    Attendance & Flexible Hours (EP 4.6), revisions proposed 3/27/12;

        H.    Vacation (EP 3.2), revisions proposed 3/27/12;

        I.     FMLA (EP 3.3), last revised 5/19/10;

        J.     Sick Time (EP 3.9), last revised 2/20/09;

        K.    Relocation Benefits for New and Transferred Employees (EP 3.8); last revised 1/1/10; and

        L.    Travel (CP 2-1); revisions proposed 3/27/12

         

AND BE IT FURTHER RESOLVED, That the President and Chief Executive Officer is authorized to modify the foregoing policies, as necessary, except in the event that any powers, duties or obligations of the Trustees would be affected by such modification; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.


h.                   Adoption of the Amended Deferred Compensation Model Plan For Employees of the Power Authority of the State of  New York (Section 457 Deferred Compensation Plan) 

                               

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to adopt and approve the attached version of the Model Section 457 Deferred Compensation Plan (‘Plan’ or ‘Model Plan’) (Exhibit ‘2h-A’), as amended and restated by the New York State Deferred Compensation Board (‘Board’) through August 26, 2011.  The Plan amendments are related to a number of regulations pertaining to administration of certain features available under Section 457 of the Internal Revenue Code, many of which are reorganizational in nature or changes required by law.  The Board has received a determination letter from the Internal Revenue Service (‘IRS’) approving the amended Model Plan, effective August 26, 2011.

 

BACKGROUND

 

“The Plan has been maintained by the Authority since 1989.  It was established primarily to provide those Authority employees covered by a collective bargaining agreement with a means of saving through a tax-deferred compensation program, as they are not eligible to participate in the 401(k) Employees’ Saving Plan.  The 457 Plan is also available to salaried employees.

 

“The Authority has maintained the Plan as a Model Plan in accordance with the procedures of and pursuant to the regulations of the Board.  During 2011, the Authority and other Model Plan Sponsors were notified that the Board amended the Model Plan to adopt the following provisions:

 

·         General Reorganization and Updating of Sections.  A primary objective of the amendments is to improve the overall readability and eliminate unnecessary numerical references (annual limits) from the Model Plan document. 

·         Employer Elections Within the Plan Document.  A number of Model Plan provisions, such as suspension of deferrals following an unforeseeable emergency withdrawal, automatic distributions from small accounts, loans, and Roth provisions are permissive.  The Model Plan document includes a Schedule A where the employer may indicate the election of one or more of these provisions.

·         Roth Designated Contributions.  The Small Business Jobs Act of 2010 authorizes plan sponsors to permit plan participants to make Roth (post-tax) contributions to a public employer sponsored deferred compensation plan.  Model Plan sponsors were given the opportunity to elect to allow participants to make both pre-tax deferrals and Roth designated contributions within the plan.  The combined maximum of pre-tax deferrals and Roth designated contributions may not exceed the limits of the plan.  The Model Plan provides that loans may only be made from pre-tax assets.

·         Roth In-Plan Conversions.  The Small Business Jobs Act of 2010 also authorizes plan sponsors to permit plan participants to convert some or all of their pre-tax assets to a Roth designated account within the plan.  Roth in-plan conversions may only occur when the participant is eligible for a distribution.  The plan must permit participants to make Roth designated contributions for a plan sponsor to elect the in-plan conversion option.

·         Roth Separate Accounting.  If the plan permits participants to make Roth designated contributions or Roth in-plan conversions, IRS regulations require that these assets be separately accounted.

“The attached summary provides greater detail related to each amendment to the Model Plan (Exhibit ‘2h-B’).  While all of these amendments may not specifically apply to Authority employees, the Authority is required to adopt all changes to the Model Plan.

“In addition, the Board promulgated optional amendments which require employer election in order for them to be included in the Plan.  A summary of the optional elections, Schedule A, is included with the Model Plan (Exhibit ‘2h-A’).  Of those optional amendments, the Deferred Compensation Plan Committee (‘Committee’) had voted in 2006 to offer Plan loans and continues to suspend participant deferrals and contributions for six months following an unforeseeable emergency hardship distribution.  In addition, during 2011 the Committee voted to offer Roth deferrals to participants in the Plan.  It did not elect the other optional elections.  The Roth feature has been made available to participants effective January 1, 2012.

 

DISCUSSION

 

“The Plan has been reviewed by staff of the Human Resources and Law Departments, as well as by the Deferred Compensation Plan Committee.  They have found that the Plan, as amended and restated and as submitted for approval, complies with the rules and regulations imposed by the Internal Revenue Code and the regulations of the Board.

 

FISCAL INFORMATION

 

“Amending and restating the Plan is a cost-neutral action.

 

RECOMMENDATION

 

“The Senior Vice President – Corporate Support Services, the Vice President – Human Resources and the Deferred Compensation Plan Committee recommend that the Trustees adopt and approve the attached amended and restated Section 457 Deferred Compensation Plan, including the amendments through August 26, 2011.

 

“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 provisions of the Deferred Compensation Plan be amended and restated in order to conform with the text of the Model Plan, Exhibit “2h-A,” including the optional provision for the Roth amendment and the suspension of deferrals and contributions following an unforeseeable emergency withdrawal , both as provided for in Schedule A (Exhibit “2h-C”); and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer,  the Chief Operating Officer, all other officers and the Deferred Compensation Plan Committee 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.

 

  

i.                     Lease of Office Space – Clarence D. Rappleyea Building – Canter Law Firm, P.C.  

                               

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

                “The Trustees are requested to authorize the execution of a lease of approximately 2,215 square feet of office space on the 9th floor of the Clarence D. Rappleyea Building (‘Rappleyea Building’), White Plains, New York by the Authority, as Landlord, to the Canter Law Firm, P.C. (‘Canter’) as Tenant.  The proposed lease is for a term of five years, six months, at an average base rent per square foot of $22.55 exclusive of the electric factor of $2.75 per square foot if Tenant does not exercise its option to install a submeter at Tenant’s cost, as more specifically described in Exhibit ‘2i-A,’ attached hereto.

 

BACKGROUND

 

                “The Authority acquired the Clarence D. Rappleyea Building by deed dated July 10, 1991.  This is a commercial office building with the majority of the existing space occupied by Authority personnel.  However, about 40% of the building is occupied by private tenants.  Canter occupies its current space on the 9th floor of the building on a sublease basis.  The term expires March 31, 2012 and Canter wishes to remain in its space and execute a direct lease with the Authority.          

 

DISCUSSION

 

                “Canter provides specialized litigation services to the business community and is affiliated with the tenant SKCG Group on the 14th Floor of the Rappleyea Building.  Canter has requested that the Authority lease to it approximately 2,215 square feet of office space on the 9th floor of the building and the Authority entered into negotiations with Canter after publicly advertising the space for lease in accordance with the Power Authorities Accountability Act.  Preliminary negotiations with Canter on this space have resulted in the basic lease terms set forth in Exhibit ‘2i-A.’  Generally, this lease will be for a term of five years and six months, at an average annual rental of approximately $49,948.  In addition, Canter will pay an additional $2.75 per square foot for electric if Tenant elects not to exercise its submetering option.  A review of the local market conditions indicate that this transaction compares favorably with other space being offered in downtown White Plains. 

 

FISCAL INFORMATION

 

                “Payment for standard brokerage commissions, tenant improvements and architectural and engineering fees as set forth in Exhibit ‘2i-A’ will be made from the Operating Fund.

 

RECOMMENDATION

 

                “The Senior Vice President – Corporate Support Services, the Director – Corporate Support Services and the Director – Real Estate recommend that the Trustees approve entering into a lease with the Canter Law Firm, P.C. for office space in the Clarence D. Rappleyea Building on terms substantially in accordance with the foregoing and with Exhibit ‘2i-A’ attached hereto.

 

“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 President and Chief Executive Officer, the Senior Vice President – Corporate Support Services or the Director – Real Estate be, and hereby is, authorized to enter into a Lease Agreement between the Authority and Canter Law Firm, P.C., on substantially the terms set forth in the foregoing report of the President and Chief Executive Officer and subject to the approval of the documents by the Executive Vice President and General Counsel, or her designee; and be it further

 

RESOLVED, That the Senior Vice President – Corporate Support Services or the Director – Real Estate be, and hereby is, authorized on behalf of the Authority to execute any and all other agreements, papers or instruments that may be deemed necessary or desirable to carry out the foregoing, subject to the approval 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 Acting 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.


j.                     Lease of Warehouse Space – Niagara Power Project – DRC Development, LLC 

                                                                    

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize the execution of a lease with DRC Development, LLC (Landlord) for off-site warehouse space (‘off-site warehouse’) located at 6420 Inducon Drive, Wheatfield, New York.  This warehouse will be used in support of the Life Extension and Modernization (‘LEM’) Program for the Lewiston Pump Generating Plant (‘LPGP’).  The proposed lease would be for a term of eight years commencing July 1, 2012 and terminating on June 30, 2020 for a leased space of 15,000 square feet.  The average base rental per square foot is $7.25 ($108,750 per annum) and on terms as more particularly set out in Exhibit ‘2j-A,’ attached hereto.

 

 BACKGROUND

 

                “At their meeting of June 29, 2010, the Trustees approved a LEM program to renovate and modernize the LPGP.  The modernization will enhance plant performance in the New York Independent System Operator (‘NYISO’) market and maintain a reliable and competitive power production facility.  Staff has identified a need for off-site warehouse space to support this LEM program.

 

DISCUSSION

 

                “The off-site warehouse is required in support of the Niagara Power Project’s (‘Niagara’) LPGP LEM program.  Niagara currently does not have the physical space necessary to store the new equipment in support of this program as it is received from the manufacturers.  This equipment is being purchased in group lots in order to maintain equipment consistency over the life of the project.  The equipment to be stored in this warehouse includes: static excitation equipment, unit circuit breakers, unit control boards with relay protection, phase reversal switches, high pressure fluid filled skids, servo motors, cable and other miscellaneous items.  The electronic components installed in some of the equipment will require storage in a heat and humidity controlled environment in order to maintain the manufacturer’s warranty.  Extreme temperatures and humidity levels can cause serious damage to very costly equipment.

 

“The real estate division researched various alternatives proximate to Niagara for the location of an off-site warehouse facility and this location was chosen as the optimal site for the project’s needs.  The landlord’s improvements will include lavatory facilities, two truck docks, one overhead door at grade, full heating-ventilation-air conditioning to maintain 72°F interior temperature with 45 – 55% relative humidity and a security system, tinted windows, 6concrete floor, automatic fire sprinkler system, 480v power, 400 amps and fluorescent lighting.

 

“The rental rates and other charges set out above are competitive with similar space in the Niagara Falls region.  Further, the off-site facility is located only 4.8 miles from the LPGP.

 

FISCAL INFORMATION

 

“Payment associated with this lease will be made from the Authority’s capital fund.

 

RECOMMENDATION

 

                “The Vice President – Project Management, the Director – Real Estate and the  Project Manager – Hydro/Transmission recommend that the Trustees approve entering into a lease agreement with DRC Development, LLC for warehouse space at 6420 Inducon Drive, Wheatfield, New York on terms substantially in accordance with the foregoing and with Exhibit ‘2j-A’ attached hereto.

 

“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 President and Chief Executive Officer and the Senior Vice President – Corporate Support Services be, and hereby is, authorized to enter into a lease for warehouse space at 6420 Inducon Drive with DRC Development, LLC on substantially the terms set forth in the foregoing report of the President and Chief Executive Officer and Exhibit “2j-A” and subject to the approval of the amendment of lease documents by the Executive Vice President and General Counsel; and be it further

 

RESOLVED, That the Senior Vice President – Corporate Support Services or the Director – Real Estate be, and hereby is, authorized on behalf of the Authority to execute any and all other agreements, papers or instruments that may be deemed necessary or desirable to carry out the foregoing, subject to the approval 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.

 


k.                   Procurement (Services) Contracts – Business Units and Facilities – Awards, Extensions and Additional Funding

                               

                               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 (services) contracts listed in Exhibit ‘2k-A,’ as well as the continuation and funding of the procurement (services) contracts listed in Exhibit ‘2k-B,’ in support of projects and programs for the Authority’s Business Units/Departments and Facilities.  Detailed explanations of the recommended awards and extensions, 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, or the reasons for extension, the additional funding required and the projected expiration dates, 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

Awards

“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 $95,000 to $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.

Extensions

“Although the firms identified in Exhibit ‘2k-B’ have provided effective services, the issues or projects requiring these services have not been resolved or completed and the need exists for continuing these contracts.  The Trustees’ approval is required because the terms of these contracts will exceed one year including the extension, the term of extension of these contracts will exceed one year and/or because the cumulative change-order limits will exceed the levels authorized by the EAPs in forthcoming change orders. The subject contracts contain provisions allowing the Authority to terminate the services at the Authority’s convenience, without liability other than paying for acceptable services rendered to the effective date of termination.  These contract extensions do not obligate the Authority to a specific level of personnel resources or expenditures.

“Extension of the contracts identified in Exhibit ‘2k-B’ is requested for one or more of the following reasons:  (1) additional time is required to complete the current contractual work scope or additional services related to the original work scope; (2) to accommodate an Authority or external regulatory agency schedule change that has delayed, reprioritized or otherwise suspended required services; (3) the original consultant is uniquely qualified to perform services and/or continue its presence and rebidding would not be practical or (4) the contractor provides a proprietary technology or specialized equipment, at reasonable negotiated rates, that the Authority needs to continue until a permanent system is put in place.

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

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

Corporate Support Services (‘CSS’)

Human Resources

“The contract with Corporate Counseling Associates, Inc. (‘CCA, Inc.’) (Q11-5153; PO# TBA) would provide for Employee Assistance Program (‘EAP’) services and work-life services to all Authority employees, retirees and their families (‘eligible participants’).  Such EAP services include a comprehensive off-site referral program designed to provide confidential assessment and short-term counseling to eligible participants or referral for appropriate treatment, when necessary, in order to assist them in dealing with emotional, family and care-giving problems, challenges of daily life, workplace conflict issues and other related matters, and assisting employees with problems so they can perform their jobs in a professional manner.  The program is twofold, comprising: (1) core services, including preventive, management, crisis intervention and on-site critical incident services and (2) support services, including supervisory training sessions, educational/promotional materials, websites, fitness-for-duty evaluations, activity reports and health fairs.  Since the existing contract is expiring and the need for such services is ongoing, bid documents were developed by staff and a total of twenty firms downloaded them electronically from the Authority’s Procurement website and/or were invited to bid, including those that may have responded to a notice in the New York State Contract Reporter; four proposals were received and evaluated.  The highest-priced bidder was eliminated from further consideration and the remaining three proposals were evaluated in greater detail based on criteria that included each firm’s experience / provider network, toll-free hotline, short-term counseling, training, management support, work-life services / promotional materials, utilization reports and costs.  Although all three firms provide many of the same services at similar evaluated costs, there are important differences among them, as further set forth in the Award Recommendation documents.  The immediate access to a counselor and the eight counseling sessions (resulting in no out-of-pocket costs for employees or the Authority) make CCA stand out by comparison.  In addition, CCA has provided excellent services and support to the Authority under the existing contract for such services and has demonstrated the ability to help the Authority control health care costs, while assuring that employees receive the most appropriate and highest quality of care.  Based on the foregoing reasons, as well as the projected potential savings to the Authority in lower medical plan claims costs, staff recommends the award of a new contract to CCA, the lowest-priced evaluated bidder, which is also the most qualified and offers the most services.  Such contract would become effective on or about April 1, 2012 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, $205,640.

“The contracts with CareerBuilder Government Solutions LLC (‘CareerBuilder’), Industrial Staffing Services, Inc. (‘ISSI’), K.G. Industries, Inc. (‘KGI’), KMQ Enterprises, Inc. dba Tailwind Associates (‘Tailwind’), Randstad Professionals US, LP dba Randstad Engineering (‘Randstad’) and Recourse Communications, Inc. (‘RCI’) (Q11-5144; PO#s TBA) would provide for recruitment services primarily for technical positions in the engineering and IT disciplines, to assist Authority staff in filling such positions on an ‘as needed’ basis.  Services include:  in-depth conference with the hiring manager and employment specialist to ensure a full understanding of the position, department / work environment, organizational culture, mission, salary requirements and selection / screening criteria; development of sourcing document and search strategy; detailed telephone screening of candidates to determine job, organizational and geographical fit; and presentation of employment package that may include interview reports, verification of references, professional achievements, licenses and certifications.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 72 firms, including those that may have responded to a notice in the New York State Contract Reporter; 13 proposals were received and evaluated.  Based on each bidder’s experience and specialization in providing recruitment services for both engineering and IT positions in the energy and utility industry, as well as their respective competitive rates, as further set forth in the Award Recommendation documents, staff recommends the award of contracts to six firms:  CareerBuilder, ISSI, KGI, Tailwind, Randstad and RCI.  Such competition is expected to benefit the Authority by providing a variety of qualified talent at competitive rates.  It should be noted that these contract awards would not obligate the Authority to a specific level of personnel resources or expenditures.  The contracts would become effective on or about April 1, 2012 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $1 million.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  It should also be noted that ISSI is a New York State-certified Minority/Woman-owned Business Enterprise (‘M/WBE’).

 

MED Energy Efficiency Resources & Technology Services

Energy Services

 

“The contracts with Solar Electric Systems, Inc. (‘Solar Electric’) and Solar Liberty Energy Systems, Inc. (‘Solar Liberty’) (Q11-5157; PO# TBA) would provide for the furnishing, delivery and installation (including design, construction and start-up services) of roof-mounted solar photovoltaic (‘PV’) systems of various sizes and types, at various sites within six designated geographic regions of New York State, in connection with the Authority’s Energy Services Programs (‘ESP’) and Renewable Energy Plan (‘REP’).  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 96 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Sixteen proposals were received and evaluated.  The four firms that submitted the most cost-competitive bids were shortlisted for an in-depth evaluation of their respective proposals, qualifications and costs, as further set forth in the Award Recommendation documents.  Based on the foregoing, staff recommends the award of contracts to two firms, Solar Electric (for the New York City region, including Westchester County) and Solar Liberty (for all six regions), as  the lowest-priced, technically qualified bidders that meet the bid requirements.  Both firms have relevant experience with such projects and one of these two firms has successfully implemented a variety of solar PV projects under an existing contract for such work.  The new contracts would become effective on or about April 1, 2012 for an intended term of up to five years, subject to the Trustees’ approval, which is hereby requested.  Each solar PV project is subject to a site installation agreement between the Authority and the selected site.  The Authority will be responsible for overall project implementation.  Upon installation, the site will assume ownership of the solar PV system.  Approval is also requested for the aggregate total amount expected to be expended for the term of the contracts, $5 million.  Funds will be allocated as specific project sites are identified.  Total commitments and expenditures for the contracts will also be tracked against the approved aggregate total.  Such contracts will be closely monitored for utilization levels, available approved funding and combined total expenditures.  It should be noted that all costs in connection with ESP projects will be recovered by the Authority.

Marketing Analysis & Administration – Power Contracts

“The contract with Nexant, Inc. (Q11-5159; PO# TBA) would provide for consulting services to review, analyze and support the Authority with respect to delivery service rate filings made by New York Investor-Owned Utilities (‘IOUs’) or other entities that have an impact on the delivered price of Authority power sales.  Services would also include assistance with related settlement proceedings and other rate matters before the New York State Public Service Commission, Federal Energy Regulatory Commission or within the New York Independent System Operator stakeholder process, as may be required.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 44 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 Nexant, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has demonstrated a high level of technical competence and professionalism under an existing contract for related work.  The contract would become effective on or about April 1, 2012 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, $2 million.

Power Supply

 

“The contract with Able Testing & Inspection, Inc. (‘Able Testing’) (Q11-5136; PO# TBA) would provide for Non-Destructive Examination (‘NDE’), on-site welding inspection and welder qualification services at the Blenheim-Gilboa Power Project, the Authority’s small hydroelectric facilities in the Central Region and at vendors’ facilities, on an ‘as needed’ basis and in accordance with all applicable standards and technical specifications.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 21 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 Able Testing, the lower-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under a prior contract for such work.  The new contract would become effective on or about April 1, 2012 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, $95,000.

 

“Due to the need to commence services and based on interim approval authorized in accordance with the Authority’s Guidelines for Procurement Contracts and EAPs, the contract with Applied Ecological Services, Inc. (‘AES’) (Q11-5149; 4500214241) became effective March 1, 2012, subject to subsequent ratification and approval by the Trustees as soon as practicable.  The subject contract provides for the cultivation and installation of native wetland and upland plantings along the shoreline and in upland areas of Motor Island in the upper Niagara River, as part of the Motor Island Shoreline Restoration Habitat Improvement Project (‘HIP’) and in fulfillment of Authority commitments under the Niagara Power Project New License and Settlement Agreements.  The subject HIP will stabilize eroding shoreline and will improve the habitat and access for fish and wildlife at Motor Island, a wildlife conservation area owned and operated by the New York State Department of Environmental Conservation.  The work will be performed under separate contracts for shoreline excavation and planting.  To that end, bid documents for the planting phase were developed by staff and were downloaded electronically from the Authority’s Procurement website by 74 firms, including those that may have responded to a notice in the New York State Contract Reporter; four proposals were received and evaluated.  Staff recommends award of a contract to AES, the lowest-priced bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under a prior contract for similar work.  AES demonstrated a clear understanding of the work scope and schedule, including time constraints due to wildlife sensitivities; the firm’s and personnel’s experience with wetland restoration projects in similar environments; qualifications of subcontracted plant supplier/s and the need for close coordination with the excavation contractor.  The intended term of the contract is approximately three years (through December 31, 2014), 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, $497,632.

“The contract with CME Associates, Inc. (‘CME’) (Q11-5139; PO# TBA) would provide for concrete and soil testing services at the Blenheim-Gilboa Power Project and the Authority’s small hydroelectric facilities in the Central Region, on an ‘as needed’ basis and in accordance with all applicable standards and technical specifications.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 54 firms, including those that may have responded to a notice in the New York State Contract Reporter.  Seven proposals were received and evaluated, as further set forth in the Award Recommendation documents.  Based on the foregoing, staff recommends award of a contract to CME, the lowest-priced evaluated bidder, which is qualified to perform such services, meets the bid requirements and has provided satisfactory service under a prior contract for such work.  The new contract would become effective on or about April 1, 2012 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, $95,000.

“The contract with Fusion Babbitting Co., Inc. (‘Fusion’) (S12-01 / 6000129170; PO# TBA) would provide for the rebabbitting of six sets of hydroelectric turbine thrust bearing shoes for the St. Lawrence / FDR Power Project.  Services include, but are not limited to, conducting inspections, developing applicable procedures, removing the babbitts, performing tinning and rebabbitting of thrust shoes, QA/QC measurements and reporting, as well as transportation to and from the vendor’s facility (inclusive of all packing and protection during shipment).  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 21 firms, including those that may have responded to a notice in the New York State Contract Reporter; four proposals were received and evaluated.  Staff recommends award of a contract to Fusion, the lowest-priced bidder, which is qualified to perform such services and meets the bid requirements.  The contract would become effective on or about April 1, 2012 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, $215,000.

“The contract with Premier Utility Services, LLC (‘Premier’) (Q11-5113-1; PO# TBA) would provide for locating and mark-out services for underground utilities (e.g., electrical, water, sewer, gas, fuels, communications, steam, etc.) at Authority-owned or operated facilities or property throughout New York State, on an ‘as needed’ basis and in compliance with statutory requirements.  Services include, but are not limited to, serving as the 24/7 contact and responder to all such calls or dig requests and providing trained and qualified utility locators or inspectors and all necessary equipment and materials to accurately identify / locate / inspect such underground utilities, as needed;  site visits to mark or clear the property for excavation using supplied maps and records; office screening and resolution of calls, requiring no dispatch to the field;  emergency response to after-hour requests; and private utility locating, where technicians provide utility locating services for all tone able utilities on Authority property, as may be requested.  Bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by eighty (80) firms, including those that may have responded to a notice in the New York State Contract Reporter.  Due to an inadequate bid response, the bid documents were reissued and three proposals were received and evaluated.  A Post-Bid Addendum was subsequently issued to provide additional clarification and request pricing for a typical scenario.  An analysis of the responses determined that the apparent low bidder did not fully meet the bid requirements and was not fully responsive.  Staff therefore recommends award of a contract to Premier, the lowest-priced bidder, which was fully responsive, demonstrated an understanding of the scope of work, was qualified to perform such services, fully met the bid requirements and has provided satisfactory service under an existing contract for such work in the SENY region.  The new contract would become effective on or about April 1, 2012 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, $470,000.

“Blueback herring has been identified by the U.S. Fish and Wildlife Service, the New York State Department of Environmental Conservation and the Federal Energy Regulatory Commission (‘FERC’) as the key fish species requiring downstream passage protection at the Crescent and Vischer Ferry Projects.  Pursuant to FERC’s orders of November 1997 and March 2001, the Authority was mandated to install and test acoustic fish deterrent systems at the two Projects to determine if fish (particularly blueback herring) could be effectively diverted to bypasses that would provide safe passage around the Projects.  The contract with Ultra Electronics Ocean Systems, Inc. (‘Ultra Electronics’) (Q12-5147; PO# TBA) would provide for the continuation of such work, including the installation, operation and maintenance of acoustic fish deterrent systems at the Crescent and Vischer Ferry Projects.  To that end, bid documents were developed by staff and were downloaded electronically from the Authority’s Procurement website by 17 firms, including those that may have responded to a notice in the New York State Contract Reporter; one proposal was received and evaluated.  Reasons for the lack of other proposals include, but are not limited to, not their scope of work, unable to submit a competitive bid or downloaded the documents for information purposes only.  The acoustic fish deterrent systems are based on proprietary transducer technology designed by Ultra Electronics.  Such equipment, previously purchased by the Authority from Ultra Electronics, requires compatible electronics and computer software to operate within the design parameters.  Given the proprietary nature of the transducers, Ultra Electronics is uniquely qualified to operate and maintain such equipment / systems.  Staff therefore recommends award of a contract to Ultra Electronics, which 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 April 1, 2012 for an intended term of up to five years (to be released in one-year increments for cost control), 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, $667,518.

Contract Extensions and Additional Funding:

Power Supply

Engineering

“The contract with KEMA Inc. (4500209118) provides for cyber security vulnerability assessment services of the Authority’s critical cyber assets, as required by NERC CIP standards and regulatory requirements.  The original award, which was competitively bid, became effective on October 19, 2011 for an initial term of less than one year, in the amount of $61,160.  Due to time constraints and the need to complete the requisite initial services by December 31, 2011, the contract was awarded for the base bid work, which was successfully completed by the prescribed compliance deadline.  The Request for Quotation (‘RFQ’) included two options in addition to the base bid: 1) to conduct two additional annual follow-up assessments to meet NERC CIP regulatory requirements and 2) to perform more rigorous vulnerability penetration testing / assessment against the Authority’s real-time control system (SCADA and/or EMS) test-beds over a two-year period.  Based on KEMA’s satisfactory performance and successful completion of the base bid work, staff recommends an extension of the subject contract for approximately two years to exercise the aforementioned options and provide for the continuation of such services as anticipated in the original RFQ, in order to comply with NERC CIP standards and regulatory requirements.  The current contract amount is $61,160; staff anticipates that additional funding in the amount of $165,000 may be required for the extended term.  The Trustees are requested to approve an extension of the subject contract through December 31, 2013, as well as the additional funding requested.

Project Management / Transmission

“At their meeting of September 28, 2010, the Trustees approved the award of a contract to Quanta Technology, LLC (‘Quanta’) (4500194644) to perform a condition assessment of the Authority’s existing Transmission System equipment and assets, in connection with the Life Extension and Modernization Program.  The subject contract, which was competitively bid, became effective on September 29, 2010 for an intended term of less than one year, in the approved amount of $2,047,733.  The original scope of work was comprised of performing a condition and life assessment study, risk of failure study and cost benefit analysis for nine transmission projects, including developing a preliminary implementation schedule for mitigating concerns and cost estimates for each task.  Due to budget constraints, Quanta was notified to stop work on all such projects in December 2010.  In order to address regulatory requirements mandated by the North American Electric Reliability Corporation (‘NERC’), Quanta was subsequently notified to re-start activities relating to the Clearance Remediation project included in the original work scope.  Available contract funding was used to offset the additional cost of evaluating all 1,400 miles of transmission lines, in compliance with the NERC-mandated requirements, and an additional $135,495 was authorized in accordance with the EAPs.  At their meeting of September 27, 2011, the Trustees approved a six-month extension in order to complete the Clearance Remediation project, with no additional funding requested.  Additional data gathering and engineering analyses pertaining to the base work scope have subsequently identified opportunities that will ultimately yield significant savings to the Authority in construction costs.  Due to the considerable amount of time needed to fully review, analyze, update and incorporate such results into the study, the project was not completed within the previously anticipated timeframe.  An additional six-month extension is now requested to complete the study associated with the Clearance Remediation project and to provide ongoing support as the Authority continues to develop its remediation strategy and submits filings with the NYISO and other regulatory agencies, as needed.  The current contract amount is $2,183,228; staff estimates that additional funding in the not-to-exceed amount of $150,000 may be required for the extended contract term.  The Trustees are therefore requested to approve an extension of the subject contract through September 30, 2012, as well as the additional funding requested, thereby increasing the total approved contract amount to $2,333,228.

FISCAL INFORMATION

“Funds required to support contract services for various Business Units/Departments and Facilities have been included in the 2012 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.  Payment for certain contracts in support of Energy Services Programs will be made from the Energy Conservation Effectuation and Construction Fund.

RECOMMENDATION

“The Deputy General Counsel, the Senior Vice President – Power Supply Support Services, the Senior Vice President – Transmission, the Vice President – Energy Services, the Vice President – Project Management, the Vice President – Engineering, the Vice President – Environment, Health and Safety, the Vice President – Procurement, the Vice President – Project Management, Licensing and Compliance, the Vice President – Human Resources, the Director – Marketing Analysis and Administration, the Director – Asset and Maintenance Management, the Regional Manager – Northern New York, the Regional Manager – Central New York, the Regional Manager – Western New York, the Regional Manager – Southeastern New York and the General Manager – Clark Energy Center recommend that the Trustees approve the award of multiyear procurement (services) contracts to the companies listed in Exhibit ‘2k-A’ and the extension and additional funding of the procurement (services) contracts listed in Exhibit ‘2k-B,’ for the purposes and in the amounts discussed within the item and/or listed in the respective exhibits.

“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 pursuant to the Guidelines for Procurement Contracts adopted by the Authority, the award and funding of the multiyear procurement services and other contracts set forth in Exhibit “2k-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 pursuant to the Guidelines for Procurement Contracts adopted by the Authority, the contracts listed in Exhibit “2k-B,” attached hereto, are hereby approved and extended 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 Acting 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.


l.                     Niagara Power Project – Lewiston Pump Generating Plant Life Extension and Modernization Program – Isolated Phase Bus and Phase Reversal Switch – Contract Award 

 

                                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a seven-year contract to Ferguson Electric of Buffalo, New York (‘Ferguson’), in the amount of $1,591,600 for the procurement and installation of the Isolated Phase Bus (‘IPB’) and Phase Reversal Switch (‘PRS’) and associated items, as part of the Life Extension and Modernization (‘LEM’) Program at the Lewiston Pump Generating Plant (‘LPGP’).  

 

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.

                “At their June 29, 2010 meeting, the Trustees approved the LPGP LEM Program at the estimated cost of $460 million and authorized capital expenditures in the amount of $131 million.  This requested contract award is a part of the previous capital expenditure authorization.  As a result of the LPGP modernization, an increase in pump efficiency will be realized and certain sections of the IPB will require an increase in capacity rating to support the pumping capacity increase.  In addition, the plant’s aging PRSs are at the end of their useful life and are becoming increasingly difficult to maintain.  The PRSs accommodate the operation of the unit in either the pump or generation mode.  These PRSs typically operate twice per day and have been in service for approximately 50 years.

 

DISCUSSION

 

“The scope-of-work under the proposed Ferguson contract includes the design, manufacturing, delivery and installation of IPB and PRSs which are scheduled to be delivered prior to the third feeder outage in October 2012.  The installation of the IPB and PRSs will take place during the LPGP LEM Program.

 

                “The Authority issued an advertisement to procure bids in the New York State Contract Reporter and bid packages were available as of September 30, 2011.  On November 14, 2011 proposals were received from four bidders.  The proposal prices are noted below: 

 

                                Bidder                                                   Location                               Lump Sum

 

                                Ferguson Electric                                 Buffalo, NY                          $1,591,600

                                Crown Electric                                     Middletown, OH                   $2,150,439

                                The Calvert Company                       Richland, MS                       $2,515,359

                                Eaton Corporation                              E. Syracuse, NY                   $3,227,667

                   

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

 

                “Ferguson Electric submitted the lowest-cost proposal and was evaluated as technically acceptable.  Ferguson, which has extensive experience in electrical construction and projects of this magnitude and demonstrated knowledge of the scope-of-work, is capable of completing this project in a timely manner.  Ferguson has performed satisfactory work at LPGP to reconnect the existing IPB to the generator step-up transformers.   

 

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 Vice President – Project Management, the Vice President – Engineering, the Vice President – Procurement, the Project Manager and the Regional Manager – Western New York recommend that the Trustees approve the award of a multi-year contract to Ferguson Electric of Buffalo, New York, in the amount of $1,591,600.

 

“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 pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a seven-year contract to Ferguson Electric of Buffalo, New York, in the amount of $1,591,600, for the procurement and installation of the isolated phase bus and phase reversal switches as part of the Life Extension and Modernization program to renovate and modernize the Lewiston Pump Generating Plant, as recommended in the foregoing report of the President and Chief Executive Officer;

 

                                                Contractor                           Contract Approval

                                               

                                                Ferguson Electric                      $1,591,600

                                                Buffalo, NY                                        

 

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.

 

 

m.                 New York Power Authority’s Annual Strategic Plan 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are presented with the Authority’s proposed 2012 Strategic Plan, set forth in Exhibit ‘2m-A’ attached hereto, and are requested to adopt the Strategic Plan and authorize the filing of the mission statement and performance measures with the Authorities Budget Office (‘ABO’) as required by Section 2824-a of the Public Authorities Law (‘PAL’).

                                                                                                                                             

BACKGROUND

 

                “Chapter 506 of the Laws of 2009 added a new Section 2824-a in the PAL requiring state and local public authorities to develop and adopt a mission statement.  The law also requires public authorities to develop performance measures to assist the authority in determining how well it is carrying out its mission.  Pursuant to this section, each state authority was to provide a copy of its mission statement and performance measures to the ABO on or before March 31, 2010 and to post and maintain its mission statement and performance report on its Web site.  The Authority fulfilled each of these requirements.

 

                “For subsequent reporting years, the mission statement is to be included as part of the Annual Report required to be filed with the ABO pursuant to Section 2800 of the PAL.  Every public authority is also expected to annually review its mission statement and measures and publish a measurement report.

 

                “The Authority has for many years annually reviewed and updated, as necessary, its mission statement and performance measures.  The Authority’s By-Laws (Article VII, Section 2) provide that the Trustees shall annually review a Strategic Plan and the Plan shall become the basis for the development of departmental plans, the annual budget and the capital expenditure plan.

 

DISCUSSION

 

                “In 2007, Authority staff undertook a wholesale review its annual strategic planning process wherein the content of the Strategic Plan was redesigned to make more clear the Authority’s role and intentions so that stakeholders may form a better understanding of the driving forces behind the Authority’s direction and decisions.  In addition, the strategic planning process was reformed from the prior, shorter-term tactical view to a new, longer-term strategic view of the work plan.  Additional efforts by staff provided greater linkage between the Strategic Plan and each organizational unit and employee within the Authority through the annual development of business plans for each of the major functional areas within the Authority.  The Authority’s Strategic Plan, which is presented in Exhibit ‘2m-A,’ is delineated in the following format: 

 

·        Mission Statement – A mission statement is a clear definition of the charter and underlying purpose of the organization, articulating the aims, focus, and emphasis of the organization.

·        Vision Statement – The vision statement articulates the direction(s) that the organization will pursue.  It implicitly recognizes the underlying Mission, but provides a clear statement of upcoming priorities and focus for the management team.

·        Values – Values articulate the underlying principles and aims of the business philosophy that guide the conduct, practices, and decisions toward which the organization will consistently strive.

·        Strategic Goals – Strategic goals are the specific programs that focus the organization’s resources and efforts over the horizon of the strategic plan.  Strategic goals are supported by strategic initiatives that are projects with defined objectives and a clear beginning and end.  Each business unit organization must balance the incremental effort defined by these initiatives with management of the ongoing business of the enterprise.

·        Balanced Scorecard – The balanced scorecard sets the performance goals and targets and captures the performance results by which the organization measures its success in achieving its mission.

 

                “The Mission Statement, Vision Statement and Values remain unchanged from the prior year.  The supporting business plans, which are represented in the Strategic Goals and Balanced Scorecard performance measures, cover planned work and anticipated resource requirements for the period 2012 through 2016, have been updated by each of the respective departments.  The business plans have been designed to both complement and translate the 2012 Strategic Plan goals into operational plans for each of the business units.  There is direct line-of-sight between the 2012 Strategic Plan goals and the strategic initiatives detailed in each business plan.  More importantly, the business plans are designed to describe all the responsibilities and functions carried out within each business unit, including the day-to-day baseline work, specific business unit initiatives required to improve the effectiveness or efficiency of the core business and the resources required to perform the Authority’s business activities.  By taking this holistic view, it is possible to gain a broad view of the total resource requirements – people, O&M dollars, and capital dollars – necessary to complete both the baseline work, as well as work associated with one-time initiatives.

 

                “On March 1, 2010, the ABO issued a Policy Guidance statement concerning the implementation of Chapter 506 of the Laws of 2009.  In addition to the filing of the mission statement and performance measures as part of the Annual Report filed pursuant to Section 2800 of the PAL, the ABO has requested that each authority provide responses to five questions related to matters of the mission and to certain policy issues regarding the role of the Board and the appointment and role of management.  These matters are clearly spelled out in the Authority’s By-Laws, last approved by the Trustees at their July 26, 2011 meeting.  Exhibit ‘2m-B’ attached hereto, lists the additional questions and responses that are to be filed with the mission statement and performance measures.

 

RECOMMENDATION

 

                “The Director – Strategy Management recommends that the Trustees adopt the 2012 Strategic Plan presented herein and authorize the filing of mission statement and performance measures with the Authorities Budget Office as required by Section 2824-a of the Public Authorities Law.   

 

“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 acknowledge that they have read, understand and adopt the Authority’s 2012 Strategic Plan attached hereto as Exhibit “2m-A” as discussed in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That pursuant to Section 2824-a of the Public Authorities Law, the Corporate Secretary be, and hereby is, authorized to file with the Authorities Budget Office the mission statement and performance measures contained in the Authority’s Strategic Plan and post such information on the Authority’s Web site; and be it further

 

RESOLVED, That pursuant to the Policy Guidance issued by the Authorities Budget Office on March 1, 2010, the Trustees hereby acknowledge that they have read, understand and adopt and the Corporate Secretary be, and hereby is, authorized to file with the Authorities Budget Office the responses to the additional questions posed by such Office attached hereto as Exhibit “2m-B”; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.


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, as reflected in the corporate performance matrix developed by Authority staff, which he said has been revised to align it with the Authority’s goals.  He then highlighted some of the key initiatives.

Key Issues

Energy Highway Initiative

President Quiniones said that the Authority co-chairs the Governor’s Energy Highway Task Force, the membership of which includes the Department of Environmental Conservation, Empire State Development Corporation, New York State Energy Research and Development Authority (“NYSERDA”) and the Public Service Commission.  President Quiniones continued that a summit on this energy highway project has been scheduled for April 4th at Columbia University, after which the Task Force will issue a Request for Information for potential generation and transmission projects in the state.  A conference will then be held with interested parties responding to the Request for Information.  President Quiniones ended by saying that the Task Force is required to submit an action plan to the Governor at the end of this summer.

NY-Sun Initiative

President Quiniones said that the NY-Sun initiative is part of the Governor’s agenda in terms of solar and renewable energy in the State and calls for increasing solar capacity in the State while protecting ratepayers.  He said that the Authority, along with NYSERDA, Public Service Commission (“PSC”), Long Island Power Authority (“LIPA”) and the Investor-Owned Utilities (“IOUs”), assist the Governor in that initiative and the Authority’s component of the initiative is being recommended for the Trustees’ approval at this meeting.

ReCharge New York Program 

President Quiniones said that since last November staff has reviewed more than 1,000 applications, with very extensive data, for power under the ReCharge New York program.  He said that staff has issued a Press Release stating that in April recommendations will be made to the Economic Development Allocation Board (“EDPAB”) and the NYPA Board of Trustees for initial allocations of this lower-cost power, the goal of which is to attract and retain businesses in the State and to advance the Governor’s energy and economic development policies. 

Energy Efficiency Master Plan

President Quiniones said the Governor’s energy efficiency master plan targets energy efficiency projects in state facilities, schools, colleges and universities.  He said that the Governor has requested that the Authority accelerate its efforts in this regard.  To that end, over the next four years, the Authority plans to invest approximately $500 million in energy efficiency projects with an internal rate of return (“IRR”) of 10% or better.

Strategic Plan

President Quiniones said that the Authority held a Strategic Planning Conference to discuss its key initiatives and evaluate where the Authority should be over 5 – 10 years in terms of its business model/structure and key investments.  President Quiniones said that the conference was successful and he plans to conduct meetings at the facilities and headquarters to inform employees of the findings of the conference.  The final Strategic Plan will be submitted to the Board for review in the fall.

Organizational Structure

President Quiniones said that as part of the strategic plan the Authority’s organizational structure and business processes, including succession planning issues, will be reviewed with the view to ensure that the Authority is organized efficiently and effectively.

In response to a question from Chairman Townsend, President Quiniones said that the recent legislation on the energy efficiency master plan included projects at for-profit colleges; therefore, the Authority is eligible to perform work at those facilities.

 

b.                   Report of the Chief Operating Officer

Acting Chief Operating Officer, Mr. Edward Welz, provided highlights of the report to the Trustees. 


c.                    Report of the Chief Financial Officer

 

                Acting Chief Financial Officer, Mr. Donald Russak, provided highlights of the report to the Trustees. 

 

In response to a question from Chairman Townsend, Mr. Russak said that, despite the low levels of snow, overall precipitation has been near normal over Lakes Erie and Ontario so the Authority’s budget is close to target, to date.


4.             Allocations of Expansion Power   

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve allocations of available Expansion Power (‘EP’) totaling 3,800 kilowatts (‘kW’) to Aurubis Buffalo, Inc., FMC Corporation and Nulife Glass Inc., as described herein and detailed in Exhibit ‘4-A.’  The allocations of hydropower will support capital expansion of more than $20 million and the creation of 115 jobs in Western New York.

 

BACKGROUND

 

Under §1005(13) of the Power Authority Act, as amended by Chapter 313 of the Laws of 2005, the Authority may contract to allocate 250 megawatts (‘MW’) of firm hydroelectric power as EP and up to 445 MW of Replacement Power (‘RP’) to businesses in the State located within 30 miles of the Niagara Power Project, provided that the amount of power allocated to businesses in Chautauqua County on January 1, 1987 shall continue to be allocated in such county. 

 

“Each application for an allocation of EP and RP must be evaluated under criteria that include but need not be limited to, those set forth in Public Authorities Law (‘PAL’) Section 1005(13)(a), which details general eligibility requirements.  Among the factors to be considered when evaluating a request for an allocation of hydropower are the number of jobs created as a result of the allocation; the business’ long-term commitment to the region as evidenced by the current and/or planned capital investment in the business’ facilities in the region; the ratio of the number of jobs to be created to the amount of power requested; the types of jobs created, as measured by wage and benefit levels, security and stability of employment and the type and cost of buildings, equipment and facilities to be constructed, enlarged or installed.

 

“The Authority works closely with business associations, local distribution companies and economic development entities to garner support for the projects to be recommended for allocations of Authority hydropower.  Discussions routinely occur with National Grid, Empire State Development Corporation, the Buffalo Niagara Enterprise and Niagara County Center for Economic Development and Erie County Industrial Development Agency to coordinate other economic development incentives that may help bring projects to New York State.  Staff confers with these entities to help maximize the value of hydropower to improve the economy of Western New York and the State of New York.

 

DISCUSSION

 

                “At this time, there is 16,625 kW of unallocated EP and 26,818 kW of unallocated RP that are available to be awarded to businesses under the criteria set forth in PAL Section 1005(13)(a).  Three companies have applied for hydropower as described below.

               

Aurubis Buffalo, Inc. (Project 1)

 

                Aurubis Buffalo, Inc. (‘Aurubis’) submitted an application for hydropower requesting 1,560 kW to serve a potential new project at its Buffalo facility. Aurubis currently operates a copper and brass rolling mill at this site.  The company, formerly Luvata Buffalo, Inc., has several allocations of hydropower totaling 11,560 kW.  All of the allocations are job compliant except for a 250 kW RP allocation which recently reported 2011 employment levels at 76% of its contract commitment.  The Trustees authorized a reduced job commitment for this allocation commencing July 2013 when they approved the company’s long-term contract extension at their December 2010 meeting. 

 

Aurubis announced that its plant in Sweden would be closing over the next two years. The company plans to relocate some of the production volumes currently produced in Sweden to its Buffalo site if it can secure an EP allocation.  Aurubis is owned by Aurubis Holding USA, LLC which is owned by Aurubis AG.  The company would make a total capital investment of $3.2 million to make modifications and upgrade equipment which is currently inactive, including two rolling mills that have additional casting melting furnaces capacity.  In addition, the company would transfer equipment from its facility in Sweden to Buffalo.

 

                Aurubis, which currently has a headcount of 644 employees, commits to add 30 new jobs to its payroll as a result of this project.  The job creation ratio for a recommended amount of 1,200 kW is 25 new jobs per MW.  This ratio is above the recent historic average of 17.0 new jobs per MW.  The total project investment of $3.2 million results in a capital investment ratio of $2.7 million per MW.  This ratio is below the recent historic average of $23 million per MW.

 

“An allocation of hydropower would support Aurubis’ commitment to modifications and upgrades of currently inactive equipment.  The project will help the company grow at its current location and includes two rolling mills, an additional casting melting furnace and various production equipments.  An allocation of hydropower would help incentivize the corporation to bring the production from Sweden to Buffalo rather than to competing sites in Europe.  Staff recommends an allocation of 1,200 kW be awarded to Aurubis in return for an investment of $3.2 million and creation of 30 jobs at its Buffalo facility.

               

Aurubis Buffalo, Inc. (Project 2)

 

                Aurubis Buffalo, Inc. (‘Aurubis’) submitted an application for hydropower requesting 800 kW to serve a second potential new project at its Buffalo site.  A new allocation will help the company make its case to take on a new sales initiative.  This is a government contract opportunity currently fulfilled by an out-of-state competitor.  The project would increase the company’s sales by more than 12%.  This project would give the company a long-term contractual arrangement, securing new business and adding new jobs.

 

                Aurubis, which currently has a headcount of 644 employees, commits to add 44 new jobs to its payroll as a result of this project.  The job creation ratio for a recommended amount of 600 kW is 73 new jobs per MW.  This ratio is well above the recent historic average of 17.0 new jobs per MW.  The total project investment of $1.5 million results in a capital investment ratio of $2.5 million per MW.  This ratio is below the recent historic average of $23 million per MW.

 

                “An allocation of hydropower would support Aurubis’ commitment to modifications and upgrades of equipment to its current production plant which involves rebuilding five cupping presses and upgrading supporting equipment.  Staff recommends an allocation of 600 kW be awarded to Aurubis in return for an investment of $1.5 million and creation of 44 jobs at its Buffalo facility.  

 

                Aurubis is vying to bring potential, unrelated expansion projects to Buffalo.  If both move forward, the company would invest $4.7 million and add 74 new high-quality jobs to its existing workforce.

 

                FMC Corporation

 

                “FMC Corporation (‘FMC’) submitted an application for hydropower requesting 2,000 kW to serve a proposed production equipment expansion within its existing Tonawanda facility.  FMC, a publicly traded chemical manufacturing company, produces a diversified array of chemicals used in agricultural, industrial and consumer product markets.  The company produces persulfates at its Western New York plant, chemicals that are strong oxidizers that have a wide variety of uses in manufacturing polymers, printed circuit boards, pulp and paper, and cosmetics.  FMC currently has three RP allocations totaling 8,750 kW, all of which are job compliant having reported employment level of 172, exceeding the contractual job commitment of 161 jobs. 

 

“In 2006, FMC received 2,500 kW of RP for a proposed expansion project and was thereby able to convince corporate management to invest in the Tonawanda facility.  The allocation included the retention of jobs at the company’s Middleport-based sister plant, a facility dependent upon the success of the Tonawanda operations.  The investment successfully solidified FMC’s manufacturing viability in New York State, growing the company’s headcount by 30 jobs or 21% as of today.

 

“The company sees a market opportunity involving ‘green’ applications for its products that would require a dramatic increase in production capability of up to 50% in Tonawanda.  The company would make a total capital investment of $12 million to purchase and install five electrolytic cells and associated equipment to expand its facility’s production capabilities.

 

“The company commits to add 16 high quality new jobs to its payroll as a result of this project.  The job creation ratio for a recommended amount of 1,500 kW is 10.7 new jobs per MW.  This ratio is below the recent historic average of 17.0 new jobs per MW.  The total project investment of $12 million results in a capital investment ratio of $8.0 million per MW.  This ratio is below the recent historic average of $23 million per MW.

 

                “FMC’s Tonawanda plant is competing for capital within its entire corporation.  Alternatives being considered to support this production growth are a competitor sourcing arrangement or an expansion of a newly acquired persulfate manufacturing facility in Germany.  Expanding the Tonawanda plant would support additional investment and growth opportunities in the future, particularly for ‘green’ product applications. An allocation of hydropower would support FMC’s commitment to Western New York, enabling the creation of 16 jobs and solidifying the 172 existing high quality jobs at its Buffalo and Middleport facilities.  Staff recommends an allocation of 1,500 kW be awarded to FMC in return for an investment of $12.0 million and the creation of 16 jobs.

 

Nulife Glass Inc.

 

                Nulife Glass Inc. (‘Nulife’) submitted an application for hydropower requesting 600 kW to serve a new western New York recycling plant.  The company is currently working with the Buffalo Niagara Enterprise to identify a suitable location in Dunkirk, NY or within the 30-mile EP allocation zone.  Nulife is a recycler of glass from cathode ray tubes (‘CRTs’).   The company would make a total capital investment of $3.75 million to purchase and refurbish a building in Western New York.  In addition, the company would install a glass melting furnace, dust control systems, mixing plant, controls system, screens, basic handling equipment and associated processing equipment.

 

                Nulife was established in the United Kingdom (‘UK’) in 2001 following several years of research to identify and develop a method for recycling the glass from waste CRT.  For the past ten years this technology has been perfected and the company now operates a commercial-scale CRT recycling facility in the UK and is looking to expand its business to install a similar CRT recycling plant in the United States.

 

                Nulife commits to 25 new jobs.  The job creation ratio for a recommended amount of 500 kW is 50 new jobs per MW.  This ratio is well above the recent historic average of 17.0 new jobs per MW.  The total project investment of $3.75 million results in a capital investment ratio of $7.50 million per MW.  This ratio is below the recent historic average of $23 million per MW.

 

                An allocation of hydropower would support Nulife’s commitment to creating 25 new jobs.  Staff recommends an allocation of 500 kW be awarded to Nulife Glass in return for an investment of $3.75 million and creation of 25 new jobs in Western New York.

 

                “Regarding contracts for the sale of the recommended allocations, through June 30, 2013, the EP allocations for Aurubis and FMC would be delivered by National Grid under the Authority and National Grid’s existing EP sale-for-resale agreement.  Standard three-party allocation agreements between the customer, the Authority and National Grid, as offered to all EP resale customers located in the National Grid service territory, effectuate the sale and delivery of the EP allocations to the customers until that time.  If Nulife locates in the National Grid service territory, the company will also receive its allocation via the standard three-party agreement through June 30, 2013. 

 

                “In all cases of Authority hydropower, the allocation amounts are subject to enforceable employment and usage commitments.  The standard contract includes annual job reporting requirements and a job compliance threshold of 90%.  Should the customer’s actual jobs reported fall below the compliance threshold, the Authority has the right to reduce the allocation on a pro-rata basis.  For July 1, 2013 and beyond, the allocations will be sold to the customers under a direct sale arrangement, the contract for which may be brought before the Trustees for approval at that time.

 


SUMMARY

 

                “Staff recommends EP allocations totaling 3,800 kW be awarded to Aurubis, FMC and Nulife for a total of $20.45 million capital expansion and the creation of 115 new jobs at these companies’ Western New York facilities.  This recommendation is described in Exhibit ‘4-A’ showing, among other things, the amount of power requested by the applicant, the recommended allocation amounts and the applicant’s commitment to job creation and capital investment.  Additional information on the projects is contained in the application summaries attached as Exhibits ‘4-A-1 – ‘4-A-4.’

 

RECOMMENDATION

 

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the allocations of hydropower totaling 3,800 kW to Aurubis Buffalo, Inc., FMC Corporation and Nulife Glass Inc. as detailed in Exhibit ‘4-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.”

 

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

 

RESOLVED, That allocations totaling 3,800 kW of Expansion Power to three companies, as detailed in Exhibit “4-A,” be, and hereby are, approved on the

terms 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 Acting 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.                   Municipal and Rural Electric Cooperative Economic Development Program – Allocation to Delaware County Electric Cooperative

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve an allocation of 2,300 kW of hydropower under the Municipal and Rural Electric Cooperative Economic Development Program (‘Program’) to the Delaware County Electric Cooperative (‘DCEC’).

 

BACKGROUND

 

“The 1991 amendment to the power sales agreement between the Authority and the Municipal and Rural Electric Cooperative Systems set aside a block of 54 MW from the 752 MW of hydropower allocated to the systems for economic development in the systems’ service territories.  The total allocation was increased to 764.8 MW as a result of additional power resulting from the Niagara Project upgrade. 

 

“Power from this block can be allocated to individual systems to meet the increased electric load resulting from eligible new or expanding businesses in their service area.  Recommended allocations under the Program will now be made using guidelines that were approved by the Trustees on September 23, 2008.  Under the revised program, the first 100 kW allocated will be 100 % hydropower and any additional kW at 50% hydropower and 50% incremental power. 

 

“As of January 25, 2011 ­­­­­­­­29,835 kW has been allocated.  The DCEC has submitted an application for power under the Program for consideration by the Trustees.

 

DISCUSSION

 

“An application has been submitted by DCEC to the Authority on behalf of Amphenol Aerospace Operations (‘Amphenol’).  Amphenol is a division of Amphenol Corporation, which is one of the largest manufacturers of interconnect products in the world for the military, commercial aerospace and industrial markets.  Amphenol designs, manufactures and markets cylindrical and rectangular, electronic, fiber optic, EMI/EMP filter and a variety of special applications connectors and interconnect systems.

 

Amphenol has operated from its current facility for more than 80 years under a variety of owners including Scintilla, Bendix, Allied Signal and Amphenol.  The company has been and continues to be one of the largest employers in Sidney and Delaware County with more than 750 employees as of December 31, 2011.

 

Amphenol has been severely impacted by Hurricane Irene and Tropical Storm Lee causing significant flooding that devastated its Delaware Avenue facility.  As a result of the damage to its premises and equipment, Amphenol seriously explored options to move its manufacturing operations outside New York State (‘NYS’). 

 

With the intention of having the company remain in NYS and preserving decades of industry knowledge and expertise in the region, NYS and Delaware County offered a $20 million dollar incentive package.  This package was offered to relocate Amphenol’s operations from its current facility in Sidney to a new site situated in a location that would minimize future flood impacts.  Amphenol has accepted this incentive package to aid the company in its project of securing a new and safer facility within NYS.  This project will consist of land acquisition, site improvements, the construction of a new manufacturing facility and all related costs.  Total capital investment for the expansion project is expected to exceed $35 million, with the new facility consisting of a 210,000 square-foot manufacturing space and 60,000 square-foot office space.

 

The new facility represents significant continued investment in Amphenol’s employees, capital and economic presence in the Sidney area and is truly a threshold in securing the future of Amphenol in Sidney, New York and retaining more than 700 local jobs.

 “Amphenol’s current facility is served by NYSEG; it is proposed that the new facility will be served by DCEC, which is not yet electrically connected to the future site.  The recommended allocation will, therefore, be contingent upon DCEC having an executed interconnection agreement in place prior to any Authority allocation becoming effective.

 

“It is recommended that the Trustees approve an allocation of 2300 kW of hydro power under the Municipal and Rural Electric Cooperative Economic Development Program for the DCEC on behalf of Amphenol.  The company’s remaining and expanding in Delaware County means the retention of more than 700 full time jobs making this allocation equivalent to 304 jobs per MW of hydropower.  The program guidelines require that a minimum of 50 jobs per MW of hydropower be attained.

 

“In accordance with the Authority’s marketing arrangement with the municipal and cooperative customers, the hydropower will be added to the recipient system’s contract demand at the time the project becomes operational and the additional jobs and load commitments are reached.  The hydropower earmarked for this Program is presently sold to the municipal and rural electric cooperative customers on a withdrawable basis. 

 

RECOMMENDATION

 

“The Senior Vice President – Marketing and Economic Development and the Vice President – Marketing recommends that the Trustees approve the allocation of power under the Municipal and Rural Electric Cooperative Economic Development Program to Delaware County Electric Corporation in accordance with the 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.”

 

Mr. Michael Huvane presented highlights of staff’s recommendation to the Trustees.  Trustee Dyson commented that 700 full-time jobs could be saved as a result of this allocation and Mr. Huvane added that the company is one of the major manufacturing operations in that region.  President Quiniones also added that the Empire State Development Corporation and the Governor’s office asked that the Authority assist in retaining the company in New York State as it was considering leaving the State because of the damages it incurred as a result of hurricane Irene. 
 

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

 

                RESOLVED, That the allocation of power to the Delaware County Electric Corporation under the Municipal and Rural Electric Cooperative Economic Development Program is hereby approved as 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 execute any and all documents necessary or desirable to effectuate this allocation, 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 Acting 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.

 

 

 

6.                   Agreement for the Sale of ReCharge New York Power and Energy and Service Tariff No. RNY-1

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve (1) the attached form of ‘Agreement for the Sale of Recharge New York (‘RNY’) Power and Energy (‘Customer Agreement’); and (2) the attached form of ‘Schedule of Rates for Sale of RNY Power (‘Direct Sale’) Service Tariff No. RNY-1’ (‘Service Tariff No. RNY-1’ or ‘Tariff’), for use in the RNY Power Program.  Drafts of the form of the Customer Agreement and Service Tariff No. RNY-1 are attached as Exhibit ‘6-A’ and Exhibit ‘6-B,’ respectively. 

 

BACKGROUND

 

“Chapter 60 (Part CC) of the Laws of 2011 (‘Chapter 60’) created the RNY Power Program.  The RNY Power Program makes 910 megawatts (‘MW’) of ‘Recharge New York Power’ available to ‘eligible applicants’ for the purpose of attracting new businesses and retaining and expanding existing businesses throughout the State of New York. 

 

RNY Power is comprised of: (1) fifty percent (50%) of firm hydroelectric power from the Authority’s Niagara and St. Lawrence/FDR hydroelectric projects (‘RNY Hydropower’) that was withdrawn, effective August 1, 2011, from the utility corporations that had purchased such power for the benefit of domestic and rural consumers; and (2) fifty percent (50%) of market power procured by the Authority from market or other appropriate sources (‘RNY Market Power’). 

 

“Pursuant to Chapter 60, the Authority is authorized, beginning July 1, 2012, to ‘make available, contract with and sell’ to eligible applicants such RNY Power allocations as are recommended by the Economic Development Power Allocation Board (‘EDPAB’).  RNY Power awards will consist of equal parts of RNY Hydropower and RNY Market Power.  The award is referred to in the Customer Agreement and Tariff as the ‘Awarded Allocation.’

 

“Under the RNY Power Program, ‘eligible applicants’ that receive an Awarded Allocation will have the option to elect to purchase from the Authority either: (1) the entire amount of the Awarded Allocation (i.e., the RNY Hydropower component and the RNY Market Power component); or (2) solely RNY Hydropower component (which is 50% of the amount of the total amount of the Awarded Allocation).  Customers that elect to purchase only the RNY Hydropower component may purchase the RNY Market Power component from another source (i.e., their local electric utility or an energy services company or ‘ESCO’).  If a customer elects not to purchase RNY Market Power from the Authority, the Authority will have no responsibility for supplying such Market Power to customer for the term of the allocation.  The portion of the Awarded Allocation the customer elects to purchase from the Authority is referred to in the Customer Agreement and the Tariff as the ‘Accepted Allocation.’

 

“The RNY Power the customer purchases from the Authority will be delivered by the customer’s local electric utility.  Delivery of RNY Power will be subject to local electric utility tariffs, and the utilities will bill RNY Power recipients directly for all charges related to delivery and any non-Authority power the local utility supplies, as will be provided for in delivery agreements between the Authority and the utilities.  

 

“Pursuant to Chapter 60 and by order of the New York State Public Service Commission, utilities are required to deliver RNY Power at a discount.  In essence, the discount derives from exempting RNY Power from the Renewable Portfolio Surcharge and the Systems Benefit Charge, including the Energy Efficiency Portfolio Standard surcharge.  The delivery discount will apply to a Customer’s total Awarded Allocation even if the Customer decides to purchase the RNY Market Power component of its Awarded Allocation from a non-Authority source. 

 

As discussed in more detail below, the Customer Agreement would set forth the terms and conditions that would apply to the allocation and sale of RNY Power to customers, and Service Tariff No. RNY-1 would set forth the rates as well as other terms and conditions that are applicable to the sale of RNY Power.

 

DISCUSSION

 

                “The Customer Agreement and Service Tariff No. RNY-1 have been drafted based on the provisions of Chapter 60 and following a comprehensive program administration analysis.  These documents are different from contracts and tariffs used in other Authority power programs to account for the following RNY Power Program-specific features as well as other appropriate considerations: (1) Awarded Allocations are comprised of 50% RNY Hydropower and 50% RNY Market Power; (2) the Authority will be offering two separate ‘energy products’ under the RNY Power Program, a ‘blended’ product consisting of 50% RNY Hydropower and 50% RNY Market Power  and a ‘RNY Hydropower only’ product; (3) the customer must elect the product it desires to purchase from the Authority; and (4) RNY Power will be sold through a ‘direct sale’ arrangement between the Authority and the Customer, in contrast to a ‘sale-for-resale’ arrangement that has been used in some other Authority power programs whereby the Authority sells power to local utilities which in turn resells it to the program participant.  

 

The following is a summary of some key features of the Customer Agreement:

 

·         The customer must elect the RNY product it wishes to purchase from the Authority.

 

·         A ‘blended product’ customer may later request to cancel its purchase of RNY Market Power from the Authority.  The Authority may accept or reject that request based on consideration such as potential cost impacts on the Authority and other RNY Power Program customers.

 

·         The Customer Agreement will memorialize, as part of the terms and conditions applicable to the sale of RNY Power, the employment and capital investment commitments the customer agrees to undertake, with appropriate performance standards. 

 

·         Each customer will be required to conduct an energy audit in the manner provided for in the Customer Agreement at least once during the term of its RNY Power allocation.

 

·         The Authority will function as the New York Independent System Operator (‘NYISO’) Load Serving Entity (‘LSE’) for Authority-supplied RNY Power, but not for any non-Authority power the Customer purchases from another entity.

 

·         Customer consent for the exchange of information between the Authority and the customer’s local electric that is necessary to provide for the delivery of RNY Power sold by the Authority, energy usage and billing, and program administration.

 

·         The term of individual Awarded Allocations is not expected to exceed seven (7) years.

 

·         In the event of a curtailment of hydropower produced by the Authority’s hydroelectric projects, the Authority will supply and the customer will purchase ‘Substitute Energy’ procured by the Authority from market sources.

 

                “At their October 25, 2011 meeting, the Trustees approved the proposed production rate methodology to be used to develop production monthly base rates for the RNY Power Program.  The rates presented to the Trustees at the October meeting were differentiated by the geographic zones established by the NYISO.  For the July 1, 2012 through June 30, 2013 rate year, the zones have been merged from the eleven individual NYISO zones A through K to four zonal levels comprised of zones A-E, F-I, J and K, to provide for more efficient administration of the RNY Power Program. 

 

                “Further, at the October 25, 2011 meeting the Trustees authorized staff to update the rates to account for any changed economic conditions before the July 1, 2012 start of the RNY Power Program.  The base rates as presented in proposed Service Tariff No. RNY-1 have been updated to account for the following changed market conditions: (1) market energy price forecast as of January 2012; (2) estimated capacity costs including market capacity price forecast as of January 2012; and (3) current NYISO requirements for locational capacity and reserves.

 

                “The monthly base rate for RNY ‘Hydro Customers’ (i.e., customers purchasing only the RNY Hydropower component of their award) consists of the Preservation Power Price Component, NYISO Transmission and Related Charges Component, Capacity Component (for Zones J and K only), and Distribution Losses Component.  The monthly zonal base rate for RNY ‘Blended’ Customers (i.e., customers purchasing both the RNY Hydropower and the RNY Market Power components of their award from the authority) includes the RNY Hydro Customer rate components and the following additional components: the Market Energy Component, Capacity Component (for all Zones), and Bad Debt Risk Component. 

 

                “The following is a summary of some of the key provisions of Service Tariff No. RNY-1:

 

 

 

 

·         If, as a result of reduced water flows caused by hydrologic conditions there is a curtailment of the customer’s RNY Power, the customer will be required to purchase ‘substitute power’ the Authority procures through market sources. 

 

·         The Tariff provides for a ‘periodic rate adjustment process’ or ‘PRAP’ on an annual basis or, at other times, as deemed necessary by the Authority.  The PRAP will also address an Annual Adjustment Factor process for Preservation Power rate components as well as adjustments to all other rate components based on energy market conditions and other appropriate factors.  The Authority will provide written notice less than thirty (30) days prior to implementation of the PRAP.

 

The Customer Agreement and Service Tariff No. RNY-1 will include other terms and conditions that are largely standard terms and conditions for the Authority’s power contracts and tariffs relating to such matters as prohibitions on the transfer of RNY Power allocations, metering arrangements, and modification and termination of allocations and the Customer Agreement.

 

“The proposed form of the Customer Agreement and Service Tariff No. RNY-1 may be subject to modifications before execution as RNY Power Program design is refined, formal allocations are awarded, and delivery arrangements with local utility companies are finalized.

 

“Staff will seek specific authorization to process and execute finalized Customer Agreements with eligible applicants at the time RNY Power Allocations for such applicants are authorized by the Trustees.

 

FISCAL INFORMATION

 

                “The proposed RNY rates will result in increased hydropower revenues for the Authority when compared to the previously accrued hydropower revenues from the domestic and rural customers.  Adoption of the proposed Customer Agreement and Service Tariff No. RNY-1 establishes full cost recovery and revenue neutrality to the Authority for providing RNY Market Power and provides for full recovery of all NYISO charges incurred.

 

RECOMMENDATION

 

                “The Senior Vice President – Marketing and Economic Development and the Director – Marketing Analysis and Administration recommend that the Trustees approve the form of the proposed Customer Agreement and Service Tariff No. RNY-1.

 

                “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.”

 

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

Chairman Townsend said he wanted to thank Ms. Judith McCarthy and the legal staff for the work they did in completing the ReCharge New York contracts.  He also thanked the Governor for his input in implementing 7-year contracts, a significant accomplishment for economic development in the state, and Authority staff for the work they did in reviewing the applications for the program; he looks forward to approving the allocations in April.

                In response to a question from Trustee Mark O’Luck, Mr. Lupo said that the power for the ReCharge New York program is hydropower that is being remarketed under the Authority’s Preservation Power rate, hence the increase in revenues for the Authority.  Mr. Russak added that, as part of the ReCharge New York legislation, the Authority funds the residential discounts program; the increase in revenues is expected to be approximately the same amount as the funding for the residential discounts over the long-term and therefore balances out.  Responding to a question from Trustee Nicandri, Mr. Russak said that ReCharge New York rates will have no effect on the cost-of-service for the Authority’s hydropower plants.

In response to a question from Trustee O’Luck, Mr. Lupo said that the rates will be implemented as soon as allocations are approved and contracts executed.
 

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

 

RESOLVED, That the Trustees hereby approve the proposed form of: (1) the “Agreement for the Sale of Recharge New York Power and Energy” (“Customer Agreement”); and (2) the “Schedule of Rates for Sale of Recharge New York Power (Direct Sale) Service Tariff No. RNY-1” (“Service Tariff No. RNY-1”); and be it further

 

RESOLVED, That the President and Chief Executive Officer or his designee be, and hereby is, authorized, subject to approval of the form thereof by the Chief Operating Officer and the Executive Vice President and General Counsel, to do such other things as may be necessary or desirable to finalize the form of the Customer Agreement and Service Tariff No. RNY-1 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 Acting 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 as may be necessary or desirable to finalize the form of the Customer Agreement and Service Tariff No. RNY-1, 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.                   Power Contract with the Town of Massena – Massena Electric Department  

                 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize a public hearing, pursuant to Public Authorities Law (‘PAL’) §1009, on a contract (‘Power Contract’) for the sale of up to 20 megawatts (‘MW’) of hydropower to the Town of Massena, Massena Electric Department (‘MED’) to support economic development in the St. Lawrence County area.  Drafts of the form Power Contract and the form Service Tariff SC-1 that would be incorporated into the Power Contract, are attached as Exhibit ‘7-A’ and Exhibit ‘7-B,’ respectively. 

 

BACKGROUND

 

                “As part of the St. Lawrence/FDR Project (‘Project’) relicensing, the Power Authority successfully negotiated a return of hydroelectric power that, under the prior license, had been sold to neighboring states.  Since the conclusion of the Project relicensing, the Authority has supported the use of a portion of this ‘recaptured’ power to support economic development in the St. Lawrence County area.

 

                “A previous contract, which would have provided for, not only the sale of Project power, but also the provision of funds for economic development purposes generated from the market sale of a portion of such power (the ‘Proposed 2010 Contract’), was disapproved by Governor David A. Paterson on December 15, 2010, pursuant to PAL §1009.

 

DISCUSSION

               

                “The Power Contract provides for the sale of up to 20 MW of Project power to MED for sub-allocation and resale by MED to ‘Qualified End Users’ located in St. Lawrence County.  For administrative convenience, the Authority has denominated this Project power as ‘St. Lawrence County Economic Development Power’ (‘SCEDP’).

 

                “MED currently purchases ‘preference power’ produced by the Authority’s Niagara Power Project to serve all classes of retail customers in its service area.  SCEDP that would be sold to MED under the Power Contract is not preference power, but would be sold to MED at equivalent cost-based rates.  In accordance with the Power Contract, MED would be authorized to resell SCEDP to Qualified End Users at a rate that does not recover from such purchasers more than the cost to MED of the allocation by the Authority, plus the MED’s costs as prescribed by the Power Contract.

 

                “Under the Power Contract, MED and/or an agent would solicit applications for ‘sub-allocations’ of SCEDP.  Applications would be evaluated in consultation with other entities identified in the Power Contract.  Applications by ‘Eligible Applicants’ would be evaluated based on an economic development plan attached to, and made part of, the Power Contract.  Applications deemed acceptable pursuant to the Power Contract would be forwarded to the Authority for consideration.  If an application is approved, MED would be authorized to enter into a ‘Sub-Allocation Contract’ with the ‘Qualified End User’ which would set forth the terms and conditions applicable to such person’s purchase of SCEDP from MED.  The form of the Sub-Allocation Contract would be subject to Authority approval.  The Authority would then make an ‘Allocation’ of SCEPD to MED for the corresponding Sub-Allocation of SCEDP. 

 

                “The Power Contract does not provide for any monetization by the Authority for the benefit of MED or other entities (a stated basis for disapproval of the Proposed 2010 Contract), and the Authority would continue to have the exclusive use of all SCEDP that has not been specifically allocated to MED for Sub-Allocations made to, and taken down by, Qualified End Users.

 

                Under the Power Contract, Sub-Allocations of SCEDP may not exceed seven (7) years without good cause shown by MED.  Allocations of SCEDP by the Authority may be used by MED solely for the purpose of making corresponding Sub-Allocations in accordance with the Power Contract. 

 

                “MED would be responsible: (i) to serve as the NYISO Load Serving Entity for the SCEDP, and (ii) for the transmission and delivery of SCEDP from the Project switchyard to points of delivery to the Qualified End Users, and would also be responsible for all costs associated with these matters (subject to recoupment of costs from Qualified End Users).

               

                The Power Contract contains numerous other provisions found in other Authority power contracts, relating to such matters as hydropower curtailments, prohibitions on the transfer of power, and modifications and terminations of allocations due to jurisdictional rulings and orders.

 

                “The Power Contract would have an effective termination date of September 1, 2025.

 

FISCAL INFORMATION

 

                “Power sales would be made to MED at the Authority’s cost-based rates and thus would recover the Authority’s cost of production.

 

RECOMMENDATION

 

                “The Senior Vice President – Marketing and Economic Development recommends that the Trustees approve a public hearing on the Power Contract.  It is further recommended that, pursuant to PAL §1009, the Corporate Secretary be authorized to transmit copies of the proposed Power Contract to the Governor and legislative leaders for their information and to arrange for the publication of a notice of public hearing in six newspapers throughout the State in accordance with the Public Authorities Law.

 

“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.”

 

Mr. Mike Lupo presented highlights of staff’s recommendation to the Trustees.  In response to a question from Trustee Nicandri, Mr. Lupo said that the Regional Economic Development Council first reviews the recommendation after which it is recommended to the Authority’s Board for its approval.  Responding to a question from Trustee O’Luck, Mr. Lupo said that staff recommends an allocation to Massena Electric Department (“MED”); under Article III, MED can then sub-allocate the power.  Applications are reviewed by the Industrial Development Authority (“IDA”) and the Regional Economic Development Council, then the Authority’s Board for final approval.  The Board has the discretion to accept, reject, or reduce the allocation or request additional information.  Responding to a question from Trustee Curley, Mr. Lupo said that the sub-allocation is not available to not-for-profit entities.

Trustee Dyson thanked the General Counsel for her work on the contract negotiations.  He and Trustee Nicandri had discussions with the Senators in Massena in this regard and he is pleased with the outcome.  Ms. McCarthy added that she wanted to thank Messrs. Robert McNeil, Andy McMahon, Patrick Kelly and Eric Gustafson from the North Country for their cooperation and diligence during the negotiations.

               

 

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 power contract (“Power Contract”) for the sale of hydropower to the Town of Massena, Massena Electric Department (“MED”); and be it further

 

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

 

RESOLVED, That the Corporate Secretary be, and hereby is, authorized to arrange for the publication of a notice of public hearing in six newspapers throughout the State, all done in accordance with the provisions of Public Authorities Law §1009; and be it further

 

RESOLVED, That the President and Chief Executive Officer and the Acting Chief Operating Officer or their designees are, and each of them hereby is, authorized, subject to the approval of the form thereof by the Executive Vice President and General Counsel, to enter into such agreements, and to do such other things, as may be necessary or desirable to finalize the form of the Power Contract and Service Tariff No. SC-1 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 Acting 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 resolutions, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 


8.                   Solar Market Acceleration Program Authorization and 100 MW Solar Initiative – Staff Report  

                The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to authorize up to $30 million in funding to implement the Solar Market Acceleration Program (‘Solar MAP’).  Solar MAP would be comprised of up to $30 million in solar photovoltaic (‘PV’) research, training and demonstration projects targeting PV cost reductions over five years.  The program would be developed in support of the Governor’s NY-Sun initiative, which calls for increasing solar capacity in New York State (‘NYS’) while protecting ratepayers.  To that end, the Authority would engage the services of research institutions, technology development companies and technical consultants to provide studies and training.  In addition, project grants to eligible participants of the Authority’s Statewide Energy Services Program (‘ESP’) would be provided to meet the mission of this effort.

“In addition, the Trustees are requested to approve the closure of the 100 MW Solar Initiative competitive solicitation without an award.

BACKGROUND

The Authority’s mission is to provide clean, economical and reliable energy consistent with its commitment to safety, while promoting energy efficiency and innovation for the benefit of its customers and all New Yorkers.  The Authority has worked to help the State reach the  goals of Executive Order No. 111 (which requires agencies to reduce energy consumption while transitioning to renewable energy sources) and ‘45x15’ (which aims for 45% of the State’s electricity needs to be met through improved energy efficiency and renewable sources by 2015).  In that regard, the Authority has been a leader in providing ESPs throughout NYS, resulting in nearly $139 million in annual customer savings at about 3,800 public facilities, including schools, hospitals and municipal buildings, for a reduction of annual greenhouse gas emissions of more than 830,000 tons. 

The Authority has also played a major role in developing and expanding the NYS solar energy industry with over 100 installations to date totaling over 2.5 MW of capacity, including the first large-scale solar projects developed in New York dating back to the early 1990s.  Over the last few years, as part of the 2008 Trustee authorized Renewable Energy Program, the Authority has supported the development of over 50 PV projects, including a 750 kW PV system at the University at Buffalo and smaller systems installed at public facilities, as part of comprehensive energy efficiency packages.

In January 2010, the Authority conducted an extensive Request for Proposals (‘RFP’) process calling for the installation of 100 MW of solar power capacity statewide (‘100 MW Initiative’).  This initiative was envisioned as a public-private partnership with private solar developers owning and operating solar power systems at public facilities throughout NYS. 

“The initiative presented several risks and challenges.  First, implementing the 100 MW Initiative would require an estimated $20 million annual average subsidy from the Authority for 20 years to cover the premium cost of the solar energy through long-term Power Purchase Agreements.  Second, public facilities were reluctant to sign long-term leases with private developers and were not able to accept certain contractual risks from lease terminations or temporary site closures, leaving the Authority at risk to pay developers potentially significant default penalties.  Lastly, the 100 MW Initiative offered limited support to local manufacturing as the bulk of equipment purchased would most likely have been from outside of NYS. 

 

Consequently, staff recommends and requests Trustee authorization to close the 100 MW Initiative competitive solicitation without making an award.

 

Governor Cuomo recently called for the expansion the State’s solar programs through the NY-Sun Initiative, with the goal of doubling the State’s customer-sited PV capacity that was installed in 2011 and quadrupling that capacity by 2013.  NY-Sun is expected to be developed through an expansion of NYS’s existing solar energy incentive programs including the Renewable Portfolio Standard solar incentive program administered by the New York State Energy Research Development Authority (‘NYSERDA’) as well as an expansion of the solar incentives offered by the Long Island Power Authority (‘LIPA’).  In addition, NY-Sun calls for expanding to the commercial sector the New York solar sales tax exemption currently available only to homeowners.  The Governor also stated a concern regarding the high cost of solar power and stressed the need to keep a firm eye on solar costs to protect ratepayers.  Solar MAP is designed to complement the NY-Sun Initiatives by targeting research to help reduce PV costs thereby allowing the NYSERDA and LIPA incentive programs to be more cost effective. 

 

The Power New York Act of 2011 directed NYSERDA to evaluate the costs and benefits of dramatically increasing the use of PV in New York State.  NYSERDA’s recently released ‘Solar Study’ recommended that New York continue to invest in PV, but that any strategies to do so should be complemented by additional efforts to reduce balance-of-system costs, including more streamlined permitting processes, and continued financial support for targeted research and development, workforce training and business development.  Solar MAP is designed to complement the NY-Sun initiative and help to achieve these recommendations from the Solar Study.

 

The Trustees are requested to authorize up to $30 million in total funding for Solar MAP, aimed at supporting the Governor’s recent call for increasing solar capacity in NYS while protecting ratepayers. 

 

DISCUSSION

 

Solar MAP is designed to target and reduce solar development costs in New York and to support the Governor’s goals of increasing solar capacity statewide while protecting ratepayers and establishing New York’s technology leadership in this important emerging market.

 

If authorized by the Trustees, Solar MAP would consist of a non-recoverable solar fund of up to $30 million to be available for expenditure over a five-year period commencing April 1, 2012. 

 

The Solar MAP would consist of three main areas of activity:

 

1.       Engage research institutions, technology development companies and technical consultants, through competitive solicitations, either independently or in collaboration with NYSERDA, to provide research studies in connection with solar panel and balance-of-system cost reductions.

 

2.       Develop solar demonstration projects located at ESP participant sites to validate advanced PV technology performance, system integration strategies, cost reductions and safety.  Demonstration sites will also serve as technology laboratories and centers for training and education.  Demonstration sites and specifications that best meet program goals will be selected by the Authority.  Site construction services and equipment will be procured through a competitive solicitation process. 

 

3.       Develop solar soft-cost reduction strategies consisting of technical studies and analysis performed in coordination with State agencies, State authorities and distribution utilities.  Strategies will focus on streamlining the integration of solar generation with the grid and energy markets.  Projects will also aim to standardize statewide solar design and permitting packages and pre-certifying utility and owner-operator agreements.  Solar training programs will also be coordinated with local permitting authorities and fire departments.

 

A steering committee will be formed within the Authority to review all competitive solicitations to be issued under Solar MAP, as well as all resulting contract and grant award recommendations.

 

Staff will also coordinate with NYSERDA to share expertise and results.  Collaboration and additional co-funding would be sought from the US Department of Energy’s Advanced Research Projects Agency for Energy (‘ARPA-E’), the Electric Power Research Institute (‘EPRI’), National Research Labs and others to secure additional research dollars for New York.

 

FISCAL INFORMATION

The $30 million Solar Market Acceleration Program will be funded from the Authority’s Operating Fund.  

 

RECOMMENDATION

 

The Senior Vice President – Marketing and Economic Development and the Vice President – Energy Services and Technology recommend that the Trustees authorize termination of the 100 MW Initiative Request for Proposals without an award, and formally approve the Solar Market Acceleration Program as described above.

 

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

 

Mr. Guy Sliker presented highlights of staff’s recommendation to the Trustees.  Responding to a question from Trustee O’Luck, Mr. Sliker said that by working with NYSERDA, New York State companies will be targeted for this initiative.

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

 

WHEREAS, the Authority issued a Request for Proposals (“RFP”) for supply of electric energy from solar photovoltaic power systems for up to 100 megawatts (“MW”) to be located at facilities throughout New York State; and

 

WHEREAS, as a result of evaluating proposals received in response to the RFP, the Authority determined it is not fiscally prudent to commit its resources to the estimated annual subsidy required for the 100 MW Solar Initiative;

 

RESOLVED, That the President and Chief Executive Officer, or his designee, is hereby authorized on behalf of the Authority to close the 100 MW Solar Initiative competitive solicitation without award and notify bidders of this outcome; and be it further

 

RESOLVED, That the Trustees hereby authorize up to $30 million in total available funds to be used for solar research studies, training programs and project demonstration grants, with such funds being utilized over a five-year period for the Solar Market Acceleration Program as described in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That Operating Fund monies will be used to fund such studies, training programs and grants in the amount and for the purposes listed below:

 

 

 

 

                                                                                Expenditure

Authorization              Authorization

Operating Funds                (not to exceed)                     Expires

 

Research Studies,                   $30 million                      4/1/2017

Training Programs

and Project Grants              

 

AND BE IT FURTHER RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting 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.

 


9.                   2011 Financial Reports Pursuant to Section 2800 of the Public Authorities Law and Regulations of the Office of the State Comptroller

                 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the financial report for the year ended December 31, 2011 and authorize the Corporate Secretary to submit this report to the Governor, legislative leaders, the State Comptroller and the Authorities Budget Office (‘ABO’) pursuant to Section 2800 of the Public Authorities Law, as amended by the Public Authorities Accountability Act of 2009 (‘PAAA’).  In accordance with regulations adopted by the Office of the State Comptroller (‘OSC’), the Trustees are also requested to approve and authorize posting of a report of actual versus budgeted results for the year 2011 on the Authority’s web site.

 

BACKGROUND

 

“The PAAA reflects the State’s commitment to maintaining public confidence in public authorities by ensuring that the essential governance principles of accountability, transparency and integrity are followed at all times.  To facilitate these objectives, the PAAA established an independent ABO that monitors and evaluates the compliance of State authorities with the requirements of the Act.  The PAAA became effective with the Authority’s fiscal year beginning January 1, 2006.  The PAAA amended Section 2800 of the Public Authorities Law to require that financial reports submitted by a State authority under Section 2800 be certified by the chief executive officer and chief financial officer and approved by the authority’s board.

 

“Following rulemaking proceedings undertaken pursuant to the State Administrative Procedure Act, OSC implemented regulations on March 29, 2006 that address the preparation of annual budgets and related reporting requirements by ‘covered’ public authorities, including the Authority.  These regulations establish various procedural and substantive requirements relating to the budgets and require the chief financial officer to report publicly not later than 90 days after the close of each fiscal year on actual versus budgeted results. 

 

DISCUSSION

 

“The Trustees are requested to approve the required financial report for the year ended December 31, 2011 (Exhibit ‘9-A’) and authorize the Corporate Secretary to submit this report to the Governor, legislative leaders, the State Comptroller and the ABO pursuant to Section 2800 of the Public Authorities Law, as amended by the PAAA.  This report was reviewed by the Audit Committee at its meeting of March 27, 2012.  The Trustees are also requested to approve a report of actual versus budgeted results for the year 2011 (Exhibit ‘9-B’) and authorize posting it on the Authority’s website.

 

FISCAL INFORMATION

 

“There is no anticipated fiscal impact.

 

RECOMMENDATION

 

“The Vice President and Controller recommends that the Trustees approve and authorize submittal of the attached reports (Exhibits ‘9-A’ and ‘9-B’) as discussed herein.

 

“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.

 

WHEREAS, pursuant to Section 2800(1) of the Public Authorities Law, the Authority is required to annually submit to the Governor, the Chairman and Ranking Minority Member of the Senate Finance Committee, the Chairman and Ranking Minority Member of the Assembly Ways and Means Committee, the State Comptroller and the Authorities Budget Office, within 90 days after the end of its fiscal year, a complete and detailed report or reports setting forth certain information regarding, among other things, certain financial information; and

 

WHEREAS, pursuant to Section 2800(3), financial information submitted under Section 2800 shall be approved by the Authority’s Board of Trustees and shall be certified in writing by the Chief Executive Officer and the Chief Financial Officer of the Authority that based on the officer's knowledge the information provided therein (a) is accurate, correct and does not contain any untrue statement of material fact; (b) does not omit any material fact which, if omitted, would cause the financial statements to be misleading in light of the circumstances under which such statements are made and (c) fairly presents in all material respects the financial condition and results of operations of the Authority as of, and for, the periods presented in the financial statements; and

 

WHEREAS, the Chief Executive Officer and Chief Financial Officer have so certified as to the financial information contained within the attached reports for the fiscal year ending December 31, 2011 as evidenced by a writing dated even date hereof;

 

  NOW THEREFORE BE IT RESOLVED, That pursuant to Section 2800 of the Public Authorities Law, the financial reports attached hereto are adopted and the Corporate Secretary be, and hereby is, authorized to submit to the Governor, the Chairman and Ranking Minority Member of the Senate Finance Committee, the Chairman and Ranking Minority Member of the Assembly Ways and Means Committee, the State Comptroller, and the Authorities Budget Office the attached financial report for the year ending 2011 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 attached report of actual vs. budgeted results for the year 2011 is approved in accordance with the foregoing report of the President and Chief Executive Officer; and the Corporate Secretary is authorized to post the report on the Authority’s Web site; and be it further               

 

  RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting Chief Operating Officer,  the Acting Chief Financial 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.

 

               

10.                a.             Election of Chief Operating Officer

The Chairman submitted the following report:

 

SUMMARY

“The Trustees are requested to consider the election of Mr. Edward Welz of Queens County, New York as Chief Operating Officer of the Authority, effective immediately.

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 until his successor is chosen and qualified or his earlier removal, resignation or death.

RECOMMENDATION

“It is recommended that, pursuant to Article IV of the By-laws, adopted December 18, 1984, and last amended on July 26 2011, Mr. Edward Welz be elected as Chief Operating Officer, effective immediately, to hold such office until his successor is chosen and qualified or his earlier removal, resignation or death.”

                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, Mr. Edward Welz is hereby elected as Chief Operating Officer, effective immediately, and shall hold office until his successor is chosen and qualified or his earlier removal, resignation or death.

 

b.             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 Mr. Donald Russak of Westchester County, New York as Executive Vice President and Chief Financial Officer of the Authority effective immediately.

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 until his successor is chosen and qualified or his earlier removal, resignation or death.

RECOMMENDATION

“It is recommended that, pursuant to Article IV of the By-laws, adopted December 18, 1984, and last amended on July 26, 2011, Mr. Donald Russak be elected as Executive Vice President and Chief Financial Officer, effective immediately, to hold such office until his successor is chosen and qualified or his earlier removal, resignation or death.”

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, Mr. Donald Russak  is hereby elected as Executive Vice President and Chief Executive Officer, effective immediately, and shall hold office until his successor is chosen and qualified or his earlier removal, resignation or death.


c.             Election of the Vice Chairman of the Authority 

                                               

The Chairman submitted the following report:

 

SUMMARY

               

                “In accordance with Section 1004 of the Public Authorities Law (the ‘Power Authority Act’), the Trustees are requested to elect Mr. John S. Dyson, of Millbrook, Dutchess County, as Vice Chairman of the Authority, effective immediately. 

 

DISCUSSION

                “Section 1004 of the Power Authority Act provides that the Trustees may choose, from among their own number, a Trustee to hold the position of Vice Chairman of the Authority.  Mr. Dyson is exceptionally well qualified to serve as Vice Chairman based on his long career and many accomplishments in the public and private sectors, his extensive business skills, his knowledge of energy and economic development issues and his commitment to public service.

“Mr. Dyson currently serves as Chairman of Millbrook Capital Management, a private investment firm that manages a manufacturing company, a hedge fund and vineyards in Millbrook, California and Italy.  His career in public service includes a previous tenure as Chairman of the Power Authority from 1979 to 1985, with appointments as a Trustee by Governors Hugh L. Carey and Mario M. Cuomo.  Mr. Dyson’s accomplishments as Chairman included winning regulatory approval for construction of the 207-mile Marcy-South transmission line in the face of intense controversy and opposition; negotiating and signing a major contract for purchases of hydroelectric power from Quebec; conceiving and implementing ‘Juice for Jobs,’ the first Power Authority program to specifically link low-cost power allocations to job creation and protection by recipients; developing a multifaceted program to reduce the state’s dependence on imported oil; establishing and implementing the Authority’s first energy efficiency program; and presiding over construction of the Authority’s first two small hydroelectric projects--at the Ashokan and Kensico reservoirs.

“Prior to his nearly six years as Power Authority Chairman, Mr. Dyson had served in the Carey Administration, beginning in 1975, as Commissioner of Agriculture and Markets and as Commissioner of Commerce.  After leaving the Authority, he worked for the next decade in the private sector.  From 1995 through 2001, he served in the administration of New York City Mayor Rudolph W. Giuliani as Deputy Mayor for Economic Development and Finance and then as Chairman of the Mayor’s Council of Economic Advisors.   In the period since, he has devoted much of his time to directing the activities of Millbrook Capital Management, but has also taken on a number of public-service  assignments related to energy issues and policy in New York State and nationally. 

“Mr. Dyson served as a lieutenant in the U.S. Army in military intelligence from 1968 through 1970.  His service included one year in Vietnam, where he earned the Bronze Star, and a subsequent assignment at the Pentagon on the staff of the Assistant Chief of Staff, Intelligence.  Mr. Dyson holds a Bachelor of Science degree from Cornell University, where he majored in agricultural economics, and a Master’s degree in Public Affairs from the Woodrow Wilson School of Public and International Affairs at Princeton University.

RECOMMENDATION

“It is hereby recommended that Mr. John S. Dyson be elected as Vice Chairman of the Authority, effective immediately.”

 


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

 

RESOLVED, That pursuant to §1004 of the Public Authorities Law, Mr. John S.  Dyson, of Millbrook, Dutchess County, be, and hereby is elected as the Vice Chairman of the Power Authority of the State of New York, effective immediately.

 

 

11.                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 for the purposes of:

 

(1)     Clarifying the requirements under the Power Authority Act and other provisions of the Public Authorities Law and to reflect the technological advances.

 

(2)     Conforming the role of Chief Executive Officer and the Board of Trustees to best practice.

 

(3)     Amending the reporting structure of the General Counsel and Chief Financial Officer.  (See Exhibit ‘11-C’ - Governance Survey)

 

(4)     Amending titles to accurately describe officers’ roles and responsibilities.

 

(5)     Adding a new Board Committee.

 

(6)     Making other conforming and non-substantive changes.

 

“A redlined version of the proposed amended By-laws is attached as Exhibit ‘11-A.’  Deletions are shown by strikethroughs in brackets; additions are shown by bolded and underscored text.  The final version of the proposed amended By-laws is attached as Exhibit ‘11-B.’

 

“The General Counsel and I recommend that the Trustees approve the proposed By-laws amendments.”

 

                Ms. Judith McCarthy presented highlights of staff’s recommendation to the Trustees.  She said that the modifications to section H of the Authority’s By-laws were approved by the Governance Committee earlier today and is now being presented to the full Board of Trustees for approval.  By motion made and seconded the By-laws were approved as amended.

                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 July 26, 2011) discussed in the foregoing report of the President and Chief Executive Officer and attached hereto as Exhibit “11-A,” be hereby adopted; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Acting Chief Operating Officer, the Acting Chief Financial Officer and any other necessary Authority officers 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 necessary to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel.

 

 

 

12.                Adoption of Strategic Planning and Energy Committee Charter

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to review and adopt the Strategic Planning and Energy Committee Charter (Exhibit ‘12-A’). 

 

“The purpose of the of this new Board Committee is to review the Authority’s mission and develop, at least annually, a strategic vision for the Authority, with emphasis on its energy policy, its future goals, projects and overall direction; and perform such other responsibilities as the Trustees shall assign to it.

 

“The specific responsibilities of the Strategic Planning and Energy Policy Committee include:

 

·         Providing guidance and serving as a resource to the Board of Trustees and management in the development of the Authority’s energy policy and its long-term objectives, direction and strategic plans.

 

·         Assisting management in identifying potential concerns and critical strategic issues facing the Authority and analyzing alternative strategic options.

 

·         Reviewing, at least annually, the Authority’s mission statement, five-year strategic plan and overall direction.

 

·         Making recommendations, at least annually, to the full board related to the Authority’s mission, vision, strategic initiatives, major programs and services.

 

·         Understanding the industry and keeping up-to-date on market trends and advances in technology.

 

“The Strategic Planning and Energy Committee Charter is attached as Exhibit ‘12-A.’

 

“The General Counsel and I recommend that the Trustees approve the Strategic Planning and Energy Committee Charter.”

 

                Chairman Townsend thanked President Quiniones and Trustee Dyson for their leadership in framing the strategic planning and energy policy committee charter which he supports.  He said he is aware of the Authority’s role in the state’s economic development as seen in the number of jobs it facilitates, maintains and creates, and also its capital investments in the North Country, Niagara and Erie counties.  The strategic planning and energy policy committee charter is a move in the right direction.

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

 

RESOLVED, That the Strategic Planning and Energy Charter be adopted in the form proposed.

 

 

 

13.                Strategic Planning and Energy Policy Committee Appointments

 

The Chairman submitted the following report:

 

SUMMARY

 

“Trustees are requested to appoint Trustee John S. Dyson to serve as Chair of the newly-created Strategic Planning and Energy Policy Committee effective March 27, 2012, and Trustees Jonathan F. Foster, Eugene L. Nicandri and R.Wayne LeChase as members.

 

BACKGROUND

 

“Article V of the By-laws of the Power Authority of the State of New York, as amended today, March 27, 2012 (‘By-laws’), provides for the creation of a Strategic Planning and Energy Policy Committee.  The Committee is charged with reviewing the Authority’s mission and developing, at least annually, a strategic vision for the Authority, with emphasis on its energy policy, future goals, projects and overall direction.

 

“Under the Strategic Planning and Energy Policy Committee Charter, the Committee’s Chair and its members are to be selected by a vote of the Board of Trustees.

RECOMMENDATION

               

“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 Chairman, was unanimously adopted.

 

RESOLVED, That Trustee John S. Dyson shall be the Chair of the Strategic Planning and Energy Policy Committee effective March 27, 2012 and be it further

 

RESOLVED, That Trustee Jonathan F. Foster shall be a member of the Strategic Planning and Energy Policy Committee effective March 27, 2012 and be it further

 

RESOLVED, That Trustee Eugene L. Nicandri shall be a member of the Strategic Planning and Energy Policy Committee effective March 27, 2012, and be it further

 

RESOLVED, That Trustee R. Wayne LeChase shall be a member of the Strategic Planning and Energy Policy Committee effective March 27, 2012.


14.                Other Business

 

            By motion made and seconded, Trustee R. Wayne LeChase was nominated as a member of the Audit Committee.

 


15.                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 appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation.  On motion made and seconded, an Executive Session was held.

 


16.                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.


17.                Next Meeting

 

The next regular meeting of the Trustees will be held on Tuesday, April 24, 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.

 

 

 


Closing

                On motion made and seconded, the meeting was adjourned by the Chairman at approximately 1:36 p.m.

 

 

 

Karen Delince

Corporate Secretary