MINUTES OF THE REGULAR MEETING OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

May 20, 2008

 

Table of Contents

 

 

            Subject                                                                                                                             

 

1.             Consent Agenda:

a.        Minutes of the Regular Meeting held on April 29, 2008     

b.        Power for Jobs Program – Extended Benefits                               

c.        Allocation of 46,200 kW of Hydropower                                               

 

d.        Neighboring States Service Tariff Amendments Notice of Proposed Rule Making     
Resolution

 

Discussion Agenda:

2.             Financial Reports for the Four Months Ended April 30, 2008  

3.             Report from the President and Chief Executive Officer   

4.             Authorization to Fund Governmental Customers Energy Services Program – SENY Implementation Contractor – Contract Award                                                 

Resolution

5.             Procurement (Services) Contract – Fuel Gas Piping Inspection and  Repair – Consolidated Edison Company of New York, Inc. – Award    

Resolution

6.             New York State 2008 “Stay Cool!” Program             

Resolution

7.             Procurement (Engineering) Contract – St. Lawrence/FDR Power  Project Relicensing – Design for a New Dike at Wilson Hill Wildlife Management Area – Award                                               

Resolution

8.             Massena Substation – Designation of The Roger B. Clough Transmission Maintenance Facility
Resolution

 

9.             Motion to Conduct an Executive Session    

10.          Motion to Resume Meeting in Open Session                                        

11.          Next Meeting                                                                                                                 

 

                Closing


 

Minutes of the Regular Meeting of the Power Authority of the State of New York held via video conference at the following participating locations at 11:03 a.m.:

1)       New York Power Authority, 123 Main Street, White Plains, NY

2)       Niagara Power Project, 5777 Lewiston Road, Lewiston, NY

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

Present:                  Michael J. Townsend, Vice Chairman (White Plains, NY)

                                Elise M. Cusack, Trustee (Niagara Project, Lewiston, NY)

                                Robert E. Moses, Trustee (via telephone)

                                Thomas W. Scozzafava, Trustee (White Plains, NY)

                                James A. Besha, Sr., Trustee (White Plains, NY)

                                D. Patrick Curley, Trustee (White Plains, NY)

 

                                Frank S. McCullough, Jr., Chairman - excused

 

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Roger B. Kelley                                    President and Chief Executive Officer

Thomas J. Kelly                                    Executive Vice President, General Counsel and Chief of Staff

Joseph Del Sindaco                             Executive Vice President and Chief Financial Officer

Gil C. Quiniones                                   Executive Vice President – Energy Marketing and Corporate Affairs

Vincent C. Vesce                                  Executive Vice President – Corporate Services and Administration

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

Steven J. DeCarlo                                 Senior Vice President – Transmission

Angelo S. Esposito                              Senior Vice President – Energy Services and Technology

William J. Nadeau                                Senior Vice President – Energy Resource Management and Strategic Planning

James H. Yates                                     Senior Vice President – Marketing and Economic Development

Arnold M. Bellis                                   Vice President and Controller

Paul F. Finnegan                                  Vice President – Intergovernmental and Community Affairs

Lesly Y. Pardo                                      Vice President – Internal Audit

Donald A. Russak                                Vice President – Finance

William V. Slade                                   Vice President – Environment, Health and Safety

Thomas Warmath                                Vice President and Chief Risk Officer

Stephen Shoenholz                              Deputy Vice President – Public Affairs

Brian C. McElroy                                  Treasurer – Corporate Finance

Anne B. Cahill                                      Corporate Secretary

Angela D. Graves                                 Deputy Corporate Secretary

Dennis T. Eccleston                            Chief Information Officer

John J. Suloway                                   Executive Director – Licensing, Implementation and Compliance

Joseph Leary                                        Director – Corporate Community Affairs – Public and Governmental Affairs

Mark D. O’Connor                               Director - Real Estate – Procurement and Real Estate

James F. Pasquale                                Director – Business Power Allocations, Compliance and Municipal and

                                                                    Cooperative Marketing

Christine Pritchard                               Director – Intergovernmental and Community Affairs

Victoria Simon                                      Director – Business Integration and Special Projects – Energy Marketing and

                                                                    Corporate Affairs

Paul Tartaglia                                        Regional Manager - SENY – Charles Poletti Power Project

Caroline G. Garcia                                 Manager – Power Contracts – Marketing and Economic Development

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

Steve Schoenwiesner                          Senior Licensing Specialist – Public and Governmental Affairs

 

 


 

Vice Chairman Townsend presided over the meeting.  Corporate Secretary Cahill kept the Minutes.

 


 

Vice Chairman Michael J. Townsend announced that he would conduct the meeting as Acting Chairman in the absence of Chairman Frank S. McCullough, Jr.

 

 

1.                   Consent Agenda:

 

Vice Chairman Michael Townsend said that item #1b (Power for Jobs Program – Extended Benefits) had been approved by the Economic Development Power Allocation Board at their meeting on May 19, 2008. 

 

a.                    Minutes of the Regular Meeting held on April 29, 2008

The Minutes of the Regular Meeting held on April 29, 2008 were unanimously adopted.

 

b.             Power for Jobs Program – Extended Benefits

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve extended benefits for 30 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘1b-A.’  These customers have been recommended to receive such extended benefits by the Economic Development Power Allocation Board (‘EDPAB’). 

 

BACKGROUND

 

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

 

“The PFJ program originally made 400 megawatts (‘MW’) of power available.  The program was to be phased in over three years, with approximately 133 MW made available each year.  In July 1998, as a result of the initial success of the program, the Legislature amended the PFJ statute to accelerate the distribution of the power and increase the size of the program to 450 MW.

 

                “In May 2000, legislation was enacted that authorized another 300 MW of power to be allocated under the PFJ program.  Legislation further amended the program in July 2002.

 

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

 

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

 

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

 

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

 

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

 

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

 

DISCUSSION

 

“At its meeting on May 19, 2008, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 30 businesses listed in Exhibit ‘1b-A.’  Collectively, these organizations have agreed to retain more than 46,000 jobs in New York State in exchange for the rebates.  The rebate program will be in effect until June 30, 2009, the program’s sunset.

 

                  “The Trustees are requested to approve the payment and funding of rebates for the companies listed in Exhibit ‘1b-A’ in a total amount currently not expected to exceed $5.9 million.  Staff recommends that the Trustees authorize a withdrawal of monies from the Operating Fund for the payment of such amount, provided that such amount is not needed at the time of withdrawal for any of the purposes specified in Section 503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations, as amended and supplemented.  Staff expects to present the Trustees with requests for additional funding for rebates to the companies listed in the Exhibit in the future.

 

FISCAL INFORMATION

 

“Funding of rebates for the companies listed in Exhibit ‘1b-A’ is not expected to exceed $5.9 million.  Payments will be made from the Operating Fund.  To date, the Trustees have approved $120 million in rebates.

 

RECOMMENDATION

 

“The Executive Vice President and Chief Financial Officer and the Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing recommend that the Trustees approve the payment of electricity savings reimbursements to the Power for Jobs customers listed in Exhibit ‘1b-A.’

 

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

 

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

 

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

 

NOW THEREFORE BE IT RESOLVED, That to implement such EDPAB recommendations, the Authority hereby approves the payment of electricity savings reimbursements to the companies listed in Exhibit

“1b-A,” and that the Authority finds that such payments for electricity savings reimbursements are in all respects reasonable, consistent with the requirements of the PFJ program and in the public interest; and be it further

 

RESOLVED, That based on staff’s recommendation, it is hereby authorized that payments be made for electricity savings reimbursements as described in the foregoing report of the President and Chief Executive Officer in the aggregate amount of up to $5.9 million, and it is hereby found that amounts may properly be withdrawn from the Operating Fund to fund such payments; and be it further

 

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

 

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

 

  RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff.

 


 

 


 

c.             Allocation of 46,200 kW of Hydropower  

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve five allocations of available Replacement Power (‘RP’) or Expansion Power (‘EP’) totaling 46,200 kW to 4 industrial companies.

 

BACKGROUND

 

“Under Section 1005(13) of the Power Authority Act, as amended by Chapter 313 of the Laws of 2005, the Authority may contract to allocate or reallocate directly, or by sale for resale, 250 MW of firm hydroelectric power as EP and up to 445 MW of RP to businesses in the State located within 30 miles of the Niagara Power Project, provided that the amount of 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 or RP must be evaluated under criteria that include, but need not be limited to, those set forth in Public Authorities Law Section 1005(13)(a), which sets forth 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.

 

“On October 22, 2003, the Authority, National Grid, Empire State Development Corporation and the Buffalo Niagara Enterprise signed a Memorandum of Understanding (‘MOU’) that outlines the process to coordinate marketing and allocating Authority hydropower.  The entities noted above have formed the Western New York Advisory Group (‘Advisory Group’) with the intent of better using the value of this resource to improve the economy of Western New York and the State of New York.  Nothing in the MOU changes the legal requirements applicable to the allocation of hydropower. 

 

DISCUSSION

 

                “Staff recommends and the Advisory Group supports the available power being allocated to the four companies set forth in Exhibit ‘1c-A.’  The Exhibit shows, among other things, the amount of power requested, the recommended allocation and additional employment and capital investment information.  These projects will help maintain and diversify the industrial base of Western New York and provide new employment opportunities.  They are projected to result in the creation of 639 jobs.

 

RECOMMENDATION

 

“The Director – Business Power Allocations, Compliance and Municipal and Cooperative Marketing recommends that the Trustees approve the allocation of 46,200 kW of hydropower to the companies listed in Exhibit ‘1c-A.’

 

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

 

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

 

                RESOLVED, That the allocation of 46,200 kW of hydropower, as detailed in Exhibit “1c-A,” be, and hereby is, 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 President and Chief Executive 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, General Counsel and Chief of Staff.

 

 


 

 

 


 

May 20, 2008

Exhibit “1c-A-1

 

 

APPLICATION SUMMARY

Expansion Power

 

Company: Ashland Advanced Materials, Inc.

 

Location:                                                  Niagara Falls

                                                                            

County:                                                     Niagara County

 

IOU:                                                           National Grid

 

Business Activity:                                  Manufacturer of graphite products and heat treating services

 

Project Description:                               The project will include purchasing four buildings on 15 acres.  In addition, the company will purchase processing equipment, including a carbonization furnace, as well as other heat-treating equipment.  The project will also include production equipment for mold stock graphite and felt insulation production.

 

Prior Application:                                  No

 

Existing Allocation:                                None

 

Power Request:                                       5,000 kW

                                                  

Power Recommended:                            3,500 kW  

 

Job Commitment:     

                   Existing:                                   0 jobs

                   New:                                         75 jobs

                                                                           

New Jobs/Power Ratio:                             21 jobs/MW

New Jobs -

Avg. Wage and Benefits:                       $46,000

 

Capital Investment:                                $8.5 million 

 

Capital Investment                                  $2.4 million/MW

Per MW

 

Summary:                                                Ashland Advanced Materials, Inc. needs to expand capacity to meet increased demand for its products and services from a worldwide customer base.  A hydropower allocation would give the company a distinct and sustainable cost advantage over many of its competitors.  It will allow the company to attract contract service work for heat-treating materials on a global basis.  The company’s products include materials used in batteries for hybrid electric vehicles, heat-treat carbon gas diffusion membranes for fuel cell production and graphite components for use in silicon crystal production for solar cells.  The company has also applied for assistance from Niagara County.


 

May 20, 2008

Exhibit “1c-A-2

 

 

APPLICATION SUMMARY

Expansion Power

 

Company: Ceres Crystal Industries, Inc.

 

Location:                                                  Niagara Falls

                                                                            

County:                                                     Niagara County

 

IOU:                                                           National Grid

 

Business Activity:                                  Manufacturer of zirconia crystal export for jewelry applications

 

Project Description:                               The project will include expanding two existing facilities by a total of 21,000 square feet and purchasing and installing new equipment.  The new equipment will increase the company’s production capacity and be part of a new production line.  In addition, the company will add equipment to recycle scrap to increase manufacturing efficiency and market competitiveness.  The new equipment will include three furnaces, material-handling equipment, saws, mills and utility infrastructure improvements.

 

Prior Application:                                  Yes

 

Existing Allocation:                                4,600 kW of Replacement Power

 

Power Request:                                       3,000 kW

                                                  

Power Recommended:                            2,000 kW  

 

Job Commitment:     

                   Existing:                                   50 jobs

                   New:                                          50 jobs

                                                                           

New Jobs/Power Ratio:                             25 jobs/MW

 

New Jobs -

Avg. Wage and Benefits:                       $31,000

 

Capital Investment:                                $5.43 million 

 

Capital Investment                                  $2.7 million/MW

Per MW

 

Summary:                                                A hydropower allocation will allow Ceres to grow in Western New York by increasing its number of employees, increasing capacity and adding a new complementary product to its crystal production for jewelry.  A new low-cost hydropower allocation will keep the existing facility competitive so it can continue to manufacture in Western New York.


 

May 20, 2008

Exhibit “1c-A-3

 

 

APPLICATION SUMMARY

Replacement Power and Expansion Power

 

Company: Globe Specialty Metals, Inc.

 

Location:                                                  Niagara Falls

 

County:                                                     Niagara

 

IOU:                                                           National Grid

 

Business Activity:                                  Manufacturer of silicon metal and specialty alloys

 

Project Description:                               The project will include building repair and refurbishment of the company’s plant in Niagara Falls.  The company will repair and replace various equipment and components, including internal component replacement on two major furnaces, transformer upgrades and maintenance.  The rebuild includes redesigning certain internal furnace components, as well as replacing and/or upgrading the primary transformer.  In addition, the company will be adding a 150,000-sq.-ft. building addition required for its new Solsil operation, where it will produce high-purity solar-grade silicon for use in manufacturing solar panel modules.

 

Prior Application:                                  None

 

Existing Allocation:                               None

 

Power Request:                                       50,000 kW

                                                  

Power Recommended:                            40,000 kW (32,647 kw of RP and 7,353 kw of EP)

 

Job Commitment:     

                   Existing:                                        0 jobs

                   New:                                           500 jobs

                                                                           

New Jobs/Power Ratio:                             13 jobs/MW

New Jobs -

 

Avg. Wage and Benefits:                       $67,000

 

Capital Investment:                                $60 million 

 

Capital Investment                                  $1.5million/MW

Per MW

 

Summary:                                             Globe Metallurgical Inc. and Solsil, Inc. are wholly-owned subsidiaries of Globe Specialty Metals, Inc.  The Globe site has been idle since September 2003.  Globe intends to rebuild and restart the facility.  Metallurgical-grade silicon produced at this facility will be used in part to supply a new Solsil facility established on the property for the production of high-purity solar-grade silicon metal for use in manufacturing solar panel modules.


 

May 20, 2008

Exhibit “1c-A- 4

 

 

APPLICATION SUMMARY

Expansion Power

 

Company: Saint-Gobain, Inc. - Advanced Ceramics (Structural Ceramics Group)

 

Location:                                                  Niagara Falls                                     

 

County:                                                     Niagara County

 

IOU:                                                           National Grid

 

Business Activity:                                  Manufacturer of silicon carbide products

 

Project Description:                               The project will create the facility’s capability to produce performance-advantaged products for the armor market segment, specifically to satisfy a large near-term and growing opportunity for the military.  The company will construct a new building addition and purchase and install a new furnace, controls, plate press and ancillary equipment.

 

Prior Application:                                  Yes

 

Existing Allocation:                                 6,150 kW of RP

 

Power Request:                                       1,850 kW

                                                  

Power Recommended:                                 700 kW  

 

Job Commitment:     

                   Existing:                                178 jobs

Prior Allocation:                                      21 jobs still to be added from prior recent allocations

                   New:                                         14 jobs

                                                                           

New Jobs/Power Ratio:                             20 jobs/MW

 

New Jobs -

Avg. Wage and Benefits:                       $47,000

 

Capital Investment:                                $5.8 million 

 

Capital Investment                                  $8.29 million/MW

Per MW

 

Summary:                                             This investment is needed to enable the company to satisfy a near-term and growing opportunity for military armored products.  This facility is competing with several other Saint-Gobain facilities, including one in Worcester, Massachusetts, that currently has the furnace capacity to make this product.  The hydro allocation is critical to this facility’s ability to bring the project to Niagara Falls.  Low-cost power provides a competitive edge that cannot be replaced.  It is one of the major factors in the longevity of this company.


 

d.             Neighboring States – Service Tariff Amendments –  Notice of Proposed Rule Making                                    

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

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

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

·         add frequently used abbreviations and terms.

BACKGROUND

“The Neighboring States customers are the Connecticut Municipal Electric Energy Cooperative, the Massachusetts Department of Public Utilities, the Public Power Association of New Jersey, the City of Cleveland, the Allegheny Electric Cooperative (Pennsylvania), the Rhode Island Public Utilities Commission and the Vermont Department of Public Service.

“Neighboring States customers receiving service from (a) the Authority’s Niagara Power Project are served under Service Tariff Nos. NS-1 for firm power and energy, NS-2 for firm peaking power and energy and NS-3 for non-firm energy; and (b) the Authority’s St. Lawrence/ FDR Power Project are served under Service Tariff Nos.

SL-1 for firm power and energy and SL-2 for non-firm energy.  Currently, electricity for these customers is sold under agreements for the Sale of Power and Energy between the Authority and the Neighboring States customers.

DISCUSSION

“Authority staff believes that the amended Neighboring States service tariffs will be an improvement over the existing tariffs.  These changes will include necessary updated terminology and improve the organization and formatting.

 

“In addition, the proposed changes to the tariffs will make them more consistent with other utilities’ tariffs and will make them more readable and understandable for the Authority and its Neighboring States customers.

 

“The proposed revised Neighboring States service tariffs from the Niagara Power Project for firm, firm peaking and non-firm power are attached as Exhibits ‘1d-A,’ ‘1d-B’ and ‘1d-C,’ respectively.  The proposed revised service tariffs for firm and non-firm power from the St. Lawrence/FDR Power Project are attached as Exhibits

‘1d-D’ and ‘1d-E,’ respectively.

 

FISCAL INFORMATION

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

 

RECOMMENDATION

“The Manager Power Contracts recommends that the Trustees authorize the Corporate Secretary to file a Notice of Proposed Rulemaking in the New York State Register for the revision of service tariffs for the Authority’s Neighboring States customers.

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

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

 

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

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

RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff.


 

2.                   Financial Reports for the Four Months Ended April 30, 2008

 

 

Mr. Arnold Bellis presented the highlights of the reports to the Trustees.  In response to a question from Trustee James Besha, Mr. Bellis said that the Authority’s voluntary contribution of $60 million to the New York State Treasury was being shown on the books as 12 monthly payments of $5 million each for 2008.
3.             Report from the President and Chief Executive Officer

               

President Roger Kelley said that from an overall point of view he could tell the Trustees unequivocally that the staff continues to move forward doing the day-to-day business of the Authority and successfully carrying out the Authority’s mission for the people of New York State.  He reported on the following developments:

Unaccounted for Energy (“UFE”) Charges:  As previously reported, the power bills for two of the Authority’s full-requirements customers, the villages of Lake Placid and Tupper Lake, included extraordinarily large UFE charges earlier this year.  In response to these charges, and as previously discussed, the Authority agreed to suspend the UFE charges pending an investigation into the root cause and allow the two customers to spread these New York Independent System Operator (“NYISO”) charges over several months, thus smoothing out their payments.  Staff continues its discussions with NYISO, the Public Service Commission and National Grid to address the issue and the Authority remains hopeful that the parties will soon arrive at a mutually agreeable solution.

                Gregory B. Jarvis Plant at Hinckley Reservoir – Governor’s Working Group Issues Report:  Due to abnormally low water levels and lack of precipitation in the West Canada Creek Watershed in 2007, the inflow of water to the Hinckley Reservoir from May to October 2007 was at one of the lowest rates in the past 60 years.  In September 2007, the volume of water in the Reservoir was estimated to be about 15% of full capacity and the Authority’s Jarvis Plant was taken off-line in early September due to hydraulic limitations.  In response to the low water levels and concerns raised by the Authority and the Mohawk Valley Water Authority, the New York State Canal Corporation and the New York State Department of Environmental Conservation (“DEC”), the Governor created a Working Group in October 2007 to examine ways of facilitating communication and water allocation among the several competing interests and to develop a plan to help the Reservoir meet the future needs of the Oneida County community.  After numerous meetings, the Working Group issued a report on April 30th that contains 10 recommendations, including calls for improved communication and data sharing among the various stakeholders and for certain capital infrastructure improvements.  A copy of the report is available should any Trustee want to review it. 

                Tri-Lakes Reliability Project Update:  Construction of the 46 kilovolt (“kV”) line began in September 2007.  The project has been separated into three parts: 

Ø       The 8.5-mile northern section of the route is essentially complete.  The right-of-way (“ROW”) is cleared and access established; the poles and hardware are installed; the conductor is strung and existing distribution lines have been transferred to the new poles.  Verizon is transferring its telecommunications facilities. 

Ø       The construction of the 11.5-mile southern section of the route began in late January.  Approximately 90% of the ROW is cleared and access established; 30% of the poles and hardware is installed and the contractor is stringing the conductor and transferring the existing distribution lines.

Ø       Construction on the central portion of the route, which initially included the bypass of the Forest Preserve, was originally scheduled to begin in April.  Authority staff negotiated an agreement with DEC and National Grid to construct, instead of the bypass, the State Route 56 Alternative, which will go through the Forest Preserve for part of the central portion of the route.  The agreement was executed on February 7, 2008.  To effectuate the agreement, the Authority and National Grid had to prepare a supplement to the Environmental Impact Statement and an application to the Adirondack Park Agency (“APA”) for the Route 56 Alternative.  On May 9th, APA’s Board approved the Route 56 Alternative and the order was issued on May 14th.  It is anticipated that construction of the central portion will begin in June and that the project will be completed by the end of the year. 

RFP #5 Update:  Since last month’s Trustees’ Meeting, when the Board authorized the execution of a long-term supply agreement with Astoria Energy, staff has been working diligently to finalize the terms of the transaction.  Good progress is being made and the Authority expects to have a formalized term sheet very soon.  Vice Chairman Townsend said that he was very pleased to see the substantial progress that has been made since last month.
 

4.                   Authorization to Fund Governmental Customers Energy Services Program – SENY Implementation  Contractor – Contract Award

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to authorize increased funding in the amount of $750 million for the Governmental Customers Energy Services Program (‘GCESP’).  This amount would be in addition to the $780 million previously approved by the Trustees at their meeting of February 26, 2008.  In addition, the Trustees are requested to approve contracts with the firms of DMJM+Harris of New York, NY, Chu & Gassman Consulting Engineers (‘Chu & Gassman’) of Middlesex, NY, Camp Dresser and McKee, Inc. (‘CDM’) of Woodbury, NY, RCM Technologies, Inc. of New York, NY and Fulcrum Facilities Group of Short Hills, NJ for an initial amount of $700 million in aggregate for implementing contractor services in connection with the GCESP in the Southeastern New York area.  The terms for these contracts would be up to five years.  All costs will be recovered from participants in the GCESP.

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.

“In accordance with the Authority’s Expenditure Authorization Procedures, the award of non-personal services or equipment 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, requires the Trustees’ approval.

“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.  In that regard, since the late 1980s, the Authority has provided energy services programs throughout New York State.  These programs have been very successful and, to date, the Authority has achieved nearly $105 million in annual customer savings.  Of these savings, more than $70 million annually is attributable to the Governmental Customers served by the Authority in the Southeastern New York area.

“In April 2007, plans were announced for a reduction in overall electricity usage and greenhouse gas emissions in New York State (‘State’) and New York City (‘City’), respectively.  Due to the renewed focus on energy efficiency initiatives as set forth by the Governor (15% x 2015) and the Mayor (PlaNYC 2030), the Authority is planning to implement an expanded energy efficiency program to help the State and the City achieve the aggressive goals outlined in their plans.  It is estimated that an investment of $1.4 billion Statewide will be required to help attain a 15% reduction in energy usage throughout the State by 2015, with about $700 million invested for the Authority’s Governmental Customers as part of the GCESP. 

“As a full-service comprehensive energy provider to its Governmental Customers, the Authority meets these customers’ needs by offering low-cost competitive power and by providing value-added energy services.  The services rendered are not limited to program-specific offerings, but, rather, are flexible to allow customers to request services specific to their individual needs.  Customer-tailored project-specific offerings complement the Authority’s existing menu of programs and allow flexibility in the design of services that reduce customers’ energy costs while providing them with infrastructure improvements.   

“The Authority provides services that include developing feasibility studies, engineering designs, life-cycle cost analyses, procuring equipment, contractor labor, hazardous waste disposal, managing projects/construction and financing projects.  Measures include, but are not limited to:  building envelope-related improvements; HVAC modernization, including energy-efficient chillers, boilers and controls; high-efficiency motors; variable-speed drives, energy management systems (‘EMS’); process controls and distributed generation and a variety of beneficial electrification technologies.

DISCUSSION

“As the general contractor for the GCESP, the Authority will contract for the installation of ESP measures with Implementation Contractors (‘ICs’).  The services provided by the ICs will complement the Authority’s headquarters staff resources.  The IC’s scope of work generally consists of the following:

·         On-site screenings of customer’s facilities to determine which ones are likely candidates for realizing significant energy and operational cost savings from installing energy efficiency measures.

·         On-site surveys, energy audits, technical feasibility studies and Energy Master Plans to identify potential applications for energy efficiency measures approved for the GCESP.

·         Detailed engineering studies and analyses of specific energy efficiency measures or systems.

·         Design of proposed systems and/or measures.

·         Preparation of project proposal documents and solicitation of competitive bids.

·         Procurement of equipment and installation services.

·         Construction management and oversight of proposed system and/or measure installation and project closeout (including waste management).

 

“In addition, the IC will be required to work directly with the customer/program participant from facility audit to the final acceptance of equipment installation.  Procurement of materials and installation of the recommended energy efficiency measures will be competitively bid by the IC.  The IC will be required to guarantee the quality of all work performed.

“On February 25, 2008, the Authority advertised in the New York State Contract Reporter a Request for Proposals (‘RFP’) soliciting firms interested in providing implementation services for the GCESP.  As a result of that advertisement and invitations to bid, 24 firms downloaded the RFP from the Authority’s website.  Twelve firms attended a mandatory bidders’ conference that was held on March 5, 2008 to explain the proposed scope of work and provide an opportunity for potential bidders to ask questions and seek clarification.  The RFP was divided into three options:  Option A – Energy Services (Large Projects), Option B – Clean Water/Waste Water Facilities and Option C – Energy Services (Small Projects).  The bidders could elect to submit a proposal for any or all of the three options.

 

“On March 20, 2008, six firms submitted bids for one or more of the above options.  The bids were evaluated by a team of six staff members based on cost and qualifications for each of the three options, which were evaluated separately.  The qualification criteria included: relevant experience of the firm; design and construction management experience in New York City; experience in implementing energy efficiency projects; organization of the project team; qualifications of the support staff; familiarity with codes and permitting processes; financial capabilities; location(s) of support offices; commercial terms and proposal content and format. 

“The bids were analyzed and, as a result, staff recommends awarding contracts to the following five firms:  DMJM+Harris, Chu & Gassman, CDM, RCM Technologies and Fulcrum Facilities Group.  Multiple contracts are to be awarded for each option based on the anticipated level of program activity and to ensure the availability of qualified resources in the event that any contractor’s performance does not meet the Authority’s expectations.

“For Option A – Energy Services (Large Projects – Material and Labor cost over $1.5 million), the qualification evaluation results were tabulated in a bid evaluation matrix in which DMJM+Harris, Chu & Gassman, CDM, RCM Technologies and Parsons Brinckerhoff were ranked by staff as 1, 2, 3, 4 and 5, respectively.  In addition, a separate analysis was conducted based solely on overall cost in which Chu & Gassman, DMJM+Harris, CDM, RCM Technologies and Parsons Brinckerhoff were ranked 1, 2, 3, 4 and 5, respectively.  Finally, a cumulative ranking was performed using the rankings determined from both the qualifications and cost evaluations.  The firms were ranked from lowest (best) to highest.  As a result, DMJM+Harris, Chu & Gassman, CDM and RCM Technologies were ranked 1, 2, 3 and 4, respectively.  Based on the evaluation of their experience and their fees, staff recommends that contracts for Option A be awarded to these four firms.

“For Option B – Clean Water/Waste Water Facilities, the qualification evaluation results were tabulated in a bid evaluation matrix in which DMJM+Harris, CDM and Chu & Gassman were ranked by staff as 1, 2 and 3, respectively.  In addition, a separate analysis was conducted based solely on overall cost in which Chu & Gassman, DMJM+Harris and CDM were ranked 1, 2 and 3, respectively.  Finally, a cumulative ranking was performed using the rankings determined from the qualifications and cost evaluations.  The firms were ranked from lowest (best) to highest.  As a result, DMJM+Harris, Chu & Gassman and CDM were ranked 1, 2 and 3, respectively.  Based on the evaluation of their experience and their fees, staff recommends that contracts for Option B be awarded to these three firms.

 

“For Option C – Energy Services (Small Projects – Material and Labor cost up to $1.5 million), the qualification evaluation results were tabulated in a bid evaluation matrix in which DMJM+Harris, Chu & Gassman, CDM, RCM, Fulcrum Facilities Group and Parsons Brinckerhoff were ranked by staff as 1, 2, 3, 4, 5 and 6, respectively.  Parsons Brinckerhoff received the lowest score based on its qualifications and past performance.  In addition, a separate analysis was conducted based solely on overall cost in which Chu & Gassman, RCM Technologies, CDM, Fulcrum, Parsons Brinckerhoff and DMJM+Harris were ranked 1, 2, 3, 4, 5 and 6, respectively.  Finally, a cumulative ranking was performed using the rankings determined from both the qualifications and cost evaluations.  The firms were ranked from lowest (best) to highest.  As a result, Chu & Gassman, RCM Technologies, CDM, DMJM+Harris and Fulcrum Facilities Group were ranked 1, 2, 3, 4 and 5, respectively.  Based on the evaluation of their experience and their fees, staff recommends that contracts for Option C be awarded to these five firms.

Camp, Dresser and McKee, Inc.

“CDM is a full-service consulting, engineering, construction and operations firm that specializes in environmental, infrastructure and industrial projects.  CDM’s services include energy audits, efficiency analyses, feasibility studies, rate studies, process improvement, design and construction management, power generation, bio-solids management, reliability studies, efficiency planning, operations optimization and system troubleshooting.  CDM has performed well on design and implementation services it has performed for the Authority.  CDM understands the Authority’s processes and has proven program experience in all facility types.

Chu & Gassman Consulting Engineers, PC

“Chu & Gassman is a New York State-certified minority-owned business enterprise (‘MBE’), with full-service electrical, HVAC, plumbing and process instrumentation engineering and construction management capabilities.  This company has a well-proven track record and has worked directly with a number of the Authority’s Governmental Customers in the past.  Chu & Gassman has performed well on design and implementation services it has performed for the Authority.  Chu & Gassman also understands the Authority’s processes and has proven program experience with schools, housing developments, universities, government buildings, etc.

DMJM+Harris, Inc.

“DMJM+Harris, a full-service energy management company with an office in New York City, has strong in-house engineering services and project and construction management capabilities.  DMJM+Harris has performed well on design and implementation services it has performed for the Authority on various programs.  DMJM+Harris understands the Authority’s processes and has proven utility program experience in schools, municipal water treatment, courthouses, hospitals, universities, government buildings, etc.

Fulcrum Facilities Group

“Fulcrum, which has an office in Westchester County, has performed commissioning services and energy management for customers throughout New York State.  Fulcrum has experience serving hospitals, universities and school systems.  Fulcrum, which has strengths in detailed audits and developing feasibility studies, is a new Authority contractor.


 

RCM Technologies, Inc.

“RCM has provided professional engineering services to commercial and government clients for decades.  With offices in New York City, RCM capitalizes on its diverse engineering and technology platform to offer clients fully integrated and coordinated design, construction management and consulting services for HVAC, electrical and plumbing systems, with strengths in utility coordination.  RCM is a new Authority contractor.

FISCAL INFORMATION

“Additional funding of $750 million is requested to implement the Authority’s energy services offered under the GCESP.  The funding will be provided from the proceeds of the Authority’s Commercial Paper Notes and/or the Operating Fund.  In addition, projects may be funded, in part, with monies from Petroleum Overcharge Restitution (‘POCR’) funds.  An initial allocation of $20 million will be made to each of the five firms being recommended.  Additional allocations will be made based on each firm's performance, and subject to the Approval Limits for Execution of Commitments in the Authority’s then-current Expenditure Authorization Procedures (or equivalent limits set forth in any successor procedures).  All Authority costs, including Authority overheads and the costs of advancing funds, but excluding the POCR grants, will be recovered consistent with other Energy Services and Technology Programs.

RECOMMENDATION

“The Senior Vice President – Energy Services and Technology and the Director – Energy Services recommend that the authorized funding for the Governmental Customer Energy Services Program be increased by $750 million and that the implementation services contracts for GCESP services be awarded to DMJM+Harris, Camp, Dresser and McKee, Inc., Chu & Gassman Consulting Engineers, RCM Technologies and Fulcrum Facilities Group.

“The Executive Vice President, General Counsel and Chief of Staff, the Executive Vice President and Chief Financial Officer, the Executive Vice President – Corporate Services and Administration, the Executive Vice President – Energy Marketing and Corporate Affairs, the Senior Vice President – Marketing and Economic Development and I concur in the recommendation.”

                Mr. Angelo Esposito presented the highlights of staff’s recommendations to the Trustees.  Trustee Besha said that this is a wonderful program and that even more needs to be done in this area.  He added that he would hope the Authority would develop a similar program for upstate facilities.  Mr. Esposito responded that staff expects to present an agenda item authorizing such an upstate program.  Responding to a question from Trustee D. Patrick Curley, Mr. Esposito said that staff uses the simple payback over time method to evaluate energy services projects.

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

 

RESOLVED, That the Trustees authorize the President and Chief Executive Officer, the Executive Vice President – Energy Marketing and Corporate Affairs, the Senior Vice President – Energy Services and Technology or such other officer designated by the President and Chief Executive Officer to execute agreements and other documents between the Authority and Governmental Customers Energy Services Program (“GCESP”) participants and to execute agreements and other documents with implementation contractors, such agreements having such terms and conditions as the executing officer may approve, subject to the approval of the form thereof by the Executive Vice President, General Counsel and Chief of Staff, to facilitate the development of the GCESP and that the authorized funding level for the GCESP be $750 million, in addition to the $780 million previously authorized for the GCESP, as listed below:

 

                                Commercial Paper Program/

Operating Fund/ POCR                                                     Authorization

                               

                                GCESP

                                Previously Authorized                                                       $   780 million

                                Additional Funding                                                             $   750 million

                                Total Amount Authorized                                                  $1,530 million

 

AND BE IT FURTHER RESOLVED, That in accordance with the Guidelines for Procurement Contracts adopted by the Authority and the Approval Limits for Execution of Commitments  in the Authority’s then current Expenditure Authorization Procedures (or equivalent limits set forth in any successor procedures), $700 million of the foregoing amount be allocated to the approved contracts for DMJM+Harris, Camp, Dresser and McKee, Inc., Chu & Gassman Consulting Engineers, RCM Technologies, Inc. and Fulcrum Facilities Group in the amount and for the purposes listed below: 

                               

                                Commercial Paper Program/

                                Operating Fund/POCR                      Ceiling                                  Date

                                DMJM+Harris                                     Initial allocations of            5/31/2013

                                Chu & Gassman Consulting             $20 million per

                                  Engineers                                           contractor, up to

                                Camp, Dresser & McKee, Inc.          $700 million (aggregate)*

                                RCM Technologies, Inc.                    *Funds will be allocated

                                Fulcrum Facilities Group  based on contractor

                                                                                                performance and areas

                                                                                                of specialization

 

AND BE IT FURTHER RESOLVED, That the Authority’s Commercial Paper Notes, Series 1, Series 2 and Series 3, may be issued and Operating Fund monies may be used to finance GCESP costs; and be it further

 

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

 

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

RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff.  

 


 

5.             Procurement (Services) Contract – Fuel Gas Piping Inspection and Repair – Consolidated Edison Company of New York, Inc. – Award

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to approve the award of a three-year sole-source procurement (services) contract to Consolidated Edison Company of New York, Inc. (‘Con Edison’) to provide for inspection, repair, cleaning, painting and project management services for the aboveground fuel gas transmission piping at the Charles Poletti Power Project site (‘Poletti’).  This is part of a larger Con Edison project to inspect and repair the fuel gas supply system that operates at the Astoria Complex.  The Trustees are also requested to approve funding in the amount of $2 million for the term of the contract.

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 personal services contracts in excess of $500,000 if awarded on a sole-source basis.

“Con Edison provides fuel gas for power generation to NRG Energy, Inc., US Power Generating Company and the Authority via aboveground fuel gas transmission piping owned by the aforementioned utilities at the Astoria Complex.  The Authority is responsible for maintaining its share of the fuel gas pipe and related structures.  However, per its contractual agreement with the other two utilities, Con Edison is responsible for all maintenance activity related to the pipe, piping supports and related structures on their respective properties.  While some of the pipe is within the Poletti site perimeter, most of the Authority’s fuel gas supply system is located on Con Edison’s property and any maintenance performed by the Authority is subject to Con Edison’s regulations regarding access to its property and requires the Authority to indemnify and hold Con Edison harmless for all loss, cost and expense resulting from the exercise of the Authority’s right of access.  The Authority’s portion of the fuel gas supply and delivery system is a critical part of the Authority’s infrastructure; its inspection and maintenance is essential and Con Edison is uniquely positioned to carry out this work.

DISCUSSION

                “Con Edison has performed initial inspections of the fuel gas transmission piping system and has offered to contract for additional detailed inspections, repair, cleaning and painting of the fuel gas piping for the Authority’s interconnected portion.  The subject work scope would cover work on each utility’s property, as well as on Con Edison’s property.  It is advisable to have all of the piping repaired at the same time and by the same entity.  The proximity of each utility’s piping to that of the others and their sharing of some common structural supports, as well as other factors including scheduling, sequencing of the work, safety, environmental remediation and quality control, support the prudent business decision that all project piping inspection, repair, cleaning and painting services be performed by one responsible contractor under Con Edison’s project management.

                “The total project involves approximately 7,239 feet of large-diameter pipe, ranging from 12 ft. to 26 ft., and approximately 457 pipe supports.  The Authority’s portion of this fuel gas delivery system is approximately 1,493 ft. of pipe and 95 pipe supports, which does not include any work on the recently installed 500 MW fuel gas transmission piping.  The Authority would pay its proportional share of the cost, approximately 25%.  The work will be performed over a three-year period and comprises the following: maintaining pipe supports (cleaning, painting and repairing steel and concrete, as required); retrofitting existing structural pipe supports; inspecting fuel gas mains and sleeving, as required and maintaining fuel gas mains (cleaning and painting).

                “The subject services will be competitively bid by Con Edison.  Upon receipt of the Trustees’ approval, the Law Department will establish a ‘side agreement’ to the existing Operating Agreement between the Authority and Con Edison permitting Con Edison to perform the project work commencing on or about August 15, 2008 and requiring that Con Edison note in its bid document for such services that work on Authority property will be compensated in accordance with the New York State Prevailing Wage Rates, that the Authority be listed as an additional insured on the Insurance Certificate and that the Authority be provided with all information regarding work on Authority property, among other requirements.

                “Based on the foregoing, staff recommends the award of a sole-source contract to Con Edison for inspection, repair, cleaning, painting and project management services (including the competitive bidding and contractor selection process for the subject services), for a term of three years and in the amount of $2 million.

FISCAL INFORMATION

“Funds required to support this contract have been included in the 2008 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.

RECOMMENDATION

                “The Vice President – Project Management, the Vice President – Environment, Health and Safety and the Regional Manager – Southeastern New York recommend the Trustees’ approval of the award of a multiyear procurement (services) contract to Con Edison for the purpose and duration and in the amount set forth above.

                “The Executive Vice President, General Counsel and Chief of Staff, the Executive Vice President and Chief Financial Officer, the Executive Vice President – Corporate Services and Administration, the Executive Vice President – Energy Marketing and Corporate Affairs, the Executive Vice President and Chief Engineer – Power Generation and I concur in the recommendation.”

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

 

RESOLVED, That pursuant to the Authority’s Guidelines for Procurement Contracts and Expenditure Authorization Procedures adopted by the Authority, the award of a multiyear procurement (services) contract to Consolidated Edison Company of New York, Inc. is hereby approved as recommended in the foregoing report of the President and Chief Executive Officer, for the period of time indicated, in the amount and for the purpose listed below:

O&M                         Projected Closing Date          Contract Approval

                Fuel Gas Piping                  on or about 8/15/11                      $2 million      Inspection and Repair

 

AND BE IT FURTHER RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff.


 

6.             New York State 2008 “Stay Cool!” Program

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize the President and Chief Executive Officer to enter into an agreement with the New York State Energy Research and Development Authority (‘NYSERDA’) and provide $900,000 to support the coordinated 2008 statewide ‘Stay Cool’ program.  The program is intended to promote the use of higher-rated energy-efficient ENERGY STAR® products and increase public awareness of the need for energy conservation throughout the New York Energy $martSM territory.  This effort will deliver the important message of air conditioner replacement in addition to tips for reducing residential energy consumption and summer energy saving tips.

 

BACKGROUND

 

                “Since 2001, State agencies have engaged in a variety of energy demand-reduction initiatives.  Among those efforts was a coordinated campaign involving NYSERDA, the Authority and the Long Island Power Authority (‘LIPA’), in cooperation with the New York State Public Service Commission (‘PSC’), to promote prudent use of electricity in New York State.  These programs, known as ‘Keep Cool,’  ‘Stay Cool’ and ‘Be Cool,’ incorporated ENERGY STAR® product awareness campaigns and an air conditioner bounty program for the purchase of residential ENERGY STAR® room air-conditioning equipment and the return of old, inefficient units.

 

DISCUSSION

 

                “The focus of the public awareness campaigns is educating consumers on the value of energy efficiency and providing advice on ways to stay cool during the summer months while controlling energy costs.  The public appeal highlights the need to use power sensibly, coupled with ways to be more energy efficient.  The program uses assorted communications media, including television, internet, radio, newspapers and direct mail.  Promotional materials direct consumers to the ENERGY STAR® retailer partners, participating State government websites and the toll-free consumer hotline 1-877-NY-SMART (1-877-697-6278).  It is noteworthy that more than three-quarters of New York State consumers now recognize the ENERGY STAR® label, compared to one-third in 1999.

 

                “In 2001 and 2002, the ‘Keep Cool’ Air Conditioner Replacement Bounty Program was designed to ensure that old, inefficient air conditioners were taken out of circulation, recycled and replaced with highly efficient ENERGY STAR® models.  State residents could receive a $75 bounty when they turned in their old, working room air conditioner and purchased an ENERGY STAR® model.  In 2003, the bounty was reduced to $35.  Market share of ENERGY STAR® room air conditioners increased to approximately 70%, compared to 14% in 1999.  According to NYSERDA, ENERGY STAR® room air conditioners now comprise approximately 80% of the room air conditioner units sold to consumers.  More than 250,000 older units were removed from operation statewide and residential peak demand was permanently reduced by nearly 83 MW statewide as of 2006.  In addition, the demand-reduction and load-shifting tips marketed to consumers resulted in nearly 100 MW of reduced peak demand. 

               

                “Authority participation in the program specifically enabled residents of municipal electric systems and rural electric cooperatives to become eligible for the bounty program.  From 2001 through 2003, municipal and cooperative customers turned in more than 4,500 units.  By the end of 2005, with more than 1.5 million room air conditioners in operation statewide, 961,000 were ENERGY STAR® appliances.  Consequently, a revised ‘Stay Cool!’ program was instituted to sustain public awareness of energy-efficient products and focus on energy conservation during the summer peak demand period through New York Energy $martSM, a statewide program to promote ‘clean, energy-efficient products and solutions.’  The 2006 ‘Stay Cool!’ Program and the ‘Have an Energy Smart Summer’ campaign were estimated to have reached three million consumers.

               

“In 2007, the ‘Be Cool!’ Program achieved a peak load reduction of 1.5 MW and installed energy savings of 912,000 kWh while removing 10,000 inefficient air conditioners from the electric grid.  The marketing campaign the Authority helped fund in support of the ‘Be Cool!’ program had a 72% recall rate among surveyed consumers.  These marketing materials, appearing either in print, through broadcast media or on the internet, were viewed more than 200 million times.  The marketing survey also provided information that 32% of consumers were influenced through public awareness messages to shift their energy consumption behaviors to off-peak hours and 72% of consumers in New York City regularly use compact fluorescent light bulbs in their homes.

 

FISCAL INFORMATION

 

                “The Trustees have authorized the following amounts for the above-mentioned energy efficiency programs: 

 

 

Year

Total Authorized

by Trustees

Amount Transferred

to NYSERDA

2001

$2,000,000

$1,097,000

2002

$2,000,000

$1,470,000

2003

$1,250,000

$1,050,000

2004

$750,000

$710,755

2005

$550,000

$538,560

2006

$500,000

$464,000

2007

$1,000,000

$771,737

 

“For 2008, the Trustees are requested to authorize a contribution of up to $900,000, which will be drawn from the Authority’s Operating Fund.

 

 RECOMMENDATION

 

                “The Executive Vice President –  Energy Marketing and Corporate Affairs, the Senior Vice President – Energy Services and Technology and the Vice President – Intergovernmental and Community Affairs recommend that the Trustees authorize the President and Chief Executive Officer to enter into an agreement with the New York State Energy Research and Development Authority for the purpose of providing up to $900,000 to New York State’s 2008 ‘Stay Cool!’ and New York Energy $martSM  summer energy conservation awareness programs.

 

                “The Executive Vice President, General Counsel and Chief of Staff, the Executive Vice President –  Corporate Services and Administration and I concur in the recommendation.”

 

                Mr. Paul Finnegan presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Trustee Elise Cusack, Mr. Finnegan said that the New York State Energy Research and Development Authority’s (“NYSERDA”) role in the “Stay Cool!” program is to provide the personnel resources to put the program together.  President Kelley said that in the past NYSERDA had hired the contractors to collect old air-conditioning units from customers buying new energy-efficient models.  Mr. Finnegan added that, up until last year, NYSERDA had also administered the rebate program, which has now been phased out.  Responding to a question from Trustee Thomas Scozzafava, Mr. Finnegan said that similar programs exist for winter energy efficiency measures, but that the Authority has not been asked to participate in such programs.               


 

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

 

                WHEREAS, the energy challenges facing New York State require sustained public attention to the need for energy efficiency; and

 

                WHEREAS, Section 1001 of the Power Authority Act states “that it is desirable that the authority give its fullest cooperation to the energy research and development authority in advancing and promoting the development and implementation of new energy technologies …”; and

 

                WHEREAS, Section 1854(3) of the Public Authorities Law empowers the New York State Energy Research and Development Authority to contract with the Power Authority with respect to “the construction and operation of experimental or developmental facilities which implement new energy technologies which have prospects of reducing the economic, environmental and social costs of energy production and utilization”; and

 

                WHEREAS, such energy technologies as are referred to in the foregoing statutory provisions include advanced high-efficiency products promoted under the ENERGY STAR® program; and

 

                WHEREAS, a coordinated effort among and between New York State agencies and authorities is a proven effective means to educate consumers about the value of energy efficiency and raise public awareness of the availability of high-efficiency ENERGY STAR® products; 

 

                NOW THEREFORE BE IT RESOLVED, That the President and Chief Executive Officer of the Authority be, and hereby is, authorized to execute, on behalf of the Authority with the New York State Energy Research and Development Authority, an agreement to contribute up to $900,000 for the New York State 2008 “Stay Cool!” and New York Energy $martSM summer energy conservation awareness programs, subject to the approval of the form thereof by the Executive Vice President, General Counsel and Chief of Staff; and be it further

 

RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff. 


 

7.             Procurement (Engineering) Contract – St. Lawrence/FDR Power Project Relicensing – Design for a New Dike at Wilson Hill

Wildlife Management Area – Award                      

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve the award of a procurement contract to Gomez and Sullivan, Engineers, P. C. for engineering and design services for a new dike to be constructed within the Wilson Hill Wildlife Management Area (‘WHWMA’) at the St. Lawrence/FDR Power Project (‘Project’).  The term of the contract will be from June 1, 2008 through December 31, 2010.  The amount for which authorization is requested is $435,000, which includes the contract price and contingency.

 

BACKGROUND

 

“Pursuant to the license for the Project issued by the Federal Energy Regulatory Commission (‘FERC’) on October 23, 2003, the Authority is required to implement a variety of improvements at the WHWMA.  The license requires that the Authority refurbish and improve the existing dikes and water control structures, install new water control structures, install a new dike to separate the East and West pools of the WHWMA (‘New Dike’) and provide new or upgraded trails and wildlife viewing stations.  The New Dike would follow the alignment of a submerged asphalt road from the mainland to the western end of Wilson Hill Island and would have an emergency access road built on top of it.

 

“In June 2004, the Authority awarded a contract to Shaw/Stone & Webster Engineering of NY, Inc. (‘SHAW’) of Stoughton, MA, for the design of the WHWMA improvements.  Following completion of the design by SHAW, a contract was awarded in July 2007 to J. E. Sheehan Contractors, Inc. (‘Sheehan’) of Potsdam, NY to refurbish and improve the existing dikes and water control structures, install new water control structures and install the New Dike.  Construction commenced in August 2007.

 

“When construction of the New Dike began in September 2007 and deteriorated asphalt was removed from the submerged asphalt road, a previously unknown log road built in or before the 1860s was discovered.  Upon discovery of the log road, construction of the New Dike was halted pending discussion with the New York State Historic Preservation Officer (‘SHPO’), archeological investigation of the log road and review of engineering considerations for the New Dike.  While SHPO approved the resumption of construction in December 2007, the engineering review determined that the presence of the logs compromised the principal purpose of the New Dike, namely, creation of an impervious physical barrier between the East and West pools.  While it has been possible for Sheehan to successfully advance the improvements to existing dikes and water control structures within schedule and budget, construction of the New Dike could not proceed without a redesign that accounted for these unsuitable conditions.

 

“Redesign of the New Dike by SHAW was considered.  Following review of the Authority’s Expenditure Authorization Procedures (‘EAPs’), it was determined that the amount of work involved with the redesign, including additional geotechnical investigations to determine the extent of the log road, would exceed the EAPs’ rebidding thresholds for change orders.  Further, it was determined that the redesign work would be rebid because it was not an emergency condition and the design scope represented a task that a number of qualified engineering firms could perform. 

 

DISCUSSION

 

“On April 7, 2008, the Authority issued a Request for Proposals (‘RFP’) for the engineering services for the design of the New Dike and associated geotechnical work, including a notice in the New York State Contract Reporter.  Information regarding the nature of the log road, as well as available geotechnical, bathymetric and previously developed design data was included with the RFP.  Three proposals were received on April 28, 2008 from Gomez and Sullivan Engineers (‘GSE’), GZA GeoEnvironmental of New York (‘GZA’) and Paul C. Rizzo Associates, Inc. (‘Rizzo’).

 

“Staff from the Authority’s Licensing, Compliance and Implementation and Procurement and Real Estate Divisions, with support from Power Generation – Engineering, evaluated the proposals for technical qualifications and pricing.  All three firms were technically qualified.  GZA was not considered further because its bid price was significantly higher than GSE’s and Rizzo’s prices.  GSE provided a thorough treatment of all aspects of the work and a realistic price to accomplish it.  The bid price for GSE was slightly (less than 6%) higher than the bid price for Rizzo, but Rizzo did not propose an adequate level of effort for precursory review of existing geotechnical and bathymetric information to prepare the program for acquiring the additional geotechnical information that will be fundamental to redesigning the New Dike.  As a result, Rizzo did not capture an important aspect of the work and consequently underestimated the cost of the project.  A more substantial effort for this task would increase Rizzo’s cost to a point where it would exceed the GSE price. 

 

“It is recommended that the contract be awarded to GSE.  Its proposal demonstrated a superior familiarity with overall geotechnical conditions along the St. Lawrence River, a more comprehensive approach to evaluating the existing geotechnical and bathymetric information and completed construction work and a better recognition of the importance of this work in developing an effective program to obtain additional data to support the New Dike design.  GSE’s proposal was the only one to adequately address the full required project scope at a realistic price.  The term of the contract will be from June 1, 2008, through December 31, 2010; the award amount is $435,000. 

FISCAL INFORMATION

 

“Funds required to support contract services for capital projects have been included as part of the approved capital expenditures for the WHWMA improvement project and will be disbursed from the Capital Fund in accordance with the St. Lawrence/FDR Power Project License Compliance and Implementation Capital Expenditure Authorization Request. 


RECOMMENDATION

 

“The Executive Director – Licensing, Implementation and Compliance and the Vice President – Environment, Health and Safety recommend that the Trustees authorize award of a contract to Gomez and Sullivan Engineers, P. C. for $435,000 for design engineering services for the installation of a New Dike with water control structure and emergency access road at the Wilson Hill Wildlife Management Area at the St. Lawrence/FDR Power Project.   

 

“The Executive Vice President, General Counsel and Chief of Staff, the Executive Vice President and Chief Financial Officer, the Executive Vice President – Corporate Services and Administration, the Executive Vice President – Energy Marketing and Corporate Affairs and I concur in the recommendation.”

 

                Mr. John Suloway presented the highlights of staff’s recommendations to the Trustees.  Trustee Besha said that he thinks the Authority should use a qualification-based selection process for projects such as this one.  He said that federal law requires this, although similar legislation in New York State has not been enacted, but that he thinks the Authority should consider this in the future. 


 

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 contract to Gomez and Sullivan Engineers, P. C. for a period commencing on June 1, 2008 and ending on December 31, 2010, in an amount of $435,000, for design engineering services to install a New Dike with water control structure and emergency access road at the Wilson Hill Wildlife Management Area at the St. Lawrence/FDR Power Project in compliance with the new license, as recommended in the foregoing report of the President and Chief Executive Officer, as listed below:

 

 

Contractor                                                    Contract Approval

 

Gomez and Sullivan Engineers, P. C.                              $435,000

                                                                                                               

                AND BE IT FURTHER RESOLVED, That the Chairman, the President and Chief Executive 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, General Counsel and Chief of Staff. 

 


 

8.             Massena Substation—Designation of The Roger B. Clough Transmission Maintenance Facility                                               

 

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to designate the Line Crew and Service Building at the Authority’s Massena Substation as The Roger B. Clough Transmission Maintenance Facility.

 

BACKGROUND

 

“Roger B. Clough’s remarkable career of nearly 43 years at the Authority included service as a skilled transmission lineman and then as the longtime leader of Local 2032 of the International Brotherhood of Electrical Workers (‘IBEW’).  As the Business Manager of Local 2032 from 1982 until his retirement in November 2007, Mr. Clough represented the Local’s members at the St. Lawrence-Franklin D. Roosevelt Power Project, the Blenheim-Gilboa Pumped Storage Power Project and the Frederick R. Clark Energy Center and, before its sale to Entergy Corp., the James A. FitzPatrick Nuclear Power Plant.

 

“The Line Crew and Service Building, dating to 1980, originally consisted of a garage, a small office and lunchroom and limited shower and locker facilities.  It was expanded in 2002 to include a new lunchroom and offices as well as improved shower and locker accommodations.  The building now functions as the nerve center for the Authority’s Northern Region transmission operations, housing planning, engineering and supervisory activities and serving as the base for Authority linemen in the region.

 

DISCUSSION

 

                “Roger Clough began work as a janitor at what was then known as the St. Lawrence Power Project in December 1964.  He became a groundman just over two years later and, after a series of promotions, was named a hotstick lineman in 1974.

 

“After serving as an IBEW steward, Mr. Clough was elected President of Local 2032 in 1977 and Business Manager in 1982.  During his quarter-century as Business Manager, he proved a formidable negotiator, respected by a succession of Authority executives for his honesty and integrity and by his members for his steadfast commitment to their well-being.  Among the many complex issues he helped to address were the coming of the Authority’s 765-kilovolt transmission line and the sale of its two nuclear power plants.

 

“Mr. Clough also earned the admiration and trust of local, state and national union leaders and of public officials in Albany and Washington.  He was quick to recognize areas in which the interests of his members and those of the Authority coincided and was an effective and important ally of the Authority on a number of critical matters.

 

RECOMMENDATION

 

“The Senior Vice President – Transmission recommends that the Trustees designate the Line Crew and Service Building at the Authority’s Massena Substation as The Roger B. Clough Transmission Maintenance Facility.

            

“The Executive Vice President, General Counsel and Chief of Staff, the Executive Vice President Corporate Services and Administration, the Executive Vice President – Energy Marketing and Corporate Affairs, the Executive Vice President and Chief Engineer – Power Generation and I concur in the recommendation.”


 

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

 

                WHEREAS, Roger B. Clough occupies a unique place in the history of the New York Power Authority by virtue of a career of nearly 43 years that included service as a transmission lineman and, for 25 years, as Business Manager of Local 2032 of the International Brotherhood of Electrical Workers (“IBEW”); and

 

                WHEREAS, Mr. Clough’s sound judgment, unswerving integrity and broad knowledge of critical issues brought immense benefit to his members and to the Authority; and

 

                WHEREAS, after joining the Authority staff in December 1964 as a janitor at the St. Lawrence Power Project, Mr. Clough went on to become a groundman and then a lineman, ascending to the position of hotstick lineman in 1974; and

 

WHEREAS, he became active in union affairs during this period and subsequently was elected President of Local 2032 in 1977 and Business Manager, the Local’s top position, in 1982; and

 

WHEREAS, during his quarter-century as Business Manager until his retirement in November 2007, Mr. Clough represented his members with skill, dedication and utmost concern for their welfare while at the same time earning the trust, respect and friendship of his negotiating counterparts at the Authority; and

 

WHEREAS, Mr. Clough recognized that a strong Power Authority and a strong union were in each other’s best interests and consistently applied his considerable talents and vision to the pursuit of these goals;  and

 

WHEREAS, Mr. Clough’s extraordinary career stands as a testament to the vital role of union labor and union leadership in ensuring the Authority’s success; and

 

WHEREAS, it is fitting that Mr. Clough’s name be applied to a facility dedicated to the transmission maintenance function to which he devoted the formative years of his career and to the enhanced efficiency of members of the union that became the cornerstone of his professional life;

 

NOW THEREFORE BE IT RESOLVED, That the Trustees of the Power Authority of the State of New York express their appreciation to Roger B. Clough for his many years of exemplary service and that they hereby designate the Line Crew and Service Building at the Authority’s Massena Substation as the The Roger B. Clough Transmission Maintenance Facility.


 

9.             Motion to Conduct an Executive Session

               

“Mr. Chairman, I move that the Authority conduct an executive session pursuant to Section 105(1)(c) and (f) of the Public Officers Law of the State of New York to discuss matters relating to current and future investigations and personnel.”  Upon motion made and seconded, an Executive Session was held.


 

10.          Motion to Resume Meeting in Open Session

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

11.          Next Meeting

 

The next Regular Meeting of the Trustees will be held on Tuesday, June 24, 2008, at 11:00 a.m., at the St. Lawrence Power Project, Massena, New York, unless otherwise designated by the Chairman with the concurrence of the Trustees.

 


 

Closing

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

1:23 p.m.

 

 

 

 

Anne B. Cahill

Corporate Secretary