MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

January 25, 2011

 

Table of Contents

 

                Subject                                                                                                                                                

 

1.                   Consent Agenda:                                                                                                                     

a.       Minutes of  the Regular Meeting held on December 13, 2010                        

 

b.       Village of Mayville – Revised Retail Rates –  Notice of Adoption, exhibit - “1b-A” – “1b-C”

        Resolution           

 

c.        Decrease in Westchester County Governmental Customers Rates – Notice of Adoption , exhibit - “1c-A”            

 

d.       Temporary Assignment and Transfer of Economic Development Power, exhibit - “1d-A”

        Resolution           

 

e.        Municipal and Rural Electric Cooperative Economic Development Program – Allocation to the Village of Ilion                                                          

             

f.        Lease of Office Space – New York City Office –  501 Seventh Avenue                                     

                 

     g.       Marcy-South Static Wire Rehabilitation – Contract Award                            

 

h.       Energy Commodity Risk Analysis Software Solution                                      

 

i.         Information Technology Initiatives – Capital Expenditure Authorization Request

        Resolution             

           

 

Discussion Agenda:

2.       Q&A on Reports from:

a.       President and Chief Executive Officer, exhibit - “2a-A”

        Resolution  

 

b.       Chief Operating Officer, exhibit - “2b-A”

        Resolution

 

c.        Chief Financial Officer, exhibit - “2c-A”

        Resolution

 

3.                   Transmission Lines – Spacer and Damper Replacements – Capital Expenditure Authorization Request and Contract Award

                Resolution                           

 

4.                   Procurement (Construction) Contract – Installation of Standby/ PLM Generators in Grand Central Terminal – Award

                Resolution

                                                                                                                                        

5.                   Contribution of Funds to the State Treasury                                                                                                                   

Resolution

6.                   Policy for the Use of Interest Rate Exchange Agreements, exhibit - “6-A”

Resolution

 

7.                   Decrease in New York City Governmental Customer Fixed  Cost Component – Notice of Adoption, exhibit - “7-A” & “7-B”

                Resolution

   

8.                   Informational Video Presentation:  NYPA Transmission – 2011                                         

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 videoconference at the following participating locations at approximately 11:40 a.m.

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

2)       New York Power Authority, 95 Perry Street, Buffalo, NY

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

                                Michael J. Townsend, Chairman (White Plains, NY)

                                Jonathan F. Foster, Vice Chairman (White Plains, NY)

                                D. Patrick Curley, Trustee (Buffalo, NY)

                                Eugene L. Nicandri, Trustee (White Plains, NY)

                                Mark O’Luck, Trustee (White Plains, NY)

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Richard M. Kessel                               President and Chief Executive Officer

Gil C. Quiniones                                   Chief Operating Officer

Francine Evans                                    Executive Vice President, Chief Administrative Officer

                                                                    and Chief of Staff

Elizabeth McCarthy                           Executive Vice President and Chief Financial Officer

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

Thomas Antenucci                              Senior Vice President – Power Supply Support Services

Jordan Brandeis                                   Senior Vice President – Power Resource Planning and Acquisition

Steve DeCarlo                                      Senior Vice President – Transmission

Bert Cunningham                                Senior Vice President – Corporate Communications

Thomas DeJesu                                   Senior Vice President – Public and Governmental Affairs

Paul Finnegan                                      Senior Vice President – Public, Governmental and Regulatory Affairs

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

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

Paul Belnick                                         Acting Senior Vice President – Energy Services and Technology

John L. Canale                                     Vice President – Project Management

Thomas Davis                                      Vice President – Financial Planning and Budgets

Dennis Eccleston                                 Vice President – Information Technology/Chief Information Officer

Michael Huvane                                  Vice President – Marketing

John Kahabka                                     Vice President – Environmental, Health and Safety

Joseph Leary                                        Vice President –Community and Government Relations

Christine Pritchard                               Vice President – Media Relations and Corporate Communications

Francis Ryan                                        Vice President – Emergency Management

Scott Scholten                                      Vice President and Chief Risk Officer

John Suloway                                       Vice President – Project Development, Licensing and Compliance

Arthur Cambouris                               Deputy General Counsel – Litigation

Karen Delince                                      Corporate Secretary

Brian McElroy                                     Treasurer

Mike Lupo                                            Director – Marketing Analysis and Administration

Mark O’Connor                                   Director – Real Estate

Helle Maide                                          Director – Key Accounts and Business Development

Michael Saltzman                               Director – Media Relations

Sarah Barish-Straus                            Special Assistant – Project Development, President's Office

Andy Cline                                            General Manager – Transmission Maintenance

Rick Turner                                           Regional Manager, Northern New York – Site Administration, STL

Steve Lockfort                                     Manager, Risk Reporting – Energy Risk Assessment and Control

Timothy Muldoon                               Manager – Business Power Allocations and Compliance

Kevin O’Keeffe                                   Manager Video Production Services – Corporate Communications

Ricardo DaSilva                                  Electrical Engineer II – Generation and Facility Improvements

Lorna M. Johnson                               Assistant Corporate Secretary

Egel Travis                                            Pricing and Power Contract Analyst IIMarketing Analysis and Administration

Sheila Baughman                                                Senior Secretary – Corporate Secretary’s Office

Michael R. Press                                  Executive Director – M.R. Press Consulting LLC

Michael T. Bailey                                Trustee – Incorporated Village of Malvern

 


 

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


 

1.                   Consent Agenda

               

            Chairman Michael Townsend said that at the Finance Committee Meeting held earlier, members voted to move the item “Decrease in New York City Governmental Customer Fixed Cost Component – Notice of Adoption” from the Consent Agenda to the Discussion Agenda.

Chairman Townsend also said that the Economic Development Power Allocation Board had recommended that the Authority’s Trustees approve item 1d (Temporary Assignment and Transfer of Economic Development Power) at their meeting held earlier today.

 
 

a.                   Approval of the Minutes

 

                The Minutes of the Regular Meeting held on December 13, 2010 were unanimously adopted.


 

b.                   Village of Mayville – Revised Retail Rates – Notice of Adoption

                               

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Board of the Village of Mayville (‘Village Board’) has requested the Trustees to approve revisions to the Village’s retail rates for several customer service classifications.  This will result in a redistribution of revenues generated from existing retail rates among several customer classes and will not change the Village’s total annual revenue. 

 

BACKGROUND

 

                “The Village Board has requested the proposed rate revisions to more accurately reflect the cost of providing service to individual classes.  The proposed revisions are based upon a cost-of-service study which revealed that the rates presently charged to the residential and large commercial-secondary classes are 2.5% and 9.9% below the electric department’s cost of providing service to those classes, respectively.  On the other hand, the rate charged to the large non-commercial class, is above cost by about 14.7%.  Furthermore, the Village Board also requested that a third tier be added to the current residential winter inverted rate structure, to promote energy conservation.  The additional tier will isolate those customers using over 2,000 kWh each month, forcing the electric department to purchase more expensive power to meet the group’s additional demand.  The proposed residential rate is designed to allocate the additional cost to serve customers within the new tier.  The current rates have been in effect since August 1999.  

 

                “It is recommended that the rates for residential, large commercial-secondary and large non-commercial classes be set at the cost of providing service to these classes.

 

                “The Village Board has planned upgrades to the electric system amounting to $1.4 million, which are included in the cost-of-service study. The Village needs to relocate one of the two substations to safer grounds and upgrade its distribution substation equipment, poles, fixtures and street lighting system.  The Village is planning to debt-finance about 50% of its capital program by issuing a new bond.

 

                “Under the new rates, an average residential customer that currently pays about 5.4 cents per kWh will pay about 5.5 cents per kWh after the increase; a large commercial-secondary customer will see the rate increased from 4.6 cents per kWh to 5.1 cents per kWh and the large non-commercial customer rate will decrease from 8.5 cents per kWh to 7.2 cents per kWh.

 

DISCUSSION

 

“The proposed rate revisions are based on a cost-of-service study requested by the Village and prepared by Authority staff.  A public hearing was held by the Village on September 14, 2010.  No ratepayer comments were received at the public hearing.  The Village Board has requested that the proposed rates be approved. 

 

“Pursuant to the approved procedures, the Senior Vice President – Marketing and Economic Development requested that the Corporate Secretary file a notice for publication in the New York State Register of the Village’s proposed revision in its retail rates.  Such notice was published on November 17, 2010.  No comments concerning the proposed action have been received by the Authority’s Corporate Secretary.   

 

                “An expense and revenue summary, comparisons of present and proposed total annual revenues and their corresponding rates by service classification are attached as Exhibits ‘1b-A,’ ‘1b-B’ and ‘1b-C,’ respectively. 

 


 

RECOMMENDATION

 

                “The Director – Marketing Analysis and Administration recommends that the attached schedule of rates for the Village of Mayville be approved as requested by the Board of the Village of Mayville to take effect beginning with the first full billing period following the date this resolution is adopted.

 

                “It is also recommended that the Trustees authorize the Corporate Secretary to file a notice of adoption with the Secretary of State for publication in the New York State Register and to file such other notice as may be required by statute or regulation.

 

                “The Chief Operating Officer, 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 proposed rates for electric service for the Village of Mayville, as requested by the Board of the Village of Mayville, be approved, to take effect with the first full billing period following this date, as recommended 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, authorized to file a notice of adoption with the Secretary of State for publication in the New York State Register and to file any other notice required by statute or regulation; and be it further

 

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

 

 


 

                                                Exhibit “1b-A”

                                                                                                                                          January 25, 2011

Village of Mayville

Expense and Revenue Summary

 

                                                                                                             Four-Year      

                                                                                                              Average              2009             Proposed1

 

Purchase Power Expense

(NYPA hydro and incremental)                                                         $  716,358       $  815,003        $  730,406

 

Distribution Expense (Village-owned facilities)                                     210,828            223,633           238,700

 

Depreciation Expense

(On all capital facilities and equipment)                                                   96,543            116,857           159,694

 

General and Administrative Expenses                                                                       

(Salaries, insurance, management services and                                       233,812            256,960           287,798

Administrative expenses)

 

Total Operating Expenses                                                                    $1,257,541       $1,412,453    $1,416,598

 

Net Rate of Return – (Four year average - 8.0%,

2009 – 8.1%, proposed - 7.0%)

(includes debt service on current and planned debt,

cash reserves and contingencies)                                                             190,836           209,122         191,867

 

 

Total Cost of Service                                                                          $1,448,377       $1,621,575     $1,608,465

 

Revenue at Present Rates                                                                                                                     1,608,465

           

Deficiency at Current Rates                                                                                                                        0

 

Revenue at Proposed Rates                                                                                                               $1,608,465

 

Increase % at Proposed Rates                                                                                                                       0%

 

 

1Based on five years historical and projected data.


 

                                                                                                                                                Exhibit “1b-B”

January 25, 2011

 

 

Village of Mayville

Comparison of Present and Proposed Annual Total Revenues

 

 

 

                                                                                                                                     

            SERVICE                                                                     PRESENT         PROPOSED               %     CLASSIFICATION                                                    REVENUE         REVENUE       INCREASE        

 

 

            Residential  SC1                                                            $ 637,763              $ 653,847            2.5%

 

 

            Small Commercial SC2                                                      92,897                   92,897               0.0%

 

 

            Large Commercial-Primary SC3                                      289,816                 289,816               0.0% 

 

 

            Large Commercial-Secondary SC3                                 243,560                 267,688               9.9% 

 

 

            Large Non-Commercial SC4                                           273,429                 233,217            (14.7%)

 

           

            Security Lighting  SC5                                                      8,857                       8,857              0.0%

 

 

            Street Lighting  SC6                                                         62,143                   62,143               0.0%

 

 

                                                                                               

            Total                                                                            $ 1,608,465          $ 1,608,465               0.0%

 


 

Exhibit “1b-C”

January 25, 2011

                                                             

                                                            Village of Mayville           

                                    Comparison of Present and Proposed Net Monthly Rates

 

                                                                                                                        

            Present¹                                                                                                           Proposed ¹

            Rates                                                                                                       Rates

                                   

 Non-Winter                                                                                                      Non-Winter                      (May-October)                         Residential SC 1                                            (May-October)

      $ 2.25                                Customer Charge                                                  $ 3.91

                                                                                                                                  

      $ .03400                            Energy Charge, per kWh.                                     $ .04490

                                   

 

         Winter                                                                                                             Winter

(November-April                                                                                             (November-April)

                                 

      $ 2.25                                Customer Charge                                                  $ 3.91 

 

                                                Energy Charge, per kWh.

 

      $ .03400                            First 1,000 kWh                                                    $ .04490                $ .04910      1,000 – 2,000 kWh           $ .05860

      $ .04910                            Over 2,000 kWh                                                   $ .06747

 

 

 

 Non-Winter                                                                                                      Non-Winter  

(May-October)                        Small Commercial SC 2                                (May-October)

 

      $ 2.75                                Customer Charge                                                  $ 4.25

                                                                                                                                 

      $ .04730                            Energy Charge, per kWh.                                     $ .05640

                                                           

 

                                               

¹ Average annual purchased power adjustment (PPA) reflected in present and proposed rates.

 

                                                                                                                       


 

Exhibit “1b-C”

January 25, 2011

                                                             

                                                            Village of Mayville           

                                    Comparison of Present and Proposed Net Monthly Rates

 

                                                                                                                        

            Present¹                                                                                                          Proposed ¹

             Rates                                                                                                                 Rates          

                                   

      Winter                                                                                                                   Winter (November-April)             Small Commercial SC 2                          (November-April)

                                 

$ 2.75                                Customer Charge                                                        $ 4.25 

 

      $ .05280                            Energy Charge, per kWh.                                           $ .06397                     

                                                Large Commercial - Primary  SC 3

                       

      $ 3.50                                Demand Charge, per kW                                            $ 3.25

                                                                          

      $ .02080                            Energy Charge, per kWh.                                           $ .03393

 

                                                Large Commercial - Secondary  SC 3

                       

      $ 3.75                                Demand Charge, per kW                                            $ 4.75

                                                                          

      $ .02090                            Energy Charge, per kWh.                                           $ .03461

 

Large Non-Commercial  SC 4

                                                           

      $ 3.50                                Demand Charge, per kW                                            $ 5.00

 

      $ .06530                            Energy Charge, per kWh.                                           $ .05125

 

                                                

¹ Average annual purchased power adjustment (PPA) reflected in present and proposed rates.

                                                                                                                                                               

 

Exhibit “1b-C”

                                                                                                             January 25, 2011

                                                             

                                                            Village of Mayville           

                                    Comparison of Present and Proposed Net Monthly Rates

 

                                                                                                                        

Present ¹                                                                                                                      Proposed ¹

             Rates                                                                                                                  Rates

 

Security Lighting  SC 5

                                                            (Charge per lamp, per month)

 

            $ 2.30                          150 High Pressure Sodium                                           $ 2.88

 

            $ 3.88                          250 High Pressure Sodium                                           $ 4.32

 

            $ 0.00                          400 Mercury Vapor                                                       $ 4.32

  

            $ .02010                      Energy Charge, per kWh.                                             $ .02519

 

                       

                       

Street Lighting  SC 6

                                                                                                           

            $ 4.75                          Facility Charge (per lamp)                                          $ 5.82

 

            $ .02300                      Energy Charge, per kWh.                                           $ .02820

 

 

 

 

¹ Average annual purchased power adjustment (PPA) reflected in present and proposed rates.

 

c.                    Decrease in Westchester County Governmental Customers Rates – Notice of Adoption 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

“The Trustees are requested to approve a modification in the rates for the sale of firm power to the Westchester County Governmental Customers (‘Customers’) in 2011.  This proposed action is consistent with the rate-setting process set forth in the Supplemental Electricity Agreements executed by the Customers and the Authority and in accordance with the State Administrative Procedure Act (‘SAPA’).

“This proposed final action seeks approval to decrease the production rates of the Customers by 16.37% as compared to 2010 rates. The decrease would be effective with the February 2011 bills.

BACKGROUND

At their meeting of September 28, 2010, the Trustees directed the publication in the New York State Register (‘State Register’) of a notice that the Authority proposed to decrease the production rates by 16.37%.  The State Register notice was published on October 20, 2010 and revised to correct an error and republished on November 10, 2010 in accordance with SAPA.  Since this proposal would decrease revenues to the Authority, a public forum was not held.  There were no public comments received and the public record was closed on December 27, 2010.

In addition to the rate decrease, in 2011 the Customers will be subject to an Energy Charge Adjustment, under which the Authority passes through all actual variable costs to the Customers.  This cost-recovery mechanism employs a monthly charge or credit that reflects the difference between the projected variable costs of electricity recovered by the tariff rates and the monthly actual variable costs incurred by the Authority.  This billing mechanism is already in effect and will continue through 2011.

DISCUSSION

As stated in the Notice of Proposed Rulemaking (‘NOPR’), the Customers’ production rates are based on the 2011 pro forma Cost-of-Service (‘COS’).  The projected 2011 COS is $39.76 million and the current or 2010 rate revenues are $47.55 million, resulting in an over-recovery of $7.78 million, or 16.37%.  There have been no changes to the 2011 COS or projected revenues since the NOPR.  The 2010 and final 2011 proposed rates with the 16.37% reduction are shown in Exhibit ‘1c-A.’

FISCAL INFORMATION

The adoption of the 2011 production rate decrease would have no net effect on the Authority’s financial position and would result in an estimated reduction in revenues of $7.78 million, which is offset by the forecasted reduction in costs.  The Energy Charge Adjustment mechanism will protect the Authority’s net revenues from the effects of movements in variable costs above those projected.

RECOMMENDATION

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

The Trustees are also requested to authorize the Senior Vice President – Marketing and Economic Development, or his designee, to issue written notice of adoption to the affected customers.

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

 

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

 

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

 

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

               

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


 


 

d.                   Temporary Assignment and Transfer of Economic Development Power  

               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to approve a temporary assignment and transfer of 3,150 kW of unutilized Economic Development Power (‘EDP’) to Wenner Bread Products Inc.  (‘Wenner’)

 

BACKGROUND

 

“EDP applications are evaluated under criteria that include, but need not be limited to, those set forth in Public Authorities Law Section 184, which sets forth general eligibility requirements.  Among the factors to be considered when evaluating a request for an allocation of EDP for business expansion purposes 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; and the security and stability of employment.

 

“An EDP allocation may also be approved for the purpose of job retention when an applicant, on behalf of a business, demonstrates that the business plans to relocate out-of-state resulting in the loss of a substantial number of jobs, as well as demonstrating its commitment to new investments, among other considerations.  The Town of Islip Industrial Development Agency has submitted a job retention EDP application on behalf of Wenner, a substantial Long Island employer with 450 employees at their facilities in Bayport and Ronkonkama, NY. 

 

“The value of a new allocation of EDP is limited due to the current sourcing of EDP through electricity market purchases.  However, Authority staff has identified an existing EDP customer that is not currently using its full allocation.  Upon the recommendation of the Economic Development Power Allocation Board (‘EDPAB’), on August 29, 1989 the Authority approved an allocation of 12,000 kilowatts (‘kW’) of EDP to Computer Associates International, Inc., now known as CA, Inc. (‘CA’).  CA, also located on Long Island, has indicated that they are willing to assist Wenner by agreeing to a temporary assignment and transfer of a portion of their EDP allocation that they are not currently using.

 

“EDPAB is charged with, among many things, evaluating and recommending allocations and approving transfers of EDP.  At its meeting of January 25, 2011, EDPAB approved and recommended the Authority approve a temporary assignment and transfer of 3,150 kW of EDP to Wenner.

 

DISCUSSION

 

                “Wenner, a family-owned company since its inception in 1956, currently employs 450 persons at its bakery facilities located in Bayport and Ronkonkama, NY.  The company competes nationally in the frozen dough and bread products market, distributing its products all over the country through major grocery operators including Winn-Dixie and Wal-Mart.

 

                “Although preferring to remain on Long Island, Wenner is seriously considering relocating its facilities to the south due to significant competitive cost pressures as a New York State manufacturer.  Aside from the cost of wheat, which increased significantly last year, the high cost of electricity is a major production cost component.  Electricity purchases comprise 7.2% of the company’s total cost of production.  The company manufactures lower margin products in a highly competitive market and they are further constrained in their ability to pass cost increases to their large, national company customer-base, such as Wal-Mart.

 

                “Several years ago, to proactively manage the company’s future, Wenner began to aggressively explore ways of reducing costs.  The company commissioned a study to design and build a new plant in Davidson County, North Carolina.  The final design was submitted with the application.  During the process the company also received incentive offers totaling millions of dollars from various economic development entities to relocate its business to North Carolina. 

                “As an alternative to relocation out-of-state, the company is looking at consolidating bakery operations into one plant in its leased property in Ronkonkama.  If Wenner decided to consolidate into one plant, it would invest $2 million in new energy efficient manufacturing equipment including high-efficiency refrigeration and spiral freezers.  The company would spend an additional $500,000 in construction costs in renovating 72,000 square feet of currently available space in the Ronkonkama facility.  Wenner estimates an additional $750,000 in relocation and moving expenses for total project cost of $3.25 million.  The consolidated and modernized plant would provide cost and manufacturing efficiencies that, along with a lower-cost power allocation, would make the plan economically viable. 

 

                “CA is currently not using all of its EDP allocation, and has agreed, contingent upon approval, to a temporary assignment and transfer of 3,150 kW in order to assist Wenner.  The temporary assignment and transfer, if approved, would run from February 1, 2011 through May 15, 2011, the expiration date of the allocation’s associated Energy Cost Savings Benefits (‘ECSB’) rate discount.  The power and energy associated with the transferred amount would be provided at the same Authority tariff rate applicable to CA’s EDP allocation.  If ECSB were to be extended beyond May 15, 2011, the assignment and transfer could be extended to a new ECSB expiration date upon mutual agreement.

               

                “A temporary transfer of 3,150 kW of unutilized EDP will help Wenner decide to move forward with consolidation plans in New York State instead of relocating the company and its 450 jobs to North Carolina.  Acknowledging that this transfer would be a short-term solution to a decision that requires a long-term investment, the company is hopeful that a new statewide economic development power program is created.  Wenner believes that if the company is able to participate in a new, longer term program offering, it would be able to grow the business and create 50 new jobs in addition to the 450 jobs that would be retained in New York State with this temporary assignment and transfer.

 

RECOMMENDATION

 

“The Manager – Business Power Allocations and Compliance recommends that the Trustees approve the temporary assignment and transfer of 3,150 kW of unutilized Economic Development Power to Wenner Bread Products Inc. as detailed in Exhibit ‘1d-A’ and as provided for in this memorandum.

 

                “The Senior Vice President – Marketing and Economic Development, the Vice President – Marketing and I concur in the recommendation.”

 

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

 

RESOLVED, That the temporary assignment and transfer of 3,150 kW of Economic Development Power, as detailed in Exhibit

“1d-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 Vice Chairman, the President and Chief Executive Officer,  the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions and execute and deliver any and all agreements, certificates and other documents to effectuate the foregoing resolution, subject to the approval of the form thereof by the Executive Vice President and General Counsel, or the designee.

 

 


 

                                                                                                           

 

APPLICATION SUMMARY

 

                                                                        Economic Development Power                                         

  Business Retention Application

 

 

Company:                                                Wenner Bread Products Inc.

 

Location:                                                 Bayport, New York

                                                                            

Submitting Agency:                              Town of Islip Industrial Development Agency

 

Business Activity:                                  Manufacturer of frozen dough and baked bread products

 

Project Description:                              Project involves consolidating bakery facilities into one plant by upgrading and renovating vacant space at Wenner’s leased Ronkonkama facility; installing $2 million worth of equipment, including new refrigeration and spiral freezers and relocating all facility operations to Ronkonkama.

 

Existing Allocations:                            None 

 

Power Request:                                      4,300 kW

                                                  

Power Recommended:                         3,150 kW (Temporary assignment and transfer from unutilized portion                                             of existing allocation)

 

Job Commitment:                                 450 Jobs            

                                                                           

Job Retention/Power Ratio:               143 Jobs/MW

 

Capital Investment:                              $3.25 million

 

Other Assistance:                                   ESDC grant; support from the Town of Islip

 

Summary:                                               Wenner Bread Products Inc. (“Wenner”) is seriously considering relocating its facilities south due to significant competitive cost pressures as a New York State manufacturer.  As an alternative to relocation, the company is looking at consolidating bakery operations into one facility.  Wenner would invest $3.25 million in new manufacturing equipment, construction and relocation costs.  A temporary assignment and transfer of 3,150 kW of currently unutilized Economic Development Power will help Wenner decide to move forward with consolidation plans in New York State.  The temporary transfer would save the company an estimated $68,500 through May 15, 2011.  If Wenner receives the temporary allocation, it will commit to investing in New York instead of relocating the company and its 450 jobs to North Carolina.

 

 


 

e.                    Municipal and Rural Electric Cooperative Economic Development Program Allocation to the Village of Ilion

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

“The Trustees are requested to approve an allocation of 3,250 kW of hydropower under the Municipal and Rural Electric Cooperative Economic Development Program (‘Program’) to the Village of Ilion (‘Village’).

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.  Also, in limited situations where businesses are at risk of closing or moving out-of-state, consideration is given on a case by case basis for the retention of the business in New York.  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 from 100% hydropower and any additional kW at 50% hydropower and 50% incremental power. 

 

“As of October 2010, 26,585 kW have been allocated.  The Village has submitted an application for power under the Program for consideration by the Trustees.

DISCUSSION

 

“An application has been submitted to the Authority by the Village on behalf of Remington Arms Company, Inc. (‘Remington Arms’).  Remington Arms, founded in upstate New York in 1816, is one of America’s continuously operating manufacturers.  Remington Arms is part of the Freedom Group Inc. (‘FGI’) which is owned by Cerberus Capital Management (‘Cerberus’); (FGI and Cerberus may be referred to herein as the ‘Company’).    

 

“The Company currently conducts its business operations through its two main operating subsidiaries, Remington and Bushmaster.  The Company designs, produces and sells sporting goods products for the hunting and shooting sports markets, as well as military, government and law enforcement markets.  The Company maintains ten manufacturing locations and two research facilities within the U.S. and distributes its products throughout the U.S. and 55 foreign countries.  In addition to Remington Arms, the Company owns nine other firearms brands.  The Company competes in the global marketplace.  In addition, as part of the Company’s multi-state network of manufacturing facilities in the U.S., Remington Arms’ Ilion plant competes with the Company’s other locations in Kentucky, Arkansas, Missouri and Maine on a comprehensive cost basis.

 

“In December 2007, the Company acquired Marlin Firearms Company of North Haven, CT.  In May 2010, the Company announced that the Marlin facility would be closed and that selected relocation sites were Hickory, Kentucky and Ilion, NY.  Remington Arms, although located within the franchise area of the Village’s electric system, currently receives its electric service from National Grid due to the terms of a unique historical agreement.  Remington Arms has requested that it be annexed to the Village’s electric system and advised that the cost of electricity is one of the major factors of consideration within its relocation model.  The Company is considering two options for the Remington Arms Ilion facility: the first is serious consideration to closing the entire facility and relocating out-of-state where competitive cost advantages on fundamental inputs such as electricity can be obtained and the second is to invest approximately $7.5 million to upgrade and expand its existing one million square-foot production facility in Ilion, including payment of exit fees to National Grid, so that service of the company’s electric load can be obtained from the Village which has committed to provide a significantly lower electric rate to Remington Arms.  Remaining and expanding in Ilion means the addition of 70 new jobs to the existing 900 jobs, an overall job retention of up to 970 jobs.  The expanded electric load will increase by approximately 1000 kW from an average monthly peak of 5400 kW to 6400 kW.

 

“The presence of Remington Arms in Ilion since 1816 has been vital to the Village and Central New York.  The history and economic development of the Village has been shaped almost exclusively by Remington Arms and the jobs and tax revenue it generates.  Empire State Development (‘ESD’) has offered Remington Arms an Incentive Proposal valued at $1.455 million, subject to final board approval; NYS Empire Zone benefits of up to $788,000 may be available.

 

“It is recommended that the Trustees approve an allocation of 3,250 kW of Municipal/Cooperative Economic Development Power to the Village on behalf of Remington Arms.  This allocation is equivalent to 298 jobs per MW of hydropower.  Per the program guidelines, a minimum of 200 jobs per MW of hydropower should 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 Vice President – Marketing, recommends that the Trustees approve the allocation of power under the Municipal and Rural Electric Cooperative Economic Development Program to the Village of Ilion in accordance with the above.

 

“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 power to the Village of Ilion 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, or the designee; and be it further

 

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

  
 

f.                    Lease of Office Space – New York City Office –  501 Seventh Avenue

                                

                                                 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize the execution of a Lease Modification Agreement with 501 Seventh Avenue Associates (Landlord) for office space on the 9th floor of 501 Seventh Avenue, (Building), New York, New York.  This Lease Modification would extend for an additional one-year period, the Authority’s lease of 7,185 rentable square feet from September 1, 2011 to August 31, 2012 at a fixed annual rental of $276,622.50 ($38.50 per rentable square foot). 

 

BACKGROUND

 

                “At their meeting of December 14, 1999, the Trustees approved the execution of a lease between the Landlord’s predecessor-in-interest and the Authority which certain lease dated March 3, 2000 demised to the Authority the entire 8th and 9th floors in the building.  The Trustees subsequently approved, by action dated March 23, 2010, a Lease Modification Agreement and Partial Lease Surrender Agreement which was executed on May 4, 2010 pursuant to which, among other things, Tenant surrendered the entire 8th floor and the majority of the 9th floor then being leased by the Authority.  Further, it allowed the Authority to lease 7,185 rentable square feet located on the 9th floor of the Building for the period May 1, 2010 through August 31, 2011.  The annual rental for this term was $276,622.50.

 

DISCUSSION

 

                “The Authority has had a long-term presence in the New York City area.  Until 1988, it held leasehold premises at 10 Columbus Circle located off Central Park West.  Thereafter, it maintained office space at 1633 Broadway and since 2000, the Authority has maintained swing office space at 501 7th Avenue.  Major users of this swing office space include Marketing and Economic Development and Energy Services and Technology.  Other users include the Authority’s Legal, Public and Governmental Affairs, Executive Office and Power Supply Departments.  These groups find it useful to maintain this swing office space for operations in and around the New York City area.

 

FISCAL INFORMATION

 

“The Authority pays its lease obligations out of its Operating Fund.  The fixed annual rental for 7,185 rsf without electricity, taxes and operating expenses will be $276,622.50.

 

RECOMMENDATION

 

                “The Director – Real Estate and the Director – Corporate Support Services recommend that the Trustees approve entering into a Lease Modification Agreement with 501 Seventh Avenue Associates for commercial office space at 501 Seventh Avenue, New York, New York, on terms substantially in accordance with the foregoing.

 

“The Vice President – Enterprise Shared Services and I concur in the recommendation.”

 

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 Vice President – Enterprise Shared Services hereby are, authorized to enter into a Lease Modification Agreement  for office space at 501 Seventh Avenue, New York, New York, with 501 Seventh Avenue Associates on substantially the terms set forth in the foregoing report of the President and Chief Executive Officer and subject to the approval of the Lease Modification Agreement documents by the Executive Vice President and General Counsel, or the designee; and be it further

 

RESOLVED, That the Vice President – Enterprise Shared 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, or the designee; 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, or the designee.

 

 

 

g.                   Marcy -South Static Wire Rehabilitation – Contract Award                                

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to award a two-year contract to Michels Power of Neenah, WI in the amount of $431,307 to rehabilitate four sections of overhead ground wire (‘OHGW’) on the Marcy-South Transmission Line (‘M-S Line’).

 

BACKGROUND

 

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

 

The M-S Line is a 207 mile-long 345 kV transmission line that was placed into service in 1988 and interconnects the Authority’s Marcy Substation with five multi-utility substations.

 

“During the winter season, the M-S Line experienced numerous outage events because of insufficient clearance between the OHGW and conductor from elongation and loss of elasticity caused by ice loading.  At this time, there are four spans requiring rehabilitation to improve its performance and avoid outages during ice loading events.

 

DISCUSSION

 

“The Authority issued an advertisement to procure bids in the New York State Contract Reporter and bid packages were available as of September 13, 2010.  The bid documents were downloaded by 40 firms; five firms participated in a site visit on September 28, 2010.

 

The following two proposals were received on October 26, 2010:

 

                                                                                                                             Base Bid

Bidder                                   Location                               (includes bonds)

 

Michels Power                     Neenah, WI                          $431,307

 

Hawkeye, LLC                    Hauppauge, NY                   $616,900

 

“Following a review of the proposals, Authority staff recommends an award to the lowest-priced and technically-qualified bidder, Michels Power.  Michels Power was founded in 1949 and has executed overhead transmission work for other utilities.  Michels Power has experience in line relocations, re-conductoring and live-line work.

 

“The work will be performed over a two-year period with the two most critical spans being performed in 2011 and the remaining spans in 2012.

 

FISCAL INFORMATION

 

                “Payments will be made from the Authority’s Operating Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Senior Vice President – Transmission, the Vice President – Project Management and the Vice President – Procurement, recommend that the Trustees authorize the amount of $431,307 for the award of a contract to Michels Power of Neenah, WI, to rehabilitate four sections of overhead ground wire on the Marcy-South Transmission Line.

 

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

 

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

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a contract to Michels Power of Neenah, WI, in the amount of $431,307, as recommended in the foregoing report of the President and Chief Executive Officer, in the amount listed below:

 

Contractor

Michels Power,

Neenah, WI

Contract Approval

$431,307

 

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, or the designee.


 

h.                   Energy Commodity Risk Analysis Software Solution 

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize expenditures of $0.8 million for the implementation, hosting and support of an Energy Commodity Risk Analysis Software Solution in 2011.  The Trustees are also requested to provide authorization for an additional expenditure of $1.1 million for continued hosting and support of the system through 2015.

 

“In accordance with the Authority’s Expenditure Authorization Procedures, Trustees’ approval is required for the award of personal services contracts in excess of $1 million, if low bidder, or $500,000 if sole-source or non-low bidder.

 

“On August 2, 2010, the Authority solicited bids for an Energy Commodity Risk Analysis Software Solution under Request for Proposal (‘RFP’) inquiry Q10-4834dg.  Interested vendors were requested to submit proposals for implementation, support and hosting of a software solution to provide an executive risk metrics dashboard and associated risk reports.  The software solution would include a database for energy commodity market forward prices and existing risk hedge transactions, as well as provide for automatic daily updates quantifying energy related commodity market risk, counterparty default exposure and Authority collateral requirement risks.  Availability of this risk information should enable Authority staff to more efficiently manage these risks.  

 

BACKGROUND

 

“At their meeting of September 28, 2010, the Trustees approved the revised Governing Policy for Energy Risk Management (the ‘Policy’).  The Policy established an Executive Risk Management Committee (‘ERMC’), chaired by the Executive Vice President – Chief Financial Officer and consisting of the chair and four other Authority executives appointed by the President and Chief Executive Officer.  The Policy authorized the ERMC to establish and administer a well-structured and controlled set of activities for mitigating unwanted effects of volatility in the energy commodity markets to which the Authority and its customers are routinely exposed.  These activities are collectively referred to as the Energy Risk Management Program (the ‘Program’).

 

“At their meeting of October 22, 2010, the ERMC established the Procedures Regarding Risk Management outlining all management authorizations, directives, mandates, discretion and controls necessary and appropriate to conduct the Program within the guiding principles set forth in the Board-approved Policy.  Implementation of the Program requires the timely and consistent quantification of commodity market risk, counterparty default exposure and Authority collateral requirement risks and the management of those risks.  At present, staff maintains an internally developed database detailing commodity forward market prices and existing hedge transactions and utilizes a combination of desktop risk software and spreadsheets to analyze commodity risk.  The current approach precludes the update frequency considered necessary under the Program and requires that resources be dedicated to computational efforts rather than review and management of the implications of that risk. 

 

DISCUSSION  

 

“On August 2, 2010, the Authority solicited bids for an Energy Commodity Risk Analysis Software Solution under RFP Q10-4834dg.  The RFP outlined requirements for a risk system to be implemented and hosted by the vendor during the period beginning in 2011 and continuing at the Authority’s option either through 2013 or 2015.  Bidders were initially requested to respond by September 14, 2010; in response to bidder requests, the response date was extended to September 21, 2010. 

 

“The RFP was downloaded from the Authority’s website by fifty interested respondents of which six submitted a proposed software solution.  The technical sections of all six bids, without pricing details, were distributed to an evaluation team consisting of representatives from the Authority’s departments most closely involved with the Program work processes.  In addition, an outside consultant advisor to the ERMC assisted the evaluation team.  The team determined that two of the bids did not fully respond to requirements of the RFP and these bids were eliminated from further consideration.  The remaining four bidders were invited to present/demonstrate details of their proposed software solution.  The evaluation team was provided details of the proposed costs associated with each of the remaining bidders.  Based on the information provided within the proposals and during the presentation/demonstrations, the evaluation team determined that two of the remaining bidders did not adequately demonstrate that the various software products, proposed as the software solution, could be seamlessly integrated with one another and were thus eliminated from further consideration.  The evaluation team was fully confident that either of the two remaining bidders could implement and support the software solution sought under the Authority’s RFP.  The evaluation team presented its assessment to the ERMC and recommended an award to Pace Global Energy Risk Management, LLC (‘Pace Global’) of Fairfax, VA, the lowest-cost qualified bidder.  The ERMC supports this recommendation.

 

FISCAL INFORMATION

 

                “Payments associated with this project will be made from the Operating Fund.  The expenditures for system implementation, hosting and support during the current year have been included in the 2011 approved O&M budget.  Expenditures for future years will be included in future year budgets.

 

RECOMMENDATION

 

                “The Manager – Risk Reporting recommends that the Trustees approve the award of $1.9 million to Pace Global Energy Risk Management, LLC for the implementation, support and hosting of the Energy Commodity Risk Analysis Software Solution solicited under Request For Proposal (‘RFP’) inquiry Q10‑4834dg.  The duration of the recommended services contract is through 2015.  

 

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

 

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

 

RESOLVED, That Expenditures are hereby approved in accordance with the Authority’s Expenditure Authorization Procedures, as recommended in the foregoing report of the President and Chief Executive Officer, in the amount of $1.9 million for the purpose of the implementation, support and hosting services associated with an Energy Commodity Risk Analysis Software Solution as recommended for award under the Request For Proposal (“RFP”) inquiry No Q10-4834dg; 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, or the designee.

 


 

 

i.                     Information Technology Initiatives – Capital Expenditure Authorization Request

                               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize capital expenditures of $4.725 million for the implementation of Information Technology (‘IT’) Initiatives in 2011 as per the Authority’s Expenditure Authorization Procedures (‘EAPs’).  These expenditures have been included in the 2011 approved Capital budget.

 

BACKGROUND

 

“In accordance with the Authority’s EAPs, the award of non-personal services or equipment purchase 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 Trustees’ approval.

“For each of the past 12 years, in concert with the Business Units, IT has developed a list of initiatives designed to meet business needs by taking advantage of evolving technology applications.  These application developments have been funded from a capital program called IT Initiatives.  This capital program, which has often totaled less than $3 million annually, has been approved by the Trustees in the Authority’s Capital budget each December with funds later authorized and released by the President and Chief Executive Officer during the budget year.  Since the request for 2011 is greater than $3 million, Trustee approval is requested as per the Authority’s EAPs.

 

DISCUSSION  

 

“The following lists the 2011 IT Initiatives, along with the estimated cost of each:

 

The SAP R/3 environment will be configured to add new features to the existing HR system to include an upgrade of the Human Capital Management module, succession planning, performance metrics and compensation management.  These enhancements will facilitate a reduction of paper, improved workflow and greater efficiencies in HR operations.

 

This represents the next phase of an effort to provide all staff access to corporate information in readily available ‘Data Marts’ designed for their use.  This includes the rollout of new desktop tools and training.

 

 

Major expansion of the Authority’s internal communication capabilities to allow video conferencing, ‘smart boards’ and web meetings to be conducted in all major conference rooms.  These enhancements will improve meetings and reduce the need for travel time and costs.

 


 
  • Asset Investment Decision Optimization System                                                       $  250,000

Support tool for use, within Power Supply, in prioritization and selection of capital and non-recurring projects.  Analysis software for effective investment decision-making, which will allow staff to quantify benefits, project risks and consider additional impacts if projects are deferred.

 

 

Total      $4,725,000

FISCAL INFORMATION

 

                “Payments associated with these projects will be made from the Capital Fund.

 

RECOMMENDATION

 

                “The Vice President Information Technology/Chief Information Officer recommends that the Trustees approve the Capital Expenditure Request for $4.725 million for Information Technology Initiatives.

 

                “The Chief Operating Officer, the Executive Vice President and Chief Financial Officer, the Executive Vice President – Energy Marketing and Corporate Affairs, the Vice President – Enterprise Shared Services and I concur in the recommendation.”

 

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

 

RESOLVED, That Capital Expenditures are hereby approved in accordance with the Authority’s Expenditure Authorization Procedures, as recommended in the foregoing report of the President and Chief Executive Officer, in the amount and for the purpose listed below:

 

Expenditure

Capital                                                  Authorization

 

Information Technology

Initiatives 2011                                     $4,725,000

 

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, or the designee.


 

2.                   Discussion Agenda

 

a.          Report of the President and Chief Executive Officer

 

President Richard Kessel reported that the Authority is in a strong financial position despite the economy and the challenges it faced.  Its ratings have been reaffirmed; Operations is doing well and critical positions are being filled.  He also reported that after a two-year effort Alcoa was opening its Eastern Plant and it should be fully operational by summer of this year.  The Authority is also in discussions with Alcoa to expedite the process for the expansion and modernization of the facility.  President Kessel said that he is looking forward to working with the Board in the New Year.

President Kessel’s community outreach activities include:

·         Speaker Argyle Forum (12/14)

·         Meeting with Alcoa; Chief Randy Hart of Akwasasne Mohawks, Rich Marshall, Friends of Nature Center (12/16)

·         News Conference with PEP on Expansion and Replacement Power hydro contracts; meeting with Mayor Byron Brown of Buffalo (12/22)

·         Meeting with TDI (1/4)

·         Meeting with Governor’s office re: Alcoa; State of the Senate (1/5)

·         News Conference with Lt. Governor Duffy and Alcoa’s Thuestadt (1/7)

·         Survey damage at Harlem River Plant (1/12)

·         Meeting with environmentalists (1/13)

·         Meeting with Mayor Miner; meeting with County Executive, Joanie Mahoney (1/20)

 


 

b.                   Report of the Chief Operating Officer

 

        Mr. Gil Quiniones provided highlights of the report to the Trustees.

 

                In response to a question from Trustee Eugene Nicandri, Mr. Quiniones said that the primary indicator for flows come from the snow, rainfall and the Great Lakes flowing into the Authority’s power projects; however, it is not the major driver for water levels.

 


 

c.                    Report of the Chief Financial Officer

                               

Ms. Elizabeth McCarthy provided highlights of the financial report to the Trustees.

 

In response to a question from Chairman Michael Townsend, Ms. McCarthy said that the Authority is in a very strong liquidity position despite the low flows and low energy prices.

 
 

3.                   Transmission Lines – Spacer and Damper Replacements – Capital Expenditure Authorization Request and Contract Award   

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize a Capital Expenditure Authorization Request (‘CEAR’) in the amount of $4.3 million for the replacement of degraded parts on the 765 kV, Massena-Chateaugay (MSC-7040) and Massena-Utica (MSU-1) transmission lines.  Approximately 13,000 conductor bundle spacers and 2,600 vibration dampers on the static wire need to be replaced.  The Trustees are also requested to approve the award of a contract to Haverfield Aviation, Inc. (‘Haverfield’) of Gettysburg, PA, in the amount of $3.1 million to perform this work for the period 2011 and 2012.

 

BACKGROUND

 

“Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts require 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 purchase contracts in excess of $3 million require Trustees’ approval.

 

“The 765 kV transmission lines operate between the Authority’s Massena Substation near the St. Lawrence/FDR Power Project, Chateauguay near Montreal, and the Marcy Substation.  The lines were put into service in 1978.  An inspection conducted by an outside consultant identified that many of the conductor bundle spacers originally installed were bent and damaged.  Installation of new conductor bundle spacers will provide damping of wind-induced vibration on the transmission lines and reduce resultant damage caused by its effects.

                                                               

DISCUSSION

 

“The Authority issued an advertisement to procure bids in the New York State Contract Reporter and bid packages were available as of September 10, 2010.  The bid documents were downloaded by 48 firms; seven firms participated in a site visit on September 28, 2010.

 

“The following firms submitted proposals on October 26, 2010:

 

-          Haverfield Aviation, Inc.

        Gettysburg, PA

 

-          PAR Electrical Contractors, Inc.

        Kansas City, MO

 

-          KT Power, Inc.

        Waddington, NY

 

-          Northline Utilities, LLC

        Au Sable Forks, NY

 


 

“Following post-bid addendums and clarifications, the firms submitted final pricing as follows:

 

 

OPTION 1A

- ACA Type -

(100% 2011)

OPTION 1B

- PLP Type -

(100% 2011)

OPTION 2A

- ACA Type -

(50% 2011; 50% 2012)

OPTION 2B

- PLP Type -

(50% 2011; 50% 2012)

Haverfield Aviation, Inc.

Gettysburg, PA

 

$3,046,520

$3,064,306

$3,046,520

$3,064,306

PAR Electrical Contractors, Inc.

Kansas City, MO

 

$5,577,750

$5,637,550

$6,128,549

$6,196,149

KT Power, Inc.    

Waddington, NY

 

$7,880,720

$8,830,320

$7,852,320

$9,490,320

Northline Utilities, LLC

Au Sable Forks, NY

$7,912,300

$7,990,300

$7,923,600

$8,001,600

 

“Authority staff recommends an award to the lowest-priced and technically-qualified bidder, Haverfield.  Haverfield is a leading provider of aerial power line inspection and maintenance services to the electric power industry in the USA and has over 25 years of experience on systems up to 765 kV.  Haverfield uses helicopters for the purpose of performing work on energized transmission lines.  The company has successfully executed other projects for the Authority in the past such as annual inspections and repairs on the 765 kV transmission lines.

 

“The work will be performed over a two-year period with half of the new conductor bundle spacers being installed in 2011 and the remaining half in 2012.

 

“Funding has been included in the 2011 approved Capital Budget.  Funding for the work to be performed in 2012 will be included in the Capital Budget request for that year.

 

“The total CEAR amount over the two-year period is estimated at $4.3 million, as follows:

 

                                Engineering/Design                              $   200,000

 

                                Construction/Installation                   $3,630,000

 

                                Authority Direct Expenses                 $   265,000

 

Authority Indirect Expenses              $   204,800

                               

                                                TOTAL                                  $4,299,800

 

                “The CEAR includes amounts in excess of the contract award to cover engineering and construction support, contingency and overhead costs.

 

FISCAL INFORMATION

 

                “Payments will be made from the Authority’s Capital Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Senior Vice President – Transmission, the Vice President – Project Management and the Vice President – Procurement, recommend that the Trustees authorize capital expenditures in the amount of $4.3 million and the award of a contract to Haverfield Aviation, Inc. in the amount of $3.1 million to replace the conductor bundle spacers on the 765 kV, Massena-Chateaugay (MSC-7040) and Massena-Utica (MSU-1) transmission lines.

 

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

 

Mr. Andy Cline provided highlights of staff’s recommendation to the Trustees.  In response to a question from Vice Chairman Jonathan Foster, Mr. Cline said that Haverfield Aviation Inc. has experience in aerial power line inspection and has done work for the Authority in the past.

In response to a question from Chairman Townsend, Mr. Cline said that the work performed by Haverfield in the past was done well.

In response to a question from Trustee Nicandri, Mr. Cline said that the work will be performed over two years.

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

               

  RESOLVED, That expenditures are hereby approved in accordance with the Authority’s Expenditure Authorization Procedures, for capital expenditures in the amount of $4.3 million for the replacement of approximately 13,000 conductor bundle spacers and 2,600 dampers on the static wire on the 765 kV transmission lines for the period 2011 and 2012; and be it further

 

RESOLVED, That pursuant to the Guidelines for Procurement Contracts adopted by the Authority, approval is hereby granted to award a contract to Haverfield Aviation, Inc. of Gettysburg, PA, as recommended in the foregoing report of the President and Chief Executive Officer, in the amount listed below:

 

Contractor

Haverfield Aviation, Inc.

Gettysburg, PA

Contract Approval

$3.1 million

 

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

 


 

4.                   Procurement (Construction) Contract – Installation of Standby/PLM Generators in Grand Central Terminal – Award

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

               

                “The Trustees are requested to approve the award of a contract to Danco Electrical Contractor, Inc., (‘Danco’) a New York State certified minority-owned business, in the amount of $9.355 million to install two

2-MW Standby/Peak Load Management Generators and associated equipment in Metro-North Railroad’s (‘MNR’) Grand Central Terminal.

 

                “Funding will be provided from previously approved funds in the Energy Services and Technology Governmental Energy Services Program account and will be fully recovered from MNR pursuant to the existing Energy Services Program Agreement between the Authority and the Metropolitan Transportation Authority.

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.

                “In 2008, MNR authorized the Authority to proceed with design of two 2-MW standby generators for Grand Central Terminal.  The generators will be available for standby power in the event of a grid power outage or for Peak Load Management (‘PLM’) during periods of peak demand on the grid.  In 2009, estimated prices for the project exceeded MNR’s available funding.  As a result, the Authority and MNR undertook a value engineering effort and redesigned the project.  As the redesign was proceeding, the Authority received MNR’s approval to award contracts to purchase the generators and associated major equipment.  Those contracts are underway.

DISCUSSION

                “On June 30, 2010, the Authority advertised a Request for Proposals (‘RFP’) in the New York State Contract Reporter soliciting proposals to install two 2-MW standby generators and associated equipment in Grand Central Terminal.  A mandatory bidders’ site visit was conducted on July 14 and July 28, 2010 to review the proposed scope-of-work and provide an opportunity for potential bidders to observe site conditions.  Bidders’ questions and requests for clarification were required to be submitted in writing and responses were issued to all bidders via an addendum.  Twenty-two firms attended the site visit.

               

                “Seven firms submitted bids as follows:

 

                                Bidder                                                         Base Bid                           Optional Items

 

Danco Electrical Contractor, Inc.                     $   9,335,000.00                   $ 280,000.00

TC Electric                                                            $   9,721,618.27                   $ 340,278.00

T. Moriarity & Sons, Inc.                                   $ 10,417,500.00                  $ 360,000.00

TAP Electrical Contracting Service, Inc.         $ 10,678,722.50                  $ 277,172.50

Mass Electric Construction Co.                        $ 11,113,000.00                  $ 478,000.00

Tru-Val Electric Corp.                                         $ 14,470,000.00                  $ 364,000.00

Five Star Electric Corp.                                       $ 21,348,019.00                  $ 650,000.00

 

“A bid evaluation team, including a representative from MNR, was formed.  The team evaluated all of the bids and met with the two lowest bidders.  The Selection Committee rated the bids on technical ability, price, experience and bid quality. 

 

“During the bid evaluation, MNR advised the Authority that the bids exceeded their available funding for the project.  Authority staff reviewed this with MNR and embarked on an additional value engineering effort with the two lowest bidders.  They were asked to review their pricing and identify any potential opportunities for cost savings.  These two bidders were then issued identical scope reduction items and were requested to advise the Authority of any additional cost saving recommendations for NYPA/MNR consideration.  The results of this effort were:

 

                                                Bidder                                         Base Bid                           Optional Items

                               

Danco Electrical Contractor              $  9,075,000.00                    $ 280,000.00

TC Electric                                            $  9,500,934.27                    $ 340,278.00

                “The bid evaluation team recommended award to the lowest responsive bidder, Danco.  MNR will be using a Federal Homeland Security grant to fund most of the project.  The grant deadline requires completion in October 2011.  It was necessary to have the contractor mobilize immediately upon completion of the bid evaluation in order to meet this tight project schedule.  Accordingly, in late December 2010, pursuant to the Authority’s Expenditure Authorization Procedures, the President and Chief Executive Officer approved an interim award to Danco in the amount of $2.5 million to allow Danco to proceed immediately with mobilization, site preparation and staging.

FISCAL INFORMATION

               

                “Funding for this contract will be provided from the proceeds of the Authority’s Commercial Paper Notes and/or the Operating Fund.  All Authority costs, including Authority overheads and the costs of advancing funds, will be recovered consistent with other Energy Services and Technology Programs.

 

RECOMMENDATION

               

                “The Acting Senior Vice President – Energy Services and Technology and the Director – Engineering and Design recommend that the Trustees approve a contract award in the amount of $9.355 million to Danco Electrical Contractor, Inc., to install two 2-MW Standby/Peak Load Management Generators and associated equipment in Metro-North Railroad’s Grand Central Terminal.

 

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

 

Mr. Paul Belnick provided highlights of staff’s recommendation to the Trustees.   In response to questions from Trustee Nicandri, Mr. Belnick said that the generators were standby units and that Metro-North would repay the Authority all costs incurred on the project.

                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 and the Authority’s Expenditure Authorization Procedures, the Trustees hereby authorize the award of a contract in the amount of $9.355 million to Danco Electrical Contractor, Inc., to install two 2-MW Standby/Peak Load Management Generators and associated equipment in Metro North Railroad’s Grand Central Terminal; and be it further

 


 

RESOLVED, That Commercial Paper and Operating Fund Monies will be used to finance the contract costs in the amounts and for the purposes listed below:

 

                                                Commercial Paper/                           Expenditure Authorization

                                                Operating Funds                                         (not to exceed)                 

 

                          Installation of Two 2-MW

                          Standby/PLM Generators                                     $9,355,000

 

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


 

5.                   Contribution of Funds to the State Treasury

 

The President and Chief Executive Officer submitted the following report:

SUMMARY 

“The Trustees are requested to approve a contribution in the amount of $25 million to the State’s general fund as authorized by legislation approving the 2010-11 Budget of the State of New York (Chapter 56 of the Laws of 2010).   

 

BACKGROUND

 

“The Authority is requested, from time to time, to make financial contributions and transfers of funds to the State or to otherwise provide financial support for various State programs.  Such financial support has come in the form of direct transfers to the State’s general fund, rebates to customers of the Power for Jobs (‘PFJ’) Program, the provision of below-cost energy to the beneficiaries of the State’s Energy Cost Savings Benefits Program and contributions toward the operation and maintenance expenses for State parks in the vicinity of the Niagara and St. Lawrence projects. 

 

“Any such contribution or transfer of funds must (1) be authorized by the Legislature; (2) be approved by the Trustees ‘as feasible and advisable’ and (3) satisfy the requirements of the Authority’s General Resolution Authorizing Revenue Obligations dated February 24, 1998, as amended and supplemented (‘Bond Resolution’).  The Bond Resolution’s requirements to withdraw monies ‘free and clear of the lien and pledge created by the [Bond] Resolution’ are such that withdrawals (a) must be for a ‘lawful corporate purpose as determined by the Authority,’ and (b) the Authority must determine, taking into account, among other considerations, anticipated future receipt of revenues or other moneys constituting part of the Trust Estate, that the funds to be so withdrawn are not needed for (i) payment of reasonable and necessary operating expenses, (ii) an Operating Fund reserve for working capital, emergency repairs or replacements, major renewals or for retirement from service, decommissioning or disposal of facilities, (iii) payment of, or accumulation of a reserve for payment of, interest and principal on senior debt or (iv) payment of interest and principal on subordinate debt.

DISCUSSION

 

“Governor Paterson proposed in his State Fiscal Year (‘SFY’) 2010-11 Executive Budget Plan, legislation authorizing the Authority as deemed ‘feasible and advisable by its trustees’ to make $65 million in payments to the State, which is to ‘be utilized for economic development, energy efficiency or energy cost mitigation purposes.’   The legislation approving the State Budget authorized the Authority’s payment of $40 million by June 2010, with the remaining $25 million to be considered for payment by January 2011.  At their June 29, 2010 meeting, the Trustees authorized and the Authority subsequently transferred the initial $40 million payment. 

 

“Under consideration today is the remaining $25 million amount, which has been linked in the State Budget to the establishment of a small business revolving loan fund.  The 2010-11State Budget appropriated $25 million for the New York State Urban Development Corporation to support such a fund with the proviso that, ‘No moneys of the state in the state treasury or any of its funds shall be expended from this appropriation until a miscellaneous receipt is provided from the New York Power Authority…’.  

 

“Staff has reviewed the effects of such a transfer of funds on the Authority’s expected financial position and reserve requirements, the primary business criteria used to evaluate potential transfers.  Given the current financial condition of the Authority, its estimated future revenues, operating expenses, debt service and reserve requirements, staff is of the view that it will be feasible for the Authority to make the contribution of $25 million by January 31, 2011.  The transfer of these funds was anticipated and reflected in the Authority’s 2011 Operating Budget approved by the Trustees at their December 13, 2010 meeting.

 


 

FISCAL INFORMATION

 

“Staff has determined that sufficient funds are available in the Operating Fund to transfer $25 million to the State’s general fund at this time and that such Authority funds are not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s Bond Resolution. 

RECOMMENDATION

“The Senior Vice President – Corporate Planning and Finance recommends that the Trustees affirm that the transfer to the State Treasury of $25 million is feasible and advisable and authorize such transfer.

 

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

 

Mr. Donald Russak provided highlights of staff’s recommendation to the Trustees.

Trustee Mark O’Luck stated that using the contribution to establish a program for small business development, instead of toward the general fund, was good for economic development growth.

In response to a question from Chairman Townsend, Mr. Arthur Cambouris said that although the Authority still has litigation pending with regards to the Niagara County case, there is no pending injunction or restraining order against the Authority.  Therefore, pursuant to the budget legislation, this contribution of funds to the state treasury is a lawful corporate purpose for the Authority.

Trustee Nicandri opined that the fact that the contribution is earmarked for a specific function is a movement in the right direction; however, his concerns with regards to its feasibility and advisability persists; therefore, he intends to vote in the negative on this motion.

Chairman Townsend said that he and the other Trustees shared the concerns of Trustee Nicandri.

The following resolution, as submitted by the President and Chief Executive Officer, was adopted by a vote of 4-1, with Trustee Eugene Nicandri voting “no.”

 

RESOLVED, That the Trustees hereby authorize a payment to the State Treasury of $25 million from the Operating Fund as authorized by Chapter 56 of the Laws of 2010 and discussed in the foregoing report of the President and Chief Executive Officer; and be it further

 

RESOLVED, That the amount of $25 million to be used for the contribution to the State Treasury described in the foregoing resolution is not needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That as a condition to making the payment specified in the foregoing resolutions, on the day of such payment the Treasurer or the Deputy Treasurer shall certify that such monies are not then needed for any of the purposes specified in Section 503(1)(a)-(c) of the Authority’s General Resolution Authorizing Revenue Obligations, as amended and supplemented; and be it further

 

RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer, the Executive Vice President – Chief Financial Officer, the Senior Vice President – Corporate Planning and Finance, the Corporate Secretary, the Treasurer and all other officers of the Authority be, and each of them hereby is, authorized and directed, for and in the name and 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 that they, or any of them, may deem necessary or advisable to effectuate the foregoing resolutions, subject to approval as to the form thereof by the Executive Vice President and General Counsel, or the designee.

 


 

6.                   Policy for the Use of Interest Rate Exchange Agreements

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

 

“The Trustees are requested to adopt a Policy for the Use of Interest Rate Exchange Agreements (the ‘Policy’), attached hereto as Exhibit ‘6-A,’ which establishes the framework, objectives and overall authority for governing activities relating to the Authority’s interest rate risk management program.   

BACKGROUND

 

“To effectively manage its capital structure, the Authority periodically utilizes financial derivative instruments with the objective of mitigating the impact of interest rate exposure on its earnings and cash flows and to minimize debt costs.  The financial derivative instruments used to mitigate interest rate exposure are in the form of Interest Rate Exchange Agreements (the ‘Agreement’) entered into with Qualified Swap Providers (a ‘Counterparty’) as defined in the Authority’s General Resolution authorizing Revenue Obligations adopted on February 24, 1998 (the ‘Resolution’).  The Authority presently has two open variable-to-fixed interest rate swaps and one interest rate cap on a portion of its tax-exempt variable rate debt in an aggregate notional amount of $557 million.  These open positions have mitigated net variable rate debt exposure to approximately twelve percent.

 

“The Authority’s Board of Trustees, with review and recommendation by the Finance Committee, has authority to approve all Interest Rate Exchange Agreements presented by staff.  In response to today’s focus on stronger corporate governance, transparency and enhanced reporting requirements, staff, along with a recommendation by the Authority’s internal audit department, has decided to formalize a policy governing the use of these Interest Rate Exchange Agreements.  The Policy will provide the overall framework for delegation of authority; allowable interest rate hedging instruments; counterparty qualifications and diversification; reporting standards, as well as the requirement to establish procedures for the administration of the Interest Rate Exchange program.  

DISCUSSION

 

“The Policy being requested for adoption includes the standards by which Interest Rate Exchange Agreements will be managed.  The Policy includes the following key provisions:

 

1.       A delegation of authority to the President and Chief Executive Officer or Executive Vice President and Chief Financial Officer to determine whether an Agreement meets specific risk mitigation criteria and objectives as established by the Policy.  

 

2.       Authorizes the Executive Vice President and Chief Financial Officer and Treasurer to establish procedures.

 

3.       Establishes counterparty qualifications including minimum credit ratings criteria and experience with financial derivative products in the municipal marketplace.  Except as the Board of Trustees shall have expressly approved, the Authority will not enter into Agreements having a term greater than one year with any single counterparty in an aggregate notional amount greater than $250 million. 

 

4.       Sets forth the specific derivative instruments the Authority may utilize in managing its interest rate exposure including interest rate swaps (both fixed to variable and variable to fixed); basis swaps; interest rate caps and collars; forward rate transactions, or any other transaction as permitted under the Resolution.

 

5.       Requires a quarterly report to the Trustees and Finance Committee with the activities and results of the Interest Rate Exchange program.

 

“This Policy, as well as the procedures to be established, will be coordinated with the Governing Policy for Energy Risk Management and the Energy Risk Assessment and Control group to manage overall credit, collateral and liquidity risk at the enterprise level.

 

RECOMMENDATION

 

                “The Treasurer recommends that the Trustees approve the Policy for the Use of Interest Rate Exchange Agreements attached as Exhibit ‘6-A’ and discussed above.

 

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

 

Mr. Brian McElroy presented highlights of staff’s recommendation to the Trustees.  In response to a question from Trustee Nicandri, Mr. McElroy said that the open positions, as referenced in the first paragraph of the report, have mitigated net variable rate debt exposure to approximately 12%.  In response to another question from Trustee Nicandri, Mr. Elroy said that the Authority has no formal target; however, the Authority’s net exposure is within the 10% - 15% target threshold acceptable by the rating agencies.

In response to a question from Trustee O’Luck, Mr. McElroy said that staff would first seek the Board’s approval if they plan to deviate from the Policy governing interest rate risks, as approved by the Finance Committee.

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

 

RESOLVED, That the Policy for Use of Interest Rate Exchange Agreements establishing the framework, objectives and overall authority necessary to govern the activities relating to the Authority’s interest rate risk management program is hereby adopted in the form attached as Exhibit “6-A”; and be it further

 

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

 

 
 

7.                   Decrease in New York City Governmental Customer Fixed Cost Component – Notice of Adoption  

 

The President and Chief Executive Officer submitted the following report:

SUMMARY

“The Trustees are requested to take final action to approve a decrease of $0.8 million or 0.5% in the Fixed Cost component of the production rates to be charged in 2011 to the New York City Governmental Customers (‘Customers’).  The decrease would be effective with the February 2011 bills.

 

BACKGROUND

At their September 28, 2010 meeting, the Trustees directed the publication in the New York State Register (‘State Register’) of a notice that the Authority proposed to increase the Fixed Costs component of the production rates to be charged in 2011 to the Customers.  The State Register notice was published on October 20, 2010 in accordance with the State Administrative Procedure Act (‘SAPA’) and re-published on November 10, 2010 to correct an error.  The public comment period was closed on December 27, 2010.  The City of New York (‘City’) is the only one of the eleven SENY Customers who filed formal written comments.

As indicated in the September 28 memorandum to the Trustees, under the Customers’ Long-Term Agreements (‘LTAs’), the Authority must establish Fixed Costs based on cost-of-service principles and may make changes only under a SAPA proceeding with the approval of the Trustees.  As the memorandum also indicated, the LTAs establish two distinct cost categories: Fixed Costs and Variable Costs.  Fixed Costs include Operation and Maintenance (‘O&M’), Shared Services, Capital Cost, Other Expenses (i.e., certain directly assignable costs) and a credit for investment and other income.

 

DISCUSSION

 

Based on Customer comments received and staff’s analysis, the final decrease in Fixed Costs sought by this action is $0.8 million.  This represents a $2.1 million decrease from the proposed Fixed Costs estimate discussed at the September 28, 2010 Trustees’ meeting.  Under the LTAs, Customers’ concerns must be considered in a confidential process prior to presenting any proposed changes to the Fixed Costs to the Trustees or issuing them for public comment.  In 2010, numerous informal Customer data requests were presented to staff, and, in all cases, responses to relevant questions were provided to the Customers.

 

In addition, as part of the SAPA process, the City submitted formal written comments to the Authority, which are attached as Exhibit ‘7-A.’  In their comments, the City took the position that the 2011 Fixed Costs are ‘overstated and excessive’ and ‘includes elements for which it (City) and other NYC Customers should not be responsible.’  The City further asserts that ‘NYPA must do more to control and reduce its expenses’ in order to reduce fixed costs.  The City is requesting that the 2011 Fixed Cost be reduced by some $18 million.  A summary, review and analysis of the City’s written comments follow:

 

Issue 1: NYPA’s Fixed Costs Improperly Continue To Rise

 

Comments: The City raised concerns regarding the level of Fixed Costs in the Preliminary 2011 Cost-of-Service and the historic unit cost trend.  Citing the level of increases over the past five years, the City states that the Fixed Costs have increased by more than 80% on a unit cost (per MWh of generation) basis.  The argument is also made that when the related Variable Costs are factored in, the total costs of operating the generating facilities dedicated to serving the Customers are uneconomic, projecting a net loss of $25.3 million for 2011 and $30.6 million for 2010.

 

Staff Analysis: Authority staff views the City’s claim as indicative of current market conditions rather than actual increases in Fixed Costs.  The average annual increase in the Fixed Cost component of the Customers’ Final Cost-of-Service over the past five years is 2.6%.  The generating units dedicated to the Customer portfolio will only run when economically beneficial which is driven by the New York Independent System Operator (‘NYISO’) market.  This is a risk the Customers agreed to take when they accepted the generating facilities as part of their supply portfolio.  These generating units are modeled as a hedge against the total cost of serving the energy needs of the Customers and cannot be evaluated in the isolate and as with any hedge instrument there is inherent risk.  The existence of the dedicated Authority generation portfolio, especially the addition of the 500 MW combined cycle unit in 2006, has a dampening effect on energy and capacity market prices.  It is a twist of logic to use the existing market prices, the magnitude of which have been impacted by the existence of the portfolio, and then measure these prices against the variable and fixed costs of the portfolio.  A more sensible approach would be to forecast how much more the Customers would pay if the portfolio was theoretically precluded from participating in the NYISO energy and capacity markets and then compare this to the portfolio’s embedded cost.  The Customers have not taken this approach.  Even though there is a $30.6 million projected loss from the dedicated generating facilities, the overall actual cost of serving the Customers in 2010, including the Fixed Costs dedicated to the generating facilities in their portfolio, is projected to be $1.4 million higher than the $861.1 million projected in the Final 2010 Cost-of-Service unadjusted for changes in load.

 

Comments:  The City further contends that closure of the Poletti Project, along with the fact that the 500 MW Combined Cycle Unit (‘CCU’) is only five years old, should have resulted in a reduction in overall Fixed Costs, particularly, projected O&M expenses, Capital and operational costs.  The City claims that the failure to reduce these costs raises questions as to NYPA’s focus on controlling costs.

 

Staff Analysis:  The Authority is vigilant in controlling its costs.  As noted above, the average annual increase in Fixed Costs was only 2.6%.  There are several factors contributing to the increase in Fixed Costs over the past five years.  First, the 500 MW CCU plant became operational in January, 2006.  O&M was minimal and in succeeding years the level of O&M increased due to outages performed under a long-term services agreement, viewed as the most cost efficient option, dictated by landmark hours of operation.  Second, the Customers agreed in the LTA to a smoothing and phase-in of the Poletti debt service schedule which lowered significantly the debt service payments in the early years of the LTA but increased the amortization amounts in the 2008 - 2013 periods.  This accommodation, implemented at the Customer’s request, added some $30 million to the fixed costs over the five years the City uses in its analysis and primarily explains why the closure of Poletti has not caused a dramatic decrease in the Fixed Costs.  Staff contends that the level of Fixed Costs required should be predicated on the resources necessary to meet the Customers’ needs and ensure effective operation of the facilities dedicated to them.  

 

Comments:  Also, within the Fixed Costs comments, the City cites the effect of the economic recession and the fact the City, as well as the State, has laid off employees and projects to lay off thousands more.  The contention is that the Authority has not placed tighter controls on costs, particularly the Headquarters budget which the City claims has increased by more than $15 million in the past two years.  The City states that it cannot recommend specific cost reductions but requests a Fixed Cost spending reduction of a minimum of 5% or $7.5 million in addition to the specific adjustments discussed below.

 

Staff Analysis:  Staff fully acknowledges the impact of the current State and local economic condition.  As indicated above, the overall Fixed Cost increased by a modest average of 2.6% per year.  The Authority is dealing with many of the same increases in cost factors affecting the State and City, mainly increases in contributions to pension funds and medical coverage which are significant components of the Headquarters budget.

 

Recommendation:  At their December 2010 meeting, the Trustees approved the 2011 O&M Budget which reflected an aggressive effort by the Authority’s management to keep the overall O&M spending for 2011 at the same level as 2010.  As a result of this effort, staff recommends the 2011 Fixed Costs be reduced by $1.3 million (O&M $1.1 million and Shared Services $0.2 million).  Staff also recommends an additional $0.8 million reduction in Other Expenses discussed later in this response to Customer comments, for a total reduction of $2.1 million, resulting in a 0.5% reduction in Fixed Costs as compared to the 2010 Fixed Cost level.

 

                Issue 2:  Poletti-Related Costs

 

                Comments:  The Customers raised concerns that the Fixed Cost components specifically relating to the Poletti project should not be included in the 2011 Cost-of-Service but should be taken from the asset retirement fund since the plant was retired January 31, 2010.  They claim that the O&M projections earmarked for roof repairs, which they claim is unreasonable, insurance and workers compensation should be recovered from the asset retirement fund since the plant was removed from service.

 

                The City also objects to the inclusion of Shared Services and Capital costs assigned to the Poletti project including carrying costs for materials and supplies inventory, as well as carrying costs for 2009 oil inventory and material and supplies carrying charges which they claim is not provided for in the LTA.

 

                The City requests that the projected costs for those items discussed above be eliminated and the Fixed Costs be reduced by an additional $4.5 million.

 

Staff Analysis:  Even though the Poletti project ceased operations on January 31, 2010, there are certain costs which must be incurred to assure the environmental and physical safety of the facility until the actual decommissioning process begins.  These costs would include liability insurance as well as other costs necessary to insure a safe working environment until the demolition phase of the decommissioning begins.  The roof repairs noted are mostly for the administration building which will continue to support the 500 MW CCU.  The Authority feels it is appropriate for the Customers to be charged these transitional costs after having received the full benefit of the Poletti project for 34 years.

                               

“Staff has also reviewed the City’s comments regarding the inclusion of Shared Services and Capital costs assigned to the Poletti project.  A similar issue was addressed in response to public comments for both the 2007 and 2008 rate actions.

 

The Shared Services component of the Fixed Costs consists of the portion of the headquarters O&M budget not directly assignable to any facility or project, plus the Research and Development O&M budget offset by the allocation to capital projects.  These Shared Services estimates are based on the level of headquarters’ resources required to support the Customers and the proportional amount of corporate overhead allocated on the basis of labor assigned to the 500 MW CCU, Poletti, and Small Hydro projects.  The Authority uses the same methodology to allocate the headquarters costs to the other Authority facilities.

 

Even though the Poletti project has ceased operations, there is an ongoing effort required to transition from the plant closure to decommissioning, which is based on the labor allocation noted above.

 

Regarding the inclusion of Capital costs and carrying charges not provided for in the LTA, staff submits that the LTA includes a provision for amortizing the original Poletti debt service due until 2016 which called for significantly higher annual payments through 2008 be amortized through 2013.  Also, the 2006 Cost-of-Service included $1.8 million in O&M related to a Customer request to amortize a $5.4 million Poletti 2004 outage expense over a three-year period.  The issue of recovering costs in subsequent years was also addressed during the 2008 rate action where staff recommended eliminating the projected costs for anticipated consulting services to reduce the magnitude of the increase in Fixed Costs and charge the Customers only for actual costs in a subsequent year.  As to including carrying charges for the 2009 oil inventory, as well as materials and supplies, the Authority seeks only to recover the lost opportunity costs related to investing in these assets on the Customers’ behalf since the funding for these items comes from the Authority’s operating reserves.

 

Staff has always been cognizant of the Customers’ desire to keep rate increases to a minimum and has agreed to levelize costs over multiple years.  Since the Customers are charged cost-based rates, staff has always made it clear that the Authority does not want to make any ‘profit’ on serving these Customers nor does it want to incur any losses in serving this Customer segment.

                 

                Recommendation:  Staff recommends no changes to the Poletti related components of the projected Fixed Costs for the Customers 2011 Cost-of-Service.

 

                Issue 3:  Headquarters Direct Support Costs

 

                Comments:  The City requests that the Authority reduce the Headquarters Direct Support (Shared Services) component of the Fixed Costs by $2.5 million.  Citing the ongoing economic problems facing both the City and State and the curtailment of services and reduced work force through layoffs, the City contends that the Authority has not made any effort to reduce expenses, especially in light of the Poletti retirement.  The City claims that given the Poletti closure, the Authority does not need the same complement of workers to perform, essentially, half the amount of work.

 

                Staff Analysis:  As stated earlier, the Shared Services component of the Fixed Costs consists of the portion of the headquarters O&M budget not directly assignable to any facility or project, plus the Research and Development O&M budget offset by the allocation to capital projects.

 

                These Shared Services estimates are based on the level of headquarters’ resources required to support the Customers and the proportional amount of corporate overhead allocated on the basis of labor assigned to the 500 MW CCU, Poletti and Small Hydro projects.  The Authority uses the same methodology to allocate the headquarters costs to the other Authority facilities.

 

                Although the Poletti project ceased operations, the projected level of Headquarters direct support is required to serve the Customers as a whole and has no correlation to the Poletti project.  As long as the Authority serves this Customer segment, the Authority would incur costs on their behalf whether or not the Authority dedicate part of the generation fleet.  There would still be costs for staff and other direct corporate costs to meet the LTA hedging implementation efforts and additional reporting, as requested by the Customers, has become quite extensive over the past several years.

 

                Indirect overhead which is included in the Shared Services component of Fixed Cost is assigned to the Authority’s operating facilities per the Bergen legal settlement which requires overhead be allocated on the basis of labor charged to each operating facility.

 

                Recommendation: While staff is well aware of the fiscal crisis the City faces, every attempt is made to keep costs to a minimum while insuring the Authority maintains its fiscal integrity.  For the reasons stated above, staff recommends no changes to the Shared Services component of the Fixed Costs category and staff recommends no changes to the Headquarters Direct Support related components of the projected Fixed Costs for the Customers’ 2011 Cost-of-Service

 

        Issue 4:  Capital Cost Adjustments

 

                Comments:  The City proposes that the Customers should not be charged for NYMEX Margin Carrying Costs ($0.2 million), claiming that these are hedge related costs and are not true Fixed Costs.  The City also wants the capital costs for the 500 MW Turbine Repair ($1.0 million) removed, claiming these costs were recovered through a drawdown of the O&M Reserve discussed during the initial review of the Preliminary Cost-of-Service.

 

                Staff Analysis:  Staff recommends no changes to the Poletti related components of the projected Fixed Costs for the Customers’ 2011 Cost-of-Service.  The NYMEX Margin Carrying Costs represent the lost opportunity costs for the Authority’s investment in NYMEX margin requirements dedicated to the Customers.  The capital costs for the 500 MW Turbine Repair represents the amortization of recovering the $15.5 million capital portion of the repair cost, over the remaining life of the plant, funded by the Authority’s operating reserves.  In addition to the $15.5 million capital investment, there was an additional $4.7 million in outage related costs which were determined to be O&M and therefore could not be capitalized.  The O&M Reserve was drawn upon to recover these costs.    

                               

                Recommendation:  For the reasons stated above, staff recommends no changes to the Capital Cost item. 

 

                Issue 5: Other Expenses

 

                Comments: The City requests that Fixed Costs be reduced by $2.2 million for General Electric’s (‘GE’) Litigation ($0.2 million), Hudson Transmission Project (‘HTP’) ($1.2 million) and Special Studies ($0.8 million).  The City claims that since they were not given specific supporting documentation during the initial discovery they cannot verify the validity or magnitude of the claims and subsequent settlement and therefore, it is not consistent with Cost-of-Service principles.

 

                Staff Analysis: The GE Litigation was pursued on behalf of the Customers in an attempt to recover the costs overruns and delays relating to construction of the 500 MW CCU.  In October 2006, the Authority filed a complaint with the NY Supreme Court against GE and five of its subcontractors to recover damages due to delays and cost overruns due to inadequate engineering and design services and defective equipment.  GE countered to seek recovery of damages due to delays in construction allegedly caused by the Authority.  The claim was settled in 2007 with GE giving credits to the Authority for future work at the 500 MW CCU plant.  In order to proceed with the litigation, the Authority secured outside counsel, as well as subject matter experts.  The total cost of the litigation was $2.6 million.  The Authority was required to execute a strict confidentiality agreement which did not extend to the Customers.  The case was, in fact, settled with GE subject to a separate confidentiality agreement which also did not extend to the Customers.  It is staff’s position that both of these agreements were necessary to protect the Customers’ best interests and the Authority cannot subject itself to legal action by violating these confidentiality agreements. 

 

                The City claims that the Authority acted on its own volition in pursuing the HTP after the initial interest for a new supply resource, bid on by HTP, was awarded to Astoria Energy and the City was not consulted with, or sought approval for, any expenses for the HTP project.  The City also sights no provision in the LTA for ‘true-up’ of costs incurred for prior years.

 

                The City has been and continues to be actively involved in negotiations and discussion regarding the HTP project.  Staff rejects the City’s claim that they should not pay for any initiatives solely for their benefit and which they are actively involved, given that there is no agreement or understanding that they will not be responsible for the associated costs.  As to the ‘true-up’ of costs, this was addressed in Issue 2 above and is consistent with past practices.

 

                The City claims that it has not requested any ‘special studies’ that there was no justification for, including these costs, and therefore these costs included under Fixed Costs should be removed, or the Authority should put these funds in an interest bearing account to be drawn upon for any special studies requested by the City with any leftover balances either returned to the City or used to reduce 2012 Fixed Costs.

 

                Staff has reviewed the City’s comments regarding ‘special studies’ and after careful consideration, based on past practices for other special studies such as the demand study, would agree to eliminate the $0.8 million from the Fixed Cost and charge future Cost-of-Service(s), after discussion with the Customers, for the actual cost of any studies undertaken.

               

                Recommendation:  For the reasons stated above, staff recommends reducing the 2011 Fixed Cost by an additional $0.8 million from the Other Expenses category  

Because the Variable Costs component (i.e., fuel and purchased power, risk management, NYISO ancillary services and O&M reserve, less a credit for NYISO revenues from Customer-dedicated generation) is developed in collaboration with the Customers in accordance with the provisions of the LTAs previously approved by the Trustees, staff is not requesting the Trustees’ approval of the Variable Costs component of the production rates for 2011.  Additionally, the Authority passes through all Variable Costs to the Customers by way of the ‘Energy Charge Adjustment (‘ECA’) with Hedging’ cost-recovery mechanism which the Customers collectively selected for 2011.  This cost-recovery mechanism offered under the LTA employs a monthly charge or credit that reflects the difference between the projected Variable Costs of electricity (i.e., the Variable Costs recovered under the Customers’ tariffs) and the monthly actual Variable Costs incurred by the Authority to serve the Customers.

For the Trustees’ information, the projected Variable Costs are expected to decrease 2.8% from 2010 levels and are subject to change depending on the selected hedging strategies.  As mentioned, the final rates will combine the Trustee-authorized Fixed Costs decrease with the Variable Costs decrease achieved in accordance with LTAs.  The forecasted Customer sales and revenues are expected to decline in 2011 resulting in a revenue shortfall of $9.0 million as evaluated against the current production rates.  To offset the projected revenue shortfall, production rates for 2011 would increase by an estimated 1.1%.  The production rate increase would be equally applied to demand and energy charges through 2011, starting with February 2011 bill month.  The January 2011 revenue shortfall is expected to be recovered through the ECA.

As additional information for the Trustees, in accordance with agreements entered into between the Authority and the Customers with respect to Astoria Energy II (‘AE II’), and in recognition that the new plant is expected to commence operation on June 1, 2011, the AE II lease payment of $74.3 million and other AE II related costs and revenues originally included in the preliminary 2011 Cost-of-Service has been excluded from the final 2011 Cost-of-Service.  As per the Customers’ request, a separate monthly ECA will be calculated for the AE II related costs and revenues and will be applied to the Customers’ bills once AE II begins service.

Exhibit ‘7-B’ shows both current 2010 and final 2011 Conventional and Time-of-Day production rates.

FISCAL INFOMATION

The adoption of the Fixed Costs decrease would result in an estimated $0.8 million reduction in revenue to the Authority.

RECOMMENDATION

 

                The Director – Market Analysis and Tariff Administration, recommends that the Trustees authorize the Corporate Secretary to file a Notice of Adoption with the New York State Department of State for publication in the New York State Register for a decrease in Fixed Costs applicable to the New York City Governmental Customers under the Long-Term Agreements.

The Trustees are also requested to authorize the Senior Vice President – Marketing and Economic Development, or his designee, to issue written notice of adoption  to the affected customers.

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

 

Mr. Michael Lupo presented highlights of staff’s recommendation to the Trustees.  In response to a question from Chairman Townsend, Mr. Donald Russak said that with regard to the Poletti Project closure, the recovery method for decommissioning costs, which are being collected over a period of time, was established in the New York City ratemaking procedure.  In response to another question from Chairman Townsend, Mr. Russak said that the pre-established asset retirement contribution is approximately $3.9 million per year collected from the customers over a period of time for decommissioning.  In response to further question from Chairman Townsend, Mr. Russak said that the administrative costs are allocated to each of the Authority’s facilities using a labor-ratio approach, which is a standard method used in the utility industry and the one that the Authority uses in setting its rates. 

In response to a question from Trustee O’Luck, Mr. Russak said that the Authority’s fixed costs for serving this customer group over a 5-year period has gone up 2.6% per year; the customer’s comment that the fixed cost have increased by more than 80% per MW of generation is not an appropriate measure since the cessation of operations at Poletti does not alleviate the Authority’s requirement to secure other sources of power and energy, provide billings services, etc.   

In response to a question from Vice Chairman Foster, Mr. Russak said that the largest component requested from the customer was a generic 5% reduction in overall costs without identifying the source of that requested reduction.  However, taking into account the costs associated with maintaining safe and reliable operations of the power plants and corporate support costs, this would not be a prudent action on the part of the Authority.

                Trustee Nicandri said that it was appropriate that this item was removed from the Consent Agenda because it is important for customers to have the assurance that the Trustees seek answers from staff regarding their concerns.

President Kessel added that it is important for the customers to know that, despite increasing costs and the state of the economy, the Authority approved a flat budget for 2011.  He also said that, of note, the customer received a rate reduction which is very rare in the utility industry as utilities around the state are getting rate increases.  President Kessel said that going forward, major rate making items should be placed on the Discussion Agenda.

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

 

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

 

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

               

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


 


 

8.                   Informational Video Presentation: NYPA Transmission - 2011
 

                President Kessel said that the Authority’s TV Production crew, led by Mr. Kevin O’Keeffe, put together the presentation on the Authority’s transmission system.


 

9.                   Motion to Conduct an Executive Session

               

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


 

11.                Next Meeting

 

The Annual Meeting of the Trustees will be held on Tuesday, March 29, 2011, at 11:00 a.m. at the Clarence D. Rappleyea Building, 123 Main Street, 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 1:00 p.m.

 

 

 

Karen Delince

Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                

 

 

 

 

 

JAN MINS.11