ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

 

MINUTES

 

October 30, 2007

Video Conference – 10:00 a.m.

 

                                                                New York Power Authority Offices:

123 Main Street, 16th Floor, White Plains, NY

30 South Pearl Street, 10th Floor, Albany, NY

                                                                Fort Myers Interactive Video Center, 1408 Bayview Court,

                                                                   Fort Myers, FL

                DMJM Harris, 605 Third Avenue, New York, NY

 

 

1.             Approval of the Minutes of the Meeting of September 24, 2007

 

2.             Power for Jobs Extended Benefits Recommendations

                for Electricity Savings Reimbursements                          

 

A.         COMPANIES IN JOB COMPLIANCE

 

Beth Israel Medical Center

New York – New York County

 

Bowne & Co

New York – New York County

 

Charmer Industries, Inc.

Astoria – Queens County

 

East Harlem Arts & Education Local Dev. Corp.

New York – New York County

 

International Business Machines

White Plains – Westchester County

 

Kingsbrook Jewish Medical Center

Brooklyn – Kings County

 

Long Island Jewish Medical Center

Manhasset – Nassau County

 

Marymount College

Tarrytown - Westchester County

 

Memorial Sloan-Kettering Cancer Center

New York – New York County

 

Mount Sinai Medical Center

New York – New York County

 

New York Presbyterian Hospital

New York – New York County

 

Norampac New York City, Inc.

Maspeth – Queen County

 

 

Long Island Power Authority - Service Territory

 

John Hassall, Inc.                                                                                 Standard Microsystems Corp.

Westbury – Nassau Count                                                                Hauppauge – Suffolk County


 

National Grid - Service Territory

               

Albany Molecular Research, Inc.

Albany – Albany County

 

Applied Energy Solutions

Caledonia – Livingston County

 

Borg Warner Morse Tech Corp.

Cortland – Cortland County

 

Clarkson University

Potsdam – St. Lawrence County

 

Cooper Hand Tools

Cortland – Cortland County

 

Cooper Industries

Syracuse – Onondaga County

 

Delphi Automotive Systems

Amherst – Erie County

 

Fitzpatrick & Weller, Inc.

Ellicottville – Cattaraugus County

 

Interface Solutions, Inc.

Fulton – Oswego County

 

Kilian Manufacturing Corporation

Syracuse – Onondaga County

 

Lydall Manning

Green Island – Albany County

 

McLane Eastern

Baldwinsville – Onondaga County

 

Mohawk Paper Mills

Cohoes - Albany County

 

Natrium Products, Inc.

Cortland – Cortland County

 

Standard Manufacturing Co., Inc.

Troy – Rensselaer County

 

Syracuse University

Syracuse – Onondaga County

 

Turbine Engine Components Technologies

Whitesboro – Oneida County

 

Welch Allyn Data Collections, Inc.

Skaneateles Falls – Onondaga County

 

 

 

 New York State Electric and Gas – Service Territory

 

Borg Warner Automotive Morse TEC             Endicott Interconnect Technologies

Ithaca – Tompkins County                                 Endicott – Broome County

 

Consumers Beverage, Inc.

Buffalo – Erie County

 

 

Rochester Gas & Electric – Service Territory

 

Flower City Printing, Inc.                                    International Business Machines – Rochester – Monroe County                                                              Rochester – Monroe County                                                                                                                                            


 

 

B.         COMPANIES NOT IN JOB COMPLIANCE

 

Con Edison – Service Territory

 

AT&T

White Plains – Westchester County

 

 

3.       Power for Jobs Program and Energy Costs  Savings Benefits – Compliance Review

 

4.       Transfer of Industrial Power

               

Alcan Packaging Food & Tobacco, Inc.

New Hyde Park – Nassau County

 

American Cancer Society

New York – New York County

Homogenous Metals, Inc.

Clayville – Oneida County

 

Orion Bus Industries, Inc.

Oriskany – Oneida County

 

 

        5.     Next Meeting

 


 

 

            A regular meeting of the Economic Development Power Allocation Board was held via video conference at the following participating locations:

 

1)       New York Power Authority, 30 South Pearl Street, Albany NY

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

3)       DMJM Harris, 605 Third Avenue, New York, NY

4)       Fort Myers Interactive Video Center, 1408 Bayview Court, Fort Myers, FL

 

 

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

Frank S. McCullough, Jr., Chairman (White Plains, NY)

Bernard P. McGarry, Member (Albany, NY)

James A. Duncan, Member, (Fort Myers, FL)

Kevin S. Corbett, Member (New York, NY))

 

 

Also in attendance were:

 

Roger B. Kelley                                    President and Chief Executive Office

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

 

James H. Yates                                     Senior Vice President, Marketing and Economic Development, NYPA

Thomas Warmath                                Vice President and Chief Risk Officer

 

Anne B. Cahill                                      Corporate Secretary, NYPA

Joseph C. Carline                                 Assistant General Counsel, NYPA

John B. Hamor                                      Executive Director – State Governmental Relations, Albany

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

Michael A. Saltzman                            Director – Media Relations, NYPA

Anthony C. Savino                              Manager – Business Power Allocations and Compliance, NYPA

Angela Graves                                      Deputy Corporate Secretary, NYPA

Mary Jean Frank                                  Associate Corporate Secretary, NYPA

Lorna M. Johnson                               Assistant Corporate Secretary, NYPA


 
 

 

1.                    Adoption of Minutes

The minutes of the meeting of September 24, 2007, were unanimously adopted.


 

 

2.             Power for Jobs Program - Extended Benefits

 

SUMMARY

 

The Members of the Economic Development Power Allocation Board (“EDPAB”) are requested to approve extended benefits for 38 Power for Jobs (“PFJ”) customers as listed in Exhibits “A” and “B.” 

 

BACKGROUND

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

DISCUSSION

 

EDPAB is requested to recommend that the Authority Trustees approve electricity savings reimbursement rebates to the 38 PFJ customers businesses listed in Exhibit “A.”  Collectively, these organizations have agreed to retain more than 64,000 jobs in New York State in exchange for the rebates. 

 

 

 

 

DISCUSSION

 

                EDPAB is requested to recommend that the Authority Trustees approve electricity savings reimbursement rebates to the 38 PFJ customers, 37 of which are meeting their current job commitment and are listed in Exhibit “A.”  However, one customer reported actual job numbers below its contractual commitment and staff recommends that this customer have its allocation reduced proportionately to its job shortfall, where appropriate.  This customer is listed in Exhibit “B.”  Collectively, these organizations have agreed to retain more than 64,000 jobs in New York State in exchange for the rebates.  The rebate program will be in effect until June 30, 2008, the program’s sunset.

 

RECOMMENDATION

 

It is requested that the Economic Development Power Allocation Board recommend that the Authority Trustees approve the payment of electricity savings reimbursements to the 38 businesses listed in Exhibits “A” and “B.”

 

The following resolution was unanimously adopted by members of the Board present.

WHEREAS, the following entities have applied for extended benefits recommendations for electricity savings reimbursements under the Power for Jobs program:

COMPANIES IN JOB COMPLIANCE

Con Edison - Service Territory

 

Beth Israel Medical Center

New York – New York County

 

Bowne & Co

New York – New York County

 

Charmer Industries, Inc.

Astoria – Queens County

 

East Harlem Arts & Education Local Dev. Corp.

New York – New York County

 

International Business Machines

White Plains – Westchester County

 

Kingsbrook Jewish Medical Center

Brooklyn – Kings County

 

Long Island Jewish Medical Center

Manhasset – Nassau County

 

Marymount College

Tarrytown - Westchester County

 

Memorial Sloan-Kettering Cancer Center

New York – New York County

 

Mount Sinai Medical Center

New York – New York County

 

New York Presbyterian Hospital

New York – New York County

 

Norampac New York City, Inc.

Maspeth – Queen County

 

 

Long Island Power Authority - Service Territory

 

John Hassall, Inc.                                                                           Standard Microsystems Corp.

Westbury – Nassau County                                                        Hauppauge – Suffolk County

 

 

 

 

 

 

 

 

 

National Grid – Service Territory

 

Albany Molecular Research, Inc.

Albany – Albany County

 

Applied Energy Solutions

Caledonia – Livingston County

 

Borg Warner Morse Tech Corp.

Cortland – Cortland County

 

Clarkson University

Potsdam – St. Lawrence County

 

Cooper Hand Tools

Cortland – Cortland County

 

Cooper Industries

Syracuse – Onondaga County

 

Delphi Automotive Systems

Amherst – Erie County

 

Fitzpatrick & Weller, Inc.

Ellicottville – Cattaraugus County

 

Interface Solutions, Inc.

Fulton – Oswego County

 

Kilian Manufacturing Corporation

Syracuse – Onondaga County

 

Lydall Manning

Green Island – Albany County

 

McLane Eastern

Baldwinsville – Onondaga County

 

Mohawk Paper Mills

Cohoes - Albany County

 

Natrium Products, Inc.

Cortland – Cortland County

 

Standard Manufacturing Co., Inc.

Troy – Rensselaer County

 

Syracuse University

Syracuse – Onondaga County

 

Turbine Engine Components Technologies

Whitesboro – Oneida County

 

Welch Allyn Data Collections, Inc.

Skaneateles Falls – Onondaga County

 

 

                New York State Electric and Gas – Service Territory

 

              Borg Warner Automotive Morse TEC                               Endicott Interconnect Technologies

Ithaca – Tompkins County                                                   Endicott – Broome County

 

Consumers Beverage, Inc.

Buffalo – Erie County

 

 

Rochester Gas & Electric – Service Territory

 

Flower City Printing, Inc.                                                      International Business Machines – Rochester – Monroe County                                   Rochester – Monroe County                                                                                                                              

 

 

COMPANIES NOT IN JOB COMPLIANCE

 

Con Edison – Service Territory

 

AT&T

White Plains – Westchester County

 

 

 

NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such applications meet the requirements of the extended benefits provisions of the Power for Jobs legislation contained in Article 6 of the Economic Development Law as amended by Chapter 645 of the Laws of 2006; and be it further

RESOLVED, That the Board recommends to the Power Authority of the State of New York the 38 applications for extended benefits recommendations for electricity savings reimbursements discussed herein totaling 56,545 kW until June 30, 2008.

 


 


 

 


 

3.             Power for Jobs Program and Energy Cost

Savings Benefits - Compliance Review          

 

SUMMARY

 

The members of the Economic Development Power Allocation Board (“EDPAB”)  are  requested to approve modifications to the benefits for 25 Power for Jobs (“PFJ”) customers and four Energy Cost Savings Benefit (“ECSB”) customers as detailed in Exhibits “A” and “B” that have reported actual job numbers below their contractual commitments.  EDPAB is requested to approve that these customers have their allocations reduced proportionately to their job shortfalls, where appropriate.  In addition, EDPAB is requested to approve that no modifications be made to the benefits for 28 PFJ customers and 8 ECSB customers that, after having reported actual job numbers below their contractual commitments, have applied for and met the criteria to have their benefits reinstated in full through the reconsideration process.

 

BACKGROUND

 

                PFJ provides either power or electricity savings reimbursements to businesses and not-for-profit corporations that have agreed to retain or create jobs in New York State.  Businesses may have their benefits reduced if they fail to meet their contractual commitments.

 

ECSBs protect certain Authority power program customers from bill increases that resulted from higher market prices.  These businesses may also have their benefits reduced if they fail to meet their contractual commitments.

 

In 2007, a new law (Chapter 89 of the Laws of 2007) included provisions extending program benefits for both programs until June 30, 2008.

 

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

 

DISCUSSION

 

At its meeting on June 25, 2007, EDPAB recommended that the Authority’s Trustees approve the extension of benefits for 524 PFJ and 106 ECSB program customers through June 30, 2008.  In light of a legislative mandate that current PFJ and ESCB program participants receive extended benefits with minimal disruption, a blanket extension was given subject to staff review of the customers’ applications to determine if they are in compliance with their prior contractual commitments. 

 

In the past, EDPAB would recommend that the Trustees reduce allocations before the customers had an opportunity to apply for reconsideration.  To facilitate a more efficient process, due in part to the short period of time left before the programs expire, staff sent the reconsideration criteria mentioned above to those customers that had reported job numbers below their contractual commitments. 

 

Staff has completed its review of 53 PFJ customers and 12 ESCB customers whose applications indicated job commitment shortfalls as listed on Exhibits “A” and “B.”  Staff received and reviewed 49 letters from these customers that made the case to keep their full benefits. 

 

Twenty-eight PFJ and eight ECSB customers met the criteria in full and therefore staff recommends that these customers have no modification made to their benefits.

 

Staff has determined that six PFJ customers have partially met the criteria and therefore should have their allocations reduced in part based on their job shortfalls, where appropriate. 

 

Finally, staff recommends that 19 PFJ customers and 4 ECSB customers that have either not submitted a request for reconsideration or have not met the criteria, have their allocations reduced proportionately to their job shortfalls.

 

RECOMMENDATION

 

It is requested that the Economic Development Power Allocation Board recommend that the Power Authority’s Trustees approve modifications to the benefits for 25 PFJ customers and four ESCB customers to have their benefits reduced proportionately to their jobs commitment shortfalls, where appropriate.   In addition, EDPAB recommends the Trustees approve that no modifications be made to the benefits for 28 PFJ customers and eight ECSB customers that, after having reported actual job numbers below their contractual commitments, have applied for and met the criteria to have their benefits reinstated in full through the reconsideration process.  The above recommendations are detailed in Exhibits “A” and “B.”

 

Mr. Pasquale presented the highlights of staff’s recommendations to EDPAB.  In response to a question from Mr. Duncan, Mr. Pasquale said that approximately 10% of the PFJ and ECSB customers had not met their original job commitment over the last year.  Responding to a question from Chairman McCullough, Mr. Pasquale said that the percentage falls to 6% when the variance procedures is taken into account.  In response to a question from Mr. Corbett, Mr. Pasquale said that he keeps Keith Corneau in Empire State Development Corporation’s (“ESDC”) Albany office, as well as ESDC’s regional representatives, apprised of staff’s review and recommendations with regard to reducing power allocations.

 

WHEREAS, the Economic Development Power Allocation Board (“EDPAB”) has recommended that the Authority approve modifications, where appropriate, to 25 allocations for Power for Jobs (“PFJ”) customers and four for Energy Cost Savings Benefit (“ECSB”) customers that have applied to have their benefits extended and reported actual job numbers below their contractual commitments, as detailed in Exhibits “A” and “B”; and

 

WHEREAS, EDPAB has recommended that the Authority approve that no modifications be made to the benefits for 28 PFJ customers and eight ECSB customers that have applied to have their benefits reinstated after having applied for and met the approved reconsideration criteria in full, as detailed in Exhibit “A” and “B”;

 

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

 


 



 

4.             Transfers of Industrial Power

 

SUMMARY

 

                The members of the Economic Development Power allocation Board (“EDPAB”) are requested to recommend approval to the companies as detailed below.

 

BACKGROUND

 

EDPAB is requesting to approve the transfer of power allocations for four existing companies that have changed names and or/locations for various business reasons. EDPAB has approved transfers of this nature at past meetings.

DISCUSSION

 

                The proposed transferees are as follows:

 

Alcan Packaging Food & Tobacco, Inc. (“Alcan”), located in New Hyde Park, Nassau County, has been in business for more than 60 years.  Alcan manufactures flexible plastic packaging primarily used in the food industry.  The company, originally Cellu-Craft Inc., was awarded an 850 kW Economic Development Power (“EDP”) allocation for 141 jobs by the Trustees at their meeting of January 23, 1991.  At their September 23, 2003 meeting, the Trustees recognized the company’s name change from Lawson Marden Label, Inc. to the legal name of its parent company, Alcan Packaging Food & Tobacco, Inc.  At their September 30, 2005 meeting, the Trustees extended the allocation to the end of 2006 and granted the company Energy Cost Savings Benefits (“ECSBs”) for the same period in exchange for 175 jobs.  At their November 28, 2006 meeting, the Trustees extended the allocation from January 1, 2007 through June 30, 2007 and granted the company ECSBs for the same period in exchange for 170 jobs.  At their June 26, 2007 meeting, the Trustees extended the allocation through June 30, 2008 and granted the company ECSBs for the same period in exchange for 163 jobs.  Alcan has moved most of its manufacturing to a modern facility in Edgewood, Long Island that can handle the 10 new color printing presses and slitters required for its customers.  Alcan requests that the 850 kW EDP allocation be transferred to its Edgewood facility, where the company will continue to honor all of the terms and commitments of its contract with the Authority.

 

The New York chapter of the American Cancer Society (“ACS”), formerly located on West 56th Street in Manhattan, New York County, moved its office to West 32nd Street in August 2007.  The New York chapter is part of the nationwide community-based not-for-profit organization dedicated to eliminating cancer as a major health problem through prevention and diminishing suffering through research, education, advocacy and services such as counseling, doctor referral and home care assistance.  ACS was awarded a 100 kW Power for Jobs (“PFJ”) allocation with 113 jobs by the Trustees at their April 28, 1998 Trustees meeting.  The contract was extended, with 99 jobs, by the Trustees at their April 17, 2001 Trustees meeting.  ACS chose to take the rebate option in 2005, and was approved for 100 kW and 114 jobs through the end of 2006, by the Trustees at their November 29, 2005 meeting.  ACS continued with the rebate for January 1, 2007 through June 30, 2007, with 80 kW and 83 jobs, as approved by the Trustees at their meeting of November 28, 2006.  The rebate option has been extended through June 30, 2008, with 80 kW and 91 jobs, as approved by the Trustees at their meeting of June 26, 2007.  ACS requests that the PFJ rebate benefit be transferred to its West 32nd Street office, where ACS agrees to comply with all obligations associated with its allocation.

 

Homogenous Metals Inc. (“Homogenous Metals”), located in Clayville, Oneida County, is a wholly owned subsidiary of United Technologies Corporation.  Homogenous Metals was founded in the mid-1960s.  The company manufactures super alloy metal powders used in military and commercial aircraft engines, in addition to the space shuttle engines.  The company is changing its name only, without any ownership change, to HMI Metal Powders.  The Trustees approved a 500 kW PFJ allocation with 109 jobs at their January 27, 1998 meeting.  The allocation was extended, with 518 jobs, by the Trustees at their meeting on January 30, 2001.  At their February 23, 2005 meeting, the Trustees extended the allocation, with 108 jobs, through December 31, 2005.  At their September 20, 2005 meeting, the Trustees extended the allocation, with 109 jobs, through December 31, 2006.  At their October 24, 2006 meeting, the Trustees extended the allocation through June 30, 2007.  At their June 26, 2007 meeting, the Trustees extended the allocation, with 106 jobs, through June 30, 2008.  The company requests that the Trustees approve its name change for contractual purposes.

 

Orion Bus Industries, Inc. (“Orion”), located in Oriskany, Oneida County, has been in business since 1982, and manufactures heavy-duty state-of-the-art transit buses.  The Trustees approved the company for a 700 kW EDP allocation with 463 jobs at their August 28, 1990 meeting.  At their September 28, 1998 meeting, the Trustees approved a 300 kW PFJ allocation with 775 jobs.  At their April 27, 1999 meeting, the Trustees adjusted the PFJ allocation employment commitment to 644 jobs.  The Trustees extended the PFJ allocation at their April 17, 2001 meeting.  At their February 23, 2005 meeting, the Trustees extended the PFJ allocation, with 596 jobs, through December 31, 2005.  The Trustees extended the PFJ allocation, with 250 kW and 508 jobs, through December 31, 2006 at their meeting on September 20, 2005.  At their meeting of January 31, 2006, the Trustees reinstated the PFJ allocation to 300 kW.  The Trustees extended the PFJ allocation, with 523 jobs, through June 30, 2007 at their November 28, 2006 meeting, and then extended it through June 30, 2008, with 571 jobs, at their June 26, 2007 meeting.  The EDP allocation was extended through December 31, 2006 by the Trustees at their September 20, 2005 meeting, and Orion was granted ECSBs for this period, with an employment commitment of 507 jobs.  The EDP allocation was extended through June 30, 2007, with ECSBs, by the Trustees at their November 28, 2006 meeting, with 523 jobs.  At their June 26, 2007 meeting, the Trustees extended the EDP allocation through June 30, 2008 with ECSBs, with 571 jobs.  The company requests that the Trustees change their name for contractual purposes to DaimlerChrysler Commercial Buses North America Inc.  The company changed its name only, without any ownership change, in September 2006.

 

RECOMMENDATION

 

It is recommended that EDPAB approve the name and or location changes detailed above.

 

Following consideration of such recommendations, the Members of the Board present voted unanimously to adopt the following resolution:

RESOLVED, That the members of the Economic Development Power Allocation Board hereby approve the transfer of power allocations for four existing companies that have changed names and/or locations for various business reasons as described in the above memorandum to the Board.


 

5.             Next Meeting

 

                The next meeting of the Board is to be determined.