MINUTES OF THE REGULAR MEETING

OF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

 

January 26, 2010

 

 

Table of Contents

 

                Subject                                                                                                                                  Page No.               Exhibit

 

1.             Consent Agenda:                                                                                                                          

a.       Minutes of the Regular Meeting held on December 15, 2009                         

b.       Power for Jobs Program – Extended Benefits, Exhibit -  “1b-A”;  “1b-B-1”; “1b-B-2”

        Resolution

                                                                                                                                                                                  

c.        Industrial Incentive Award Approvals, Exhibit - “1c-A”
Resolution

 

Discussion Agenda:

2.             Q&A on Reports from:

a.       President and Chief Executive Officer                                                                

b.       Senior Vice President – Energy Services and Technology –  NYPA’s Energy Efficiency and Renewable Programs           

    

c.        Chief Operating Officer                                                                                         

d.       Chief Financial Officer, Exhibit - “2d-A”

e.        Executive Vice President and General Counsel  Special Report on PAAA –  Exhibit -  “2e-A”

        Resolution

   

3.                Information Technology Initiatives – Capital Expenditure Authorization

              Resolution
            

4.                Niagara Power Project – New Niagara Warehouse and Office Complex Project – Capital Expenditure Authorization and Contract Award

               Resolution  

 

5.                Renewable Energy and Clean Transportation Maintenance Services – Contract Awards 

Resolution

6.                Resolution – Stephen P. Shoenholz                                                                                       

7.                Motion to Conduct an Executive Session                                                                                                                            

8.                Motion to Resume Meeting in Open Session                                                                        

9.                Amendments to the Authority’s By-laws, Exhibition - “9-A”; “9-B”

              Resolution

10.             Next Meeting                                                                                                                              

Closing                                                                                                                                         

 


 

Minutes of the Regular Meeting of the Power Authority of the State of New York held at the Clarence D. Rappleyea Building, 123 Main Street, White Plains, New York.

Members of the Board present were:

                                Michael J. Townsend, Chairman

                                Jonathan F. Foster, Vice Chairman

                                D. Patrick Curley, Trustee

                                Elise M. Cusack, Trustee

                                Eugene L. Nicandri, Trustee

                                 

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Richard M. Kessel                               President and Chief Executive Officer

Gil C. Quiniones                                   Chief Operating Officer

Terryl Brown                                        Executive Vice President and General Counsel

Elizabeth McCarthy                           Executive Vice President and Chief Financial Officer

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

Bert J. Cunningham                            Senior Vice President – Corporate Communications

Steve DeCarlo                                      Senior Vice President – Transmission

Angelo Esposito                                   Senior Vice President – Energy Services and Technology

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

William Nadeau                                   Senior Vice President – Energy Resource Management

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

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

Joan Tursi                                             Senior Vice President – Enterprise Shared Services

Paul Belnick                                         Vice President – Project Development and Management

John L. Canale                                     Vice President – Project Management

Thomas DeJesu                                   Vice President – Public and Governmental Affairs, SENY

John Kahabka                                     Vice President – Environment, Health and Safety

Lesly Pardo                                           Vice President – Internal Audit

Francis Ryan                                        Vice President – Emergency Management

Dennis Eccleston                                 Chief Information Officer

Richard Hackman                              Chief Technology Development Officer

Francine Evans                                    Chief of Staff – President’s Office

Victoria Simon                                     Chief of Staff and Director of Energy Policy

Karen Delince                                      Corporate Secretary

Thomas Concadoro                            Director – Accounting

Michael Huvane                                  Director – Business Muni and Coop Marketing and Economic

                                                                     Development

Michael Saltzman                               Director – Media Relations

Brian Ross                                            Senior Project Manager – Special Projects and Business Integration

Mary Cahill                                          Program Evaluation Manager – Energy Services and Technology

Angela D. Graves                                 Deputy Corporate Secretary

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

Timothy Muldoon                               Marketing Representative – Business Power Allocation, Compliance and Muni

                                                                     and Coop Marketing 

Steve Shoenholz                                  Public Affairs Consultant

Michael Solomon                                Managing Director – Janney Montgomery Scott LLC

 


 

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


 

1.                     Consent Agenda

                Chairman Michael Townsend said that the Economic Development Power Allocation Board had recommended that the Authority’s Trustees approve items 1b (Power for Jobs Program – Extended Benefits) and 1c (Industrial Incentive Award Approvals) at their meeting earlier in the day.


 

a.       Approval of the Minutes

 

                                The Minutes of the Regular Meeting held on December 15, 2009 were unanimously adopted.


 

b.       Power for Jobs Program – Extended Benefits

                The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve electricity savings reimbursement rebates for 46 Power for Jobs (‘PFJ’) customers as listed in Exhibit ‘1b-A.’  This request is to approve rebate dollars only.  The Trustees have approved extended benefit payments at previous Trustees’ meetings.  These rebates are calculated for historical periods only.  These customers have been recommended to receive such rebates by the Economic Development Power Allocation Board (‘EDPAB’).  In addition, the Trustees are requested to approve payment for PFJ Restitution to the 9 companies listed in Exhibit ‘1b-B-1.’  These companies have been evaluated for Restitution and are due payments.

 

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 received three-year contracts for PFJ electricity.

 

“The PFJ program originally made 400 megawatts (‘MW’) of power available and was to be phased in over three years.  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 additional power to be allocated under the 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.  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 power from the Authority pursuant to a sale-for-resale agreement with the customer’s local utility.  Separate allocation contracts between customers and the Authority contained job commitments enforceable by the Authority.

 

“In 2005, provisions of the approved State budget extended the period PFJ customers could receive benefits until December 31, 2006.  Chapter 645 of the Laws of 2006 included provisions extending program benefits until June 30, 2007.  Chapter 89 of the Laws of 2007 included provisions extending program benefits until June 30, 2008.  Chapter 59 of the Laws of 2008 included provisions extending the program benefits until June 30, 2009. Chapter 217 of the Laws of 2009 included provisions extending the program benefits until May 15, 2010.

 

“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. 

 

                                “PFJ Restitution was created by Chapter 645 of the Laws of 2006 that extended the PFJ program for six months to June 2007; the law states: ‘for the period beginning January first, two thousand six, for recipients who choose to elect a contract extension, and whose unit cost of electricity under the contract extension exceeds the unit cost of electricity of the electric corporation which holds a franchise for electric services in the location of the recipient’s facility, the power authority shall reimburse the recipient for all dollars paid in excess of the unit cost of electricity of the electric corporation which holds a franchise for electricity services in the location of the recipient’s facility.’

 

DISCUSSION

 

“At its meeting on January 26, 2010, EDPAB recommended that the Authority’s Trustees approve electricity savings reimbursement rebates to the 46 businesses listed in Exhibit ‘1b-A.’  Collectively, these organizations have agreed to retain more than 27,000 jobs in New York State in exchange for the rebates.  The rebate program will be in effect until May 15, 2010, the program’s sunset.

 

                  “The Trustees are requested to approve the payment and funding of rebates for the companies listed in Exhibit ‘1b-A’ in a total amount currently not expected to exceed $4.5 million.  Staff recommends that the Trustees authorize a withdrawal of monies from the Operating Fund for the payment of such amount, provided that such amount is not needed at the time of withdrawal for any of the purposes specified in Section 503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations, as amended and supplemented.  Staff expects to present the Trustees with requests for additional funding for rebates to the companies listed in the Exhibit ‘1b-A’ in the future for other rebate months.

 

                    “Restitution is owed to a PFJ customer if that customer paid more for PFJ power than it would have paid its local franchise utility (‘host utility’) for the same quantity of electricity over a certain statutorily defined measurement period.  The measurement period begins January 1, 2006 and ends with the date that the eligible customer ceases to be in the program or switches to rebates.

 

                                “The Authority, using information gathered from the host utilities and the Public Service Commission, determines the full-service electric rates of the host utility throughout the entire measurement period and the relevant customer charges under those rates as compared to the total actual PFJ charges paid by the customer to see whether the customer had net overall PFJ savings or is due a Restitution payment.

 

                                “Staff evaluated nine additional customers for the Restitution benefit.  Nine customers are eligible for Restitution payment and are presented for approval on Exhibit ‘1b-B-1.’  Ten customer listed on Exhibit ‘1b-B-2’ had overall PFJ program savings; therefore no payment is required.

 

FISCAL INFORMATION

 

“Funding of rebates for the companies listed in Exhibit ‘1b-A’ is not expected to exceed $4.5 million.  Payments will be made from the Operating Fund.  The Trustees have approved $202.4 million in past rebates.

 

“Funding of restitution payments for the companies listed on Exhibit ‘1b-B-1’ is not expected to exceed $550,000.  Payments will be made from the Operating Fund.  This is the second such payment request.  The total previously approved PFJ Restitution payments is $4.82 million. Additional requests will follow based on subsequent evaluation of other restitution eligible customers.

 

RECOMMENDATION

 

“The Executive Vice President and Chief Financial Officer and the Senior Vice President – Marketing and Economic Development  recommend that the Trustees approve the payment of electricity savings reimbursements to the Power for Jobs customers listed in Exhibit ‘1b-A’ and payment of PFJ Restitution for the customers listed in Exhibit ‘1b-B-1.’

 

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

 


 

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

 

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

 

                NOW THEREFORE BE IT RESOLVED, That to implement such EDPAB recommendations, the Authority hereby approves the payment of electricity savings reimbursements to the companies listed in Exhibit “1b-A,” and that the Authority finds that such payments for electricity savings reimbursements are in all respects reasonable, consistent with the requirements of the PFJ program and in the public interest; and be it further

 

RESOLVED, That based on staff’s recommendation, it is hereby authorized that payments be made for electricity savings reimbursements as described in the foregoing report of the President and Chief Executive Officer in the aggregate amount of up to $4.5 million, and it is hereby found that amounts may properly be withdrawn from the Operating Fund to fund such payments; and be it further

 

RESOLVED, That based on staff’s recommendation, it is hereby authorized that payments be made for Power for Jobs Restitution payments as described in the foregoing report of the President and Chief Executive Officer in the aggregate amount of up to $550,000 and it is hereby found that amounts may properly be withdrawn from the Operating Fund to fund such payments; and be it further

 

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

 

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

 

                RESOLVED, That the Chairman, the Vice Chairman, the President and Chief Executive Officer, the Chief Operating Officer and all other officers of the Authority are, and each of them hereby is, authorized on behalf of the Authority to do any and all things and take any and all actions and execute and

 

deliver any and all 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.

 


 


 

 


 

 


 

 


 

c.             Industrial Incentive Award Approvals

 

The President and Chief Executive Officer submitted the following report:

                                                                                                                                                                                                               

SUMMARY

 

                “The Trustees are requested to approve Industrial Incentive Awards to four manufacturing companies in accordance with the recently approved Economic Development Plan (‘Plan’).

 

BACKGROUND

 

                Chapter 32 of the Laws of 1987 added the eighth unnumbered paragraph of Section 1005 of the Public Authorities Law (‘PAL’) which directs the Authority to identify net revenues produced by the sale of Expansion Power (‘EP’) and, further, to identify an amount of such net revenues to be used solely for Industrial Incentive Awards.  These awards are to be made in conformance with a Plan, covering all such net revenues, that is submitted by the Authority to the Economic Development Power Allocation Board (‘EDPAB’) and is approved by EDPAB pursuant to Section 188 of the Economic Development Law (‘EDL’).  

 

                “Net revenues are defined by Section 1005 as any excess of revenues properly allocated to the sales of EP over costs and expenses properly allocated to such sales.  The Authority is directed in Section 1005 to identify net revenues no less often than annually.  Section 188 of the EDL provides that EDPAB is to review each Plan applying the same economic development criteria as those used to evaluate applications for power.  The statute does not specify a definition of Industrial Incentive Awards.

 

                “At its September 29, 2009 meeting, the Trustees approved a Plan that provides for the use of net revenues from the sale of EP for the calendar years of 2008 up through and including 2016 to provide electric bill discounts to manufacturing companies located in New York State that are at identifiable risk of closing or relocation to another state.

               

DISCUSSION

 

                “The condition of the current economy is placing added strain on many New York State manufacturing companies. Among these companies are the following:

 

1.       Buckingham Manufacturing Company, Inc. - Binghamton, New York (Broome County)

2.       GE Aviation Systems LLC - Bohemia, New York (Suffolk County) 

3.       New Horizon Graphic, Inc - Hauppauge, New York (Suffolk County)

4.       Owl Wire and Cable, Inc. 

a.       Canastota, New York (Madison County)

b.       Rome, New York (Oneida County)

 

These companies are all experiencing added cost pressure as a result of the economic downturn.  At their respective facilities, manufacturing processes represent a substantial portion of total electricity consumption.  Energy costs are a primary consideration for these companies in terms of keeping their businesses within New York State or relocating elsewhere.      

 

                “Each of these companies is currently facing difficult economic challenges.  Buckingham Manufacturing Company, Inc. has experienced markedly declined demand and is considering relocation to a state offering substantial manufacturer incentives.  In the case of GE Aviation Systems LLC, global consolidation had recently put their Bohemia facility at risk of closure.  New Horizon Graphic, Inc., which has been in business for twenty-five years, is currently considering either relocation or outright closure.  In addition, Owl Wire and Cable, Inc. is facing potential relocation of their Canastota and Rome operations to the State of South Carolina.

 

                “It is recommended that the Authority’s Board authorize the use of Industrial Incentive Awards to Buckingham Manufacturing Company, Inc., GE Aviation Systems LLC, New Horizon Graphic, Inc., and Owl Wire and Cable, Inc.  This recommendation comes after careful consideration of each company’s business case.  The form of the award will be a ¢/kWh price discount applied to a level of annual electric consumption, mutually agreed to by the Authority and each respective organization as described in Exhibit ‘1c-A.’  These award disbursements are predicated on the availability of EP net revenue funding for such Industrial Incentive Awards and are issued at the Authority’s sole discretion.      

 

                “The Industrial Incentive Award will remain in effect for a one year period.  The terms may be subsequently extended beyond the initial one-year period based on the availability of Authority funding and provided that each company met the agreed upon job commitment as specified in Exhibit ‘1c-A.’

 

“In the event that any of these companies qualify and participate in a future, yet to be determined, statewide power program that offers similar or greater value than the proposed Industrial Incentive Award, their Industrial Incentive Award would ultimately be terminated.   

 

                “It is therefore proposed that the Trustees approve Industrial Incentive Awards to Buckingham Manufacturing Company, Inc., GE Aviation Systems LLC, New Horizon Graphic, Inc. and Owl Wire and Cable, Inc.  The Authority will report to the Trustees annually on the actual disbursement of these funds. 

 

RECOMMENDATION

 

“The Senior Vice President – Marketing and Economic Development recommends that the Trustees approve Industrial Incentive Awards to Buckingham Manufacturing Company, Inc., GE Aviation Systems LLC, New Horizon Graphic, Inc. and Owl Wire and Cable, Inc.  The terms of each award and the maximum annual payments are specified in Exhibit ‘1c-A.’ 

 

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

 

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

 

                                RESOLVED, That the Authority hereby approves an Industrial Incentive Award to Buckingham Manufacturing Company, Inc., GE Aviation Systems LLC, New Horizon Graphic, Inc. and Owl Wire and Cable, Inc. as per 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, 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 all actions and execute and deliver 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.    

 


 

 Exhibit “1c- A”

 

Industrial Incentive Awards IIA

 

Buckingham Manufacturing Company, Inc.

 

·         Binghamton (Broome County) – 196 jobs

·         NYSEG service area; typical usage of 700,000 kWh per year

·         Discount (¢/kWh) against NYSEG/ESCO rate

·         IIA of up to 2 ¢/kWh variable, with max award of $15,000 / year

·         1 year initial term

·         Flexible to allow Buckingham Manufacturing Company to participate in any new NYPA power program

 

GE Aviation Systems LLC

 

·         Bohemia (Suffolk County) – 255 jobs

·         LIPA service area; typical usage of 5,000,000 kWh per year

·         Discount (¢/kWh) against LIPA rate

·         IIA of up to 4.4 ¢/kWh variable, with max award of $200,000 /year

·         1 year initial term

·         Flexible to allow GE Aviation Systems to participate in any new NYPA power program

 

New Horizon Graphic, Inc.

 

·         Hauppauge (Suffolk County) – 30 jobs

·         LIPA service area; typical usage of 600,000 kWh per year

·         Discount (¢/kWh) against LIPA rate

·         IIA of up to 3 ¢/kWh variable, with max award of $20,000 /year

·         1 year initial term

·         Flexible to allow New Horizon Graphic, Inc. to participate in any new NYPA power program

 

Owl Wire and Cable, Inc.

 

·         Canastota (Madison County) and Rome (Oneida County)  – 172 jobs

·         National Grid service area; typical usage of  23,000,000  kWh per year

·         Discount (¢/kWh) against National Grid rate

·         IIA of up to 3 ¢/kWh variable, with max award of $700,000 /year

·         1 year initial term

·         Flexible to allow Owl Wire and Cable, Inc. to participate in any new NYPA power program

 

Total recommended Industrial Incentive Award maximum = $935,000

 

 

 

Discussion Agenda

 

2.             a.             Report of the President and Chief Executive Officer

 

                President Richard Kessel said that the tragic earthquake in Haiti had affected some Authority staff members who have family there.  He said that he had asked staff to consider making donations to one of the charitable organizations involved in the relief effort, mentioning that a list of such charities is available on Governor Paterson’s website.  He asked any Trustees, staff or their family members who wish to participate to consider making a donation to Oxfam America.  He said that checks made out to Oxfam America could be submitted to Ms. Lisa Farrell, Executive Secretary in the President’s Office, who will send the checks on to Oxfam America as a group donation from Authority staff.

                President Kessel then presented an overview of the following:

Reorganization of Business Units:  At the December Trustees’ Meeting, the Trustees approved By-laws changes that provided for a clearer reporting structure, with Power Supply and the operational aspects of the Authority’s business now reporting to Mr. Gilbert Quiniones and Energy Services and Technology, Marketing and Economic Development and the support departments charged with the day-to-day responsibility of running the Authority reporting to President Kessel.  He thanked Mr. Quiniones for working with him to effect these organizational changes. 

Changes in Human Resources at the White Plains Office and the Plants:  Mr. Rocco Iannarelli, the Authority’s new Vice President for Human Resources, is working on a complete reorganization of the Human Resources function throughout the Authority.  Mr. Iannarelli and Ms. Francine Evans have begun traveling to the facilities and meeting with the Regional Managers and union representatives about this effort.  One of the goals of the reorganization is to centralize more of the Human Resources functions.  In addition, Mr. Iannarelli is working with Mr. Quiniones and Ms. Terryl Brown to increase the diversity of the Authority’s workforce, particularly at its operating facilities.  Another goal is to increase the opportunities for in-house promotions. 

Hiring of Vice President for Emergency Management/Business Continuity:  Mr. Francis Ryan has started working in this new position.  An emergency management plan for the Authority is crucial to its effectiveness and Mr. Ryan will be continuing the great work done by Mr. Quiniones and Ms. Victoria Simon, who will work with him to develop the plan.  Mr. Ryan has already visited a couple of the Authority’s sites and will visit all of the others in the near future.  A draft emergency management plan will be presented to the Trustees for their approval within the next couple of months.

Reinstitution of the Executive Management Committee:  President Kessel and Mr. Quiniones are now holding monthly meetings with the Authority’s officers and other executives who comprise the Executive Management Committee.  In addition, they will meet on a monthly basis with the rest of the Authority’s senior staff and their direct reports for a wider look at the Authority and how it is doing.  It is critically important that the Authority’s top management know what is happening across the Authority every day.

Community Outreach – Upstate/Downstate:  In the past month, President Kessel has participated in the following events/meetings around the State:

·         Meeting with Local Government Task Force in Massena.

·         Meeting with staff at Ogdensburg Journal/Daily Courier Observer.

·         Inauguration of new members of the Nassau County Legislature on Long Island.

·         State of the State address in Albany.  (Governor Paterson spoke about introducing a bill under which the Authority would fund $65 million in economic development work at Empire State Development.  He also mentioned the Authority’s solar and energy efficiency initiatives in the address.)

·         Citigroup meeting in New York City.

·         Natural Resources Defense Council/Hudson Transmission Partners meeting in New York City.

·         Independent Power Producers meeting in New York City.

·         Sustainability news conference with the new Mayor of White Plains, Mr. Adam Bradley, at the new fuel cell on the side of the White Plains Office building.  The Authority made a commitment to install a fuel cell at White Plains City Hall. 

·         Guest speaker at meeting of Manufacturers’ Association of Central New York in Syracuse  (“MACNY”).

·         Meeting with editorial board of the Syracuse Post Standard.

·         Meeting with new Mayor of Syracuse, Ms. Stephanie Miner.

·         Meeting with CBS, which is deeply concerned about the expiration of the Power for Jobs program.  The Authority is going to work with CBS and the other major broadcast networks.

·         News conference about the Advanced Energy Research Technology Center in Stony Brook, Long Island, which will involve researchers from a number of colleges and universities across the State.  The Center’s building will be completed this summer and the Authority is providing operating funds for the first year of the Center’s operation.

·         Meeting with business leaders from the Power for Economic Prosperity group in Buffalo.  Staff anticipates presenting draft hydropower contracts to the Trustees at their May meeting, after which public hearings on the contracts will be held.

·         News conference on the Greenway Ecological Fund at the Tifft Nature Preserve in Buffalo.

·         Meeting with Buffalo Mayor Byron Brown.

·         Meeting with Erie Canal Harbor Development Corporation in Buffalo.

·         Guest speaker at Hofstra University.

President Kessel thanked all of the Authority’s staff for their hard work, saying that he knew these were not easy times.

                Trustee Eugene Nicandri pointed out that one-quarter of New York State is located north of Watertown.  President Kessel invited Trustee Nicandri to a meeting with Alcoa that will be held in Massena in April. 

                President Kessel said that he travels to Western New York and Northern New York once a month and that he is planning to travel soon to the Southern Tier, including Rome and Binghamton.  The May Trustees’ Meeting will be held in Elmira.  He thanked the Trustees for accompanying him to events and meetings when he travels to their areas of the State.


 

b.             Senior Vice President – Energy Services and Technology NYPA’s Energy Efficiency and Renewable Programs  

                               

 

                Mr. Angelo Esposito introduced a video overview of the Authority’s energy efficiency and renewable programs.  He said that the Authority had funded $145 million of energy efficiency projects in 2009, $28 million more than the previous annual record.  All costs for these programs (both direct and indirect) are recovered from the customers, with no impacts on the Authority’s ratepayers.  The Authority strives to match the amortization periods for the projects to the economic payback period.  Some customers put some cash up at the start of projects in order to reduce the payment periods.  In 2009, work was done on 110 projects with total installed costs of $455 million.  A total of 450 other projects totaling $1.3 billion are being developed.  Two of the large projects in development include a $67 million central boiler and chiller project at the City University of New York’s Technology Center in Brooklyn and a combined heat and power project at Rikers Island.  To date, the Authority has spent a total of $1.4 billion on energy efficiency and renewable projects at 3,300 facilities.  Annual customer savings average $120 million, with cumulative savings of $1.2 billion.

                Statewide, the Authority has installed 30 solar photovoltaic systems.  In the works are offshore wind projects for Lakes Erie and Ontario and the Atlantic Ocean off the coast of Long Island.  Fuel cells are in the planning stages from Buffalo to Long Island, with an advanced 200 kW fuel cell already installed at the Authority’s White Plains office. 

                Mr. Bert Cunningham said that the video was produced entirely in house.  Mr. Kevin O’Keeffe wrote and narrated the script, which Mr. Stephen Shoenholz helped edit. 

                Mr. Esposito said that every Authority department in involved in the energy efficiency and renewable programs, which are an Authority team effort.  He expressed his gratitude to everyone for their support and introduced Mr. Paul Belnick, Vice President for Project Development and Management, and Mr. Richard Hackman, Chief Technology Development Officer. 

                Trustee Nicandri said that Mr. Esposito and the video had done a good job of explaining the Authority’s efforts in the energy efficiency and renewable areas. 

                President Kessel said that the presentation had been the idea of Chairman Michael Townsend and Vice Chairman Jonathan Foster.  He said that presentations would also be prepared on the Authority’s other activities, with the next one focusing on economic development.  President Kessel added that the Authority’s communications team would be working hard to get the word out about these programs.

                In response to a question from Vice Chairman Foster, Mr. Esposito said that 800 of the State University of New York’s 4,000 buildings had been involved in the Authority’s energy efficiency and renewable programs. 

                Responding to a question from Trustee Nicandri, Mr. Cunningham said that the video would be available on the Authority’s website and would be used as a marketing tool.  Trustee Elise Cusack said that when the video is presented, the criteria for participation in these programs should also be enumerated.  Mr. Esposito said that private-sector companies were not eligible to participate in the programs unless they are already Authority customers.  Ms. Elizabeth McCarthy said that the New York State Energy Research and Development Authority sponsors statewide programs to assist the private sector with energy efficiency and renewable projects. 

                In response to another question from Vice Chairman Foster, Mr. Esposito said that the program had doubled in volume over the past five years and would be roughly doubling again over the next few years.  He said that the Energy Services and Technology staff totals 75 people, approximately 20 of whom provide back-office support for the programs.  In addition, another 300+ employees of the Authority’s implementation contractors are working on these projects.  Responding to another question from Vice Chairman Foster, Mr. Esposito said that the Authority’s commercial paper is used to provide capital for the programs. 

                Chairman Townsend said that every school district in the State should be required by law to participate in the Authority’s energy efficiency programs.  He suggested that the Authority’s communications staff work to get local PBS stations to air the video.

                In response to another question from Vice Chairman Foster, Mr. Esposito said that many of the entities approaching the Authority for assistance with energy efficiency and renewable projects are repeat customers.  Vice Chairman Foster suggested that the video and Mr. Esposito’s presentation be used to develop talking points for staff to go out to schools and other potential customers to promote the programs.  President Kessel said that these programs also help building good relationships between the Authority and elected officials and Vice Chairman Foster suggested that the video be shown to the Energy Committees of the State Legislature. 

                Trustee D. Patrick Curley said that he would like to see the Authority develop programs for the private sector.  In response to a question from Trustee Curley, Mr. Esposito said that as far as he knew, the Authority would not qualify as a lender or loan guarantor for private-sector projects, but that he would research the question and report his findings to the Trustees.   


 

c.             Report of the Chief Operating Officer

 

The Power Authority concluded a superb operating year in 2009 by exceeding its annual targets for systemwide net generation and transmission reliability.  In other 2009 highlights related to generation and transmission, the Authority passed significant milestones in the Life Extension and Modernization programs at the St. Lawrence-Franklin D. Roosevelt and Blenheim-Gilboa projects and moved forward with planning for a potential transmission line from Canada to downstate New York.

A new Operations Business Organization, consisting of the Power Supply and Energy Resource Management units, was established as of December 24 under the jurisdiction of the COO.  This report covers the activities of these entities, as well as the Office of the Chief Operating Officer.

 

Power Supply

 

Plant Performance

 

Total net generation for 2009 was 27,349,203 megawatt hours (MWh), surpassing the target of 26,934,429 MWh.1,2   The plants were available to produce electricity 92.2 percent of the time during the year.  Their unforced capacity rating was 98.2 percent, compared with the target of 98.5 percent.3

The annual lost opportunity cost of all unscheduled generation outages was $1.04 million, about 0.05 percent of total generation revenue of $2.03 billion.

In December, systemwide net generation was 2,361,536 MWh, exceeding the projection of 2,242,595 MWh.  This was the 11th month of the year in which the generation target was surpassed, with October the only exception.

The plants were available to produce electricity 92.6 percent of the time during December, while the unforced capacity rating was 98.1 percent, compared with the 98.5 percent target.

The month’s only significant forced generation outage occurred at the 500-megawatt combined-cycle plant in Queens, where one of the three units was shut down for repairs to the   boiler feed pump.4,5  The outage lasted for 56 hours and resulted in a revenue loss of $86,000.

The total lost opportunity cost of all unscheduled outages in December, including those not classified as significant, was about $112,000, compared with generation revenue of $161.5 million.

               

River flows for the month at the Niagara project were at historical averages and slightly above normal based on long- and short-term forecasts.  At St. Lawrence-FDR, flows were slightly above historical averages and consistent with the forecasts.  The December flows were in line with those that prevailed throughout the year. 

Transmission Performance

 

                The transmission reliability for the year was 97.36 percent, exceeding the projection of 96.33 percent.6  However, the December figure of 95.81 percent was below the target of 97.04 percent.  (July was the only other month of 2009 in which the target wasn’t met.)

                There were three unplanned transmission outages in December, totaling 898 hours.

                A 418-hour outage occurred on a capacitor bank at the Marcy Substation because of failed capacitors and corroded connections.7  The Niagara-Rochester segment of one of the Authority’s two 345-kilovolt (kv) cross-state lines to National Grid’s Edic Substation in Marcy was out of service for 80 hours to repair structural damage on a tower.  A cable fault forced the shutdown of the 345-kv Sound Cable Project from Westchester County to Long Island; repairs continue, with a return to service expected by mid-February.

                There were 14 unplanned transmission outages for the year, with a total duration of 968 hours.

Life Extension and Modernization Programs

                Work on the 12th of the 16 units at the St. Lawrence-FDR project was completed on schedule as part of the project’s Life Extension and Modernization (LEM) program, with the unit resuming operation on December 18.8  The 13th unit was removed from service the following day and is expected to return in late July following its refurbishment.  The overall LEM project is scheduled for completion in 2013.

                Work on the fourth and final unit at Blenheim-Gilboa remains on course for completion in June 2010.  (Refurbishment of the third unit was completed in May.)

                Planning for a LEM program at the Niagara project’s Lewiston Pump-Generating Plant continued in December.  A presentation will be made to senior management in the first quarter of this year.

Transmission Initiatives

                On December 18, representatives of NYPA and National Grid met with staff members from Con Edison and the Long Island Power Authority (LIPA) to discuss economic issues related to a proposed transmission line that would deliver power from Canada and upstate renewable energy projects to New York City.

 

          The Con Edison and LIPA representatives commented on preliminary economic studies that had been conducted by NYPA and National Grid and expressed interest in pursuing the project.  They suggested dividing the effort between two subgroups, one to investigate potential commercial arrangements to make the project economically viable and the other to conduct additional economic studies.  NYPA and National Grid will select a consultant to perform future studies and intend to present a proposal for such work to Con Edison and LIPA this month.  

                NYPA staff and our consultant, Navigant, will investigate potential commercial arrangements before entering discussions on that subject with National Grid, Con Edison and LIPA.

As previously reported, a combined system planning study by NYPA and National Grid has identified three options for the new transmission line, with the potential for an additional 1,500 megawatts in transfer capability.  More-detailed system planning studies with Con Edison and LIPA will be conducted after the project economics have been investigated further.

Meanwhile, NYPA and National Grid are close to completing a non-disclosure agreement with Hydro-Quebec Trans Energie (HQTE), which operates the Quebec transmission system and markets system capacity.  The agreement will assist in carrying out further studies with HQTE.

Organizational Realignment

                The assessment of potential operational interfaces between the Power Generation and Transmission units is continuing, with completion anticipated in the first quarter of this year.

As reported last month, we are also reviewing potential organizational synergies between the Energy Control Center, Energy Resource Management and Power Generation operations.

 

Energy Resource Management

                Energy Resource Management’s (ERM) principal responsibility is to manage NYPA’s generation resources in the New York State energy markets so as to maximize benefits and reduce costs to the state’s electricity consumers.  This responsibility includes the bidding of the Authority’s generation into the various New York Independent System Operator (NYISO) markets, developing and implementing fuel supply strategies and formulating NYPA policy positions related to NYISO markets.9

                The Authority’s Scheduling and Settlement group, located at the Clark Energy Center in Marcy, was transferred from the Transmission Business Unit to ERM effective December 30. The new organizational structure provides more precise oversight of all load scheduling and financial settlement matters with the NYISO as well as alignment with bidding and scheduling of NYPA generation resources and all activity pertaining to current and emerging NYISO market rules that may affect the Authority.

                Energy prices in New York State were at a five-year low in 2009, presenting particular challenges to the ERM group.  For example, the average annual settled price in the NYISO’s day-ahead market for Zone A (Western New York) was $31.89 per megawatt hour (MWh), compared with a normal range of $50 to $60 per MWh.

                During the year, ERM’s bids of more than 26,500,000 MWh of NYPA generation into the NYISO markets netted $360 million in power supplier payments to the Authority.  This compared with $373 million in payments for more than 26 million MWh in 2008.

                Traders were further challenged in managing NYPA’s assets because the differential between peak and off-peak prices in 2009 was more than 50 percent below normal, sharply reducing the benefits of selling power in peak periods.  (The average differential for the year in Zone A day-ahead prices was $7 per MWh, compared with a normal average of $16 per MWh.)

                Fuel prices were also significantly lower in 2009.  NYPA’s Fuels Group transacted $252.2 million in natural gas and oil purchases, compared with $631.2 million in 2008.  Reduced oil purchases in anticipation of cessation of operation at the Poletti project contributed to the decrease.

 

Office of the Chief Operating Officer

Sustainability Action Plan

After the Trustees approved the Authority’s Sustainability Action Plan—“Generating Sustainability”—on December 15, the plan was released to all employees. A new sustainability section of the internal PowerNet was also launched, providing details on the effort and ways for employees to become involved.

On January 13, NYPA held a news conference outside our White Plains office building to publicly release the plan and highlight the installation of a new 200-kilowatt fuel cell that could meet about 20 percent of the building’s electricity needs.  In addition, waste heat from the unit, the first fuel cell at a Westchester County office building, will be used to heat and cool the building’s lobby areas.

President and CEO Kessel was joined at the event by White Plains Mayor Adam Bradley, other elected officials and Adiel Gavish, program director of Federated Conservationists of Westchester County, Inc. 

Complementing the news conference was an exhibit in the Jaguar Room, open to the press and NYPA employees, that featured the Authority’s many green activities.  In addition, we launched an updated Sustainability section on the Authority’s external Website and notified more than 1,500 stakeholders of the plan’s release via e-mail.

 

GLOSSARY

 

Net generation—The energy generated in a given time period by a power plant or group of plants, less the amount used at the plants themselves (station service) or for pumping in a pumped storage facility.

 

Megawatt hour—The amount of electricity needed to light ten thousand l00-watt light bulbs for one hour.  A megawatt is equal to 1,000 kilowatts and can power about 800 homes, based on national averages.

 

Unforced capacity rating—All power plants have an installed capacity, or ICAP, meaning the amount of power they could generate under perfect conditions.  Since conditions are not always perfect and plants are shut down, there is a second measurement, called the unforced capacity, or UCAP, which is how much power a plant actually can produce.  For New York State power plants, this measurement is influenced by the amount of time a plant is forced out of service when it is called into service through the New York Independent System Operator to

provide energy.

 

Outage—The removal of a power plant or transmission line from service.  Outages may be scheduled for purposes such as anticipated maintenance, or forced by unexpected events.  A significant forced or emergency outage of an individual generating unit is an event of more than 72 hours in duration, entailing a repair cost of more than $75,000 or resulting in more than $50,000 of lost revenues.  A significant forced or emergency outage of an individual transmission line is an event that directly affects the reliability of the state’s transmission network, or the availability of any component of the network, for more than eight hours or has a repair cost of more than $75,000.

 

Boiler feed pump—A component that supplies high pressure, high temperature water to the boiler, where it is converted into steam used to drive the turbine-generator to produce electricity.

 

Transmission reliability—A measurement of the impact of forced and scheduled outages on the statewide system’s ability to transmit power.

 

Capacitor bank—A collection of individual capacitors, which are devices that can store an electrical charge and are used to support system voltage.  There are two capacitor banks at the Marcy Substation, each consisting of 720 capacitors and associated equipment.  Each bank is about 90 feet long, 60 feet wide and 20 feet tall.  (Voltage is a measurement of the force that pushes electricity through a transmission line, much as water is forced through a hose.  The performance of a transmission line, especially those of medium length or longer, depends on maintaining voltage at certain levels.  The maximum amount of power a line can transmit is reduced as voltage decreases.)

 

Life Extension and Modernization Program—A major initiative by the Power Authority to ensure that a particular power project operates at maximum efficiency far into the future.  In Life Extension and Modernization programs currently under way at the St. Lawrence-Franklin D. Roosevelt and Blenheim-Gilboa projects, the turbines are being replaced and the generators and other components significantly refurbished.

 

New York Independent System Operator—A not-for-profit organization that operates New York State’s transmission system, administers the state’s wholesale electricity markets and engages in planning and forecasting to ensure the future reliability of the statewide power system.

 

 

 

d.             Report of the Chief Financial Officer

In response to a question from Vice Chairman Foster, Ms. McCarthy said timing issues were the major reason for the Authority’s underspending of its projected capital expenditures in 2009 by $60 million.  She said that this amount had been included in the 2010 budget.


 

e.          Executive Vice President and General Counsel – Special Report on PAAA

  

 

                Ms. Brown provided an overview of the governance provisions of the recently enacted changes to the Public Authorities Law (attached as Exhibit “A”).  She said that she will cover the compliance provisions of the legislation at the February Trustees’ Meeting and the new reporting requirements at the March Trustees’ Meeting. 

                Among the new governance provisions:

In response to a question from Vice Chairman Foster, Ms. Brown said that the new law goes into effect on March 1, 2010.  She asked the Trustees to review the new provisions and to contact her with any questions. 

                In response to a question from Chairman Townsend, Ms. Brown said that the Authority Budget Office  would be working with the Office of the New York State Attorney General to develop an oath for authority board members to sign, but that she wasn’t sure of the timing for this. 

 

Ms. Karen Delince said that Ms. Brown had asked her to explain that the next three items were being presented to the Trustees pursuant to Section 2879 of the Public Authorities Law and the Authority’s Expenditure Authorization Procedures and Guidelines for Procurement Contracts. 

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

The Authority’s Expenditure Authorization Procedures (“EAPs”) require the Trustees’ approval for the award of non-personal services, construction, equipment purchase or non-procurement contracts in excess of  $3 million, as well as personal services contracts in excess of $1 million if low bidder, or $500,000 if sole-source or non-low bidder.
 

3.                   Information Technology Initiatives – Capital Expenditure Authorization  

               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to authorize capital expenditures of $2,918,000 for the implementation of Information Technology (‘IT’) Initiatives in 2010 as per the Authority’s Expenditure Authorization Procedures (‘EAPs’).  These expenditures have been included in the 2010 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 10 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 2010 is greater than $3 million, Trustee approval is requested as per the Authority’s EAPs.

 

DISCUSSION  

 

“The following lists the 2010 IT Initiatives, along with the estimated cost of each:

 

The SAP R/3 applications will be interfaced to the existing Document Management System LiveLink.  This will allow existing historical transactions to be archived and provide extension of processes such as Accounts Payable and Procurement to integrate paper documents into the system.

 

Presentation of and data collection for the various corporate measures used by the dashboard and the Authority’s monthly scorecard will be integrated within the SAP ERP 2005 environment.

 

 

Implementation of new software to provide tools to Marketing, Energy Services and Technology and Public Affairs to maintain customer information, up to date diary of interactions and facilitate letters, mailing and other correspondence.


 

 

Total      $2,918,000

FISCAL INFORMATION

 

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

 

RECOMMENDATION

 

                “The Chief Information Officer – Information Technology recommends that the Trustees approve the Capital Expenditure Request for $2,918,000 for Information Technology Initiatives.

 

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

 

                 Ms. Delince said that the Authority’s Expenditure Authorization Procedures (“EAPs”) require the Trustees’ approval for the award of non-personal services, construction, equipment purchase or non-procurement contracts in excess of $3 million.  She said that these proposed Information Technology expenditures totaled just under $3 million, so the decision had been made to present them to the Trustees for their approval. 

                Mr. Dennis Eccleston presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Trustee Nicandri, Mr. Eccleston said that LiveLink was for Authority internal document management rather than for customer interaction.

                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 2010                                                     $2,918,000

 

AND BE IT FURTHER RESOLVED, That the Acting 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.

 


 

4.                   Niagara Power Project – New Niagara Warehouse Authorization and Contract Award  

               

                 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

                “The Trustees are requested to authorize capital expenditures in the amount of $23.5 million and approve the award of a two- year contract to SLR Contracting & Service Company, Inc. (‘SLR’) of Buffalo, New York, in the amount of $16,660,000 for the construction of the New Niagara Warehouse and Office Complex Project (‘Project’) located between Witmer Road and the Power Authority Service Drive in the Towns of Lewiston and Niagara.

 

BACKGROUND

 

                “In accordance with the Authority’s Expenditure Authorization Procedures, the award of construction contracts in excess of $3 million and contracts exceeding one year require the Trustees’ approval.

 

“As part of the ‘Good Neighbor Agreement’ between the Authority and Niagara University (‘NU’), the Authority has agreed to build a new warehouse and transfer the existing warehouse to NU by May 1, 2012.  NU has turned over a 6.5 acre parcel of land for the Authority’s use to construct the new warehouse located along Witmer Road, in the Towns of Lewiston and Niagara.  Logistics Consultants Inc. developed a design criteria and full material handling specifications for the new warehouse.  Based on these documents, Nelson Associates Architectural Engineering completed the detailed design.  Construction of the new facility will be completed by July 1, 2011.

 

DISCUSSION

 

                “In 2008, funding in the amount of $1,750,000 was approved for Logistics Consultants, Inc. (‘LCI’) to provide the design criteria for the new warehouse and for Nelson Associates Architectural Engineers (‘NAAE’) to perform the detailed engineering.  The funding also provided for the environmental testing of the soils for the warehouse parcel and utility corridor and Authority personnel support for these activities.  As planned, LCI provided a design criteria and renderings in June 2008.  The design criteria were issued for bid of the detailed design in July 2008.  NAAE was the low bidder and provided a detailed design for the warehouse parcel and utility corridor that was issued for construction bids in July 2009.  Bids were received in October 2009 and were evaluated by the evaluation committee.  Meetings were held with the Towns of Niagara and Lewiston planning boards to receive approval to connect utilities of the new warehouse to the respective Towns.  The Town of Lewiston granted the Authority the ability to connect to their sewer system and the Town of Niagara granted the Authority the ability to connect to their potable water system.

 

                “In order to allow for the construction of the Project in accordance with the prescribed construction schedule, the Trustees are requested to approve the CEAR with the costs outlined below.

 

                The total Project cost is estimated at $23.5 million, as follows:

 

                Preliminary Engineering and Design                                                $    145,000

 

                Detailed Engineering, Design and Permitting                                  $ 1,054,000

 

                Procurement of Equipment and Furniture                                      $ 3,474,000

 

                Total Construction/Installation                                                        $16,898,000

 

                Authority Indirect and Direct Expenses                                          $  1,906,000

 

                TOTAL                                                                                                  $23,477,000

 

                “Included in the total construction/installation cost are items for the decommissioning of the existing warehouse, moving of inventory and server equipment from the existing warehouse to the new warehouse by the Authority and other contractors.  These costs will not be part of SLR’s contract but are provided for in the CEAR.

 

CONSTRUCTION CONTRACT

 

“An RFP was published in the NYS Contract Reporter on July 27, 2009 for the construction of the Project.  One hundred and seventy six companies downloaded the RFQ from the Authority’s website.  Six Addendums were issued from August 31, 2009 through October 1, 2009, clarifying questions and providing additional information in support of this Project.  On October 6, 2009, seven proposals were received from the following bidders:

 

As Received Firm Lump Sum Prices:

 

Vendor                                                                   Price Bid                                Options                  Total

SLR Contracting                                                  $16,320,000                         $340,000               $16,660,000

Savarino Companies, LLC                                                $16,632,000                         $183,000               $16,815,000

Scrufari Construction Co., Inc.                         $16,670,000                         $326,400               $16,996,400

L.P. Ciminelli        Construction Corp.              $16,831,200                         $233,000               $17,064,200

Sicoli and Massaro                                              $17,308,000                         $  14,000               $17,322,000

Concept                                                                 $17,690,000                         $597,300               $18,287,300        

Walter S. Johnson                                                $19,105,000                         $697,000               $19,802,000

Fair Cost Estimate                                               $21,539,096                         $383,400               $21,922,496

 

“On November 10, 2009, post bid addendum #1 was issued requesting pricing for the construction of the sewer tie-in to the Town of Lewiston through NU’s property.

 

“On December 9, 2009, post bid addendum #2 was issued extending the construction completion date to July 1, 2011 from the previously scheduled completion date of December 31, 2010.  This change was negotiated with NU so that additional changes required by NU could be incorporated without having to compress the schedule and avoid additional costs.

 

“The total project cost to be awarded to SLR includes options for the sewer tie-in, a new duct bank and equipment related to HVAC, warehousing and conveying systems that are detailed in the CEAR and bid proposal.  

 

                “The proposals were reviewed by an evaluation committee comprising staff from Niagara, Project Management, Engineering and Procurement, as well as the Authority’s consultant, NAAE. 

 

                “SLR a NYS Certified M/WBE was the lowest priced qualified bidder.  SLR will be providing a full-time staff on site for the duration of the project, including a Project Manager, Construction Quality Control Manager, Project Superintendent, Site Safety and Health Officer and Project Administrator.  SLR’s financial stability is also acceptable based on Dunn and Bradstreet Reports.  SLR is able to meet the required schedule for this project while maintaining strict safety and quality.

 

                “The money for the 2010 expenditure is included in the 2010 capital budget request.

 

FISCAL INFORMATION

 

                “Payment associated with this Project will be made from the Authority’s Capital Fund.

 

RECOMMENDATION

 

“The Senior Vice President – Power Supply Support Services, the Vice President – Procurement, the Vice President – Engineering, the Regional Manager – Western New York and the Vice President – Project Management recommend that the Trustees authorize capital expenditures of $23.5 million and award of a contract to SLR of Buffalo, New York for $16,660,000 to complete construction of the New Warehouse and Office Complex.

 

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

 

Ms. Delince said that this item was being presented to the Trustees for their approval in accordance with Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts, which require the Trustees’ approval for procurement contracts involving services to be rendered for a period in excess of one year, as well as the Authority’s Expenditure Authorization Procedures, which require the Trustees’ approval for the award of non-personal services, construction, equipment purchase or non-procurement contracts in excess of  $3 million.  The proposed two-year contract is for $16.66 million. 

Mr. John Canale presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Trustee Curley, Mr. Canale said that SLR Contracting & Service Company, Inc. is a New York State-certified Minority/Women-Owned Business Enterprise.  Responding to a question from Chairman Townsend, Mr. Canale said that the Fair Cost Estimate was derived by the Authority’s cost-estimating group, which received the same package as the potential bidders but did not see the bids submitted in response to the RFP.  He said that staff did not consider the greater-than-20% differential between the Fair Cost Estimate and the winning bid a cause for concern because the bidders had been interviewed to ensure that they understood what was involved in the project. 

                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 $23.5 million and a contract award to SLR Contracting & Service Company, Inc., Buffalo, New York for $16,660,000 to complete the construction of the New Niagara Warehouse and Office Complex; 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.

 

 

 

5.                   Renewable Energy and Clean Transportation Maintenance Services – Contract Awards  

               

 

The President and Chief Executive Officer submitted the following report:

 

SUMMARY

 

“The Trustees are requested to approve contracts with the firms of Mercury Solar Systems, Inc. of Port Chester, New York and RDS Industries, Inc., of Flushing, New York for an initial amount of $975,000 in aggregate for the provision of mechanical, civil and electrical maintenance services for rooftop-mounted solar photovoltaic systems and other renewable energy and clean transportation vehicles and infrastructure in various locations throughout New York State.  The terms for these contracts will be three years with an option for two additional years.

 

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 purchase contracts in excess of $3,000,000, as well as personal services contracts in excess of $1,000,000 if low bidder, or $500,000 if sole source or non-low bidder, requires the Trustees’ approval.

 

“The Authority has installed over 35 solar photovoltaic systems, 15 fuel cell systems and has placed into service a variety of electric drive vehicles at various customer and stakeholder locations across New York State.  Many of these systems require specialized infrastructure and technical services to maintain reliability over their operating life.

 

DISCUSSION

 

“In November 2009, the Authority issued a bid for maintenance services for solar photovoltaic, fuel cell and clean transportation vehicles and infrastructure.  One hundred and twelve (112) firms were invited to bid for such services; the contract was also posted in the New York State Contract Reporter.  Two bids were received; Mercury Solar Systems and RDS Industries.  Based on a review conducted by Authority staff of Mercury Solar and RDS Industries qualifications and experience as electrical contractors and PV installers, in addition to their competitive pricing, staff recommends the award of contracts to Mercury Solar Systems, Inc. and RDS Industries, Inc.  The intended term of these contracts is three years with an option for two additional years each, with a total aggregate expenditure of up to $975,000, subject to the Trustees’ approval.

 

“The contracts with Mercury Solar Systems, Inc. and RDS Industries, Inc. (Q-09-4647JB; PO # TBA) would become effective on February 1, 2010, subject to the Trustees’ approval.  The purpose of these contracts is to provide for mechanical, civil and electrical maintenance services for the Authority’s rooftop-mounted solar photovoltaic systems and other renewable energy and clean  transportation resources in various locations throughout New York State, predominantly in the New York City metropolitan area, on an ‘as needed’ basis.  The contractor’s primary responsibilities include the diagnosis and repair of photovoltaic systems by a licensed electrician with a solid understanding of the technology.

 

“The issuance of multi-year contracts is recommended from both a cost and efficiency standpoint.  In many cases, reduced prices can be negotiated for these longer term contracts. Since these services are typically required on a continuous basis, it is more efficient to award longer term contracts than to rebid these services annually.

 


 

FISCAL INFORMATION

 

“Funding for these contracts will be provided from the Operating Fund.  Payments for 2010 are included in the 2010 O&M budget.  The total cost of the contracts will not exceed $975,000.

 

RECOMMENDATION

 

The Senior Vice President – Energy Services and Technology and the Chief Technology Development Officer, recommend that the Trustees approve three-year contract awards with an option of two additional years, in the amount of $975,000 to Mercury Solar Systems, Inc. and RDS Industries, Inc. for mechanical, civil and electrical maintenance services for rooftop-mounted solar photovoltaic systems and other renewable energy and clean transportation vehicles and infrastructure.

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

 

                Ms. Delince said that this item was being presented to the Trustees for their approval in accordance with Section 2879 of the Public Authorities Law and the Authority’s Guidelines for Procurement Contracts, which require the Trustees’ approval for procurement contracts involving services to be rendered for a period in excess of one year.  The two contracts included in this item each have three-year terms.

                Mr. Richard Hackman presented the highlights of staff’s recommendations to the Trustees.  In response to a question from Trustee Nicandri, Mr. Hackman said that two bids, each from New York State firms, were received in response to the RFP.   

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 contracts in the amount of up to $975,000 to Mercury Solar Systems, Inc. and RDS Industries, Inc. for mechanical, civil and electrical maintenance services for rooftop-mounted solar photovoltaic systems and other renewable energy and clean transportation vehicles and infrastructure in various locations throughout New York State; and be it further

 

RESOLVED, That Operating Fund monies will be used to fund contract costs in the amount and for the purposes listed below:


 

 

 

 

Operating Funds

Expenditure Authorization

(not to exceed)

 

Three-year contracts with an option for two additional years to Mercury Solar Systems, Inc. and RDS Industries, Inc. for mechanical, civil and electrical maintenance services for rooftop-mounted solar photovoltaic systems and other renewable energy and clean transportation vehicles and infrastructure.

 

Total

$975,000

                                                                               

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.


 

6.                   Resolution – Stephen P. Shoenholz

 

                Mr. Quiniones read a resolution honoring Mr. Shoenholz as he retires after more than three decades of service at the Authority.  Trustee Cusack said that Mr. Shoenholz’s retirement was a huge loss for the Authority and wished him luck in his future endeavors.  Mr. Shoenholz thanked the Trustees for the resolution and Mr. Quiniones for his very generous introduction.  He added that, having written a number of such resolutions over the years, he had been very impressed by the high quality of this one.  Mr. Shoenholz said that in his nearly 34 years with the Authority he had been fortunate enough to participate in a lot of great Authority accomplishments.  He expressed his best wishes for everyone at the Authority.     

 

WHEREAS, Stephen P. Shoenholz is the quintessential example of a dedicated, hard working and experienced professional who has been a mainstay of the New York Power Authority’s Public Affairs Department for more than three decades; and

 

WHEREAS, Mr. Shoenholz held various crucial NYPA positions, starting out in 1976 as Assistant Director of Public Information before steadily rising to the position of Vice President of Public Affairs, in advance of becoming the department’s eminence grise, in which he exercised influence over numerous areas of NYPA’s external and internal communications; and

 

WHEREAS, Mr. Shoenholz, as a writer, editor and spokesman, has embodied a standard of excellence that has contributed greatly to people’s understanding of the broad and essential contributions the Power Authority makes to New York State’s electric power system, economy and environment; and

 

WHEREAS, Mr. Shoenholz’ tremendous knowledge of NYPA, superlative writing and editing skills and tremendous work ethic have contributed to his becoming the Power Authority’s resident historian, with those qualities perhaps best exemplified by his authoring of a 75th Anniversary edition in 2006, Bold Dream…Shining Legacy, recounting the Authority’s history from its founding in 1931 under then-Governor Franklin D. Roosevelt to its becoming the largest state-owned electric utility in the country; and

 

WHEREAS, Mr. Shoenholz’ keen intelligence and other distinctive qualities have led to his working closely with senior management on countless speeches for key constituent groups, as well as policy papers and other significant written materials; and

 

WHEREAS, before joining the Authority staff, Mr. Shoenholz, a graduate of the Columbia University Graduate School of Journalism, worked for eight years at The Newark News as a sportswriter, foreign correspondent and editorial writer, and then for five years as director of Public Information at Cooper Union College in New York City;

 

WHEREAS, those experiences in journalism and public relations served Mr. Shoenholz well in the various NYPA positions that he held, including those involving extensive interactions with reporters;

 

WHEREAS, Mr. Shoenholz has been a mentor to numerous NYPA staff members, characterized by his unstinting generosity in sharing knowledge, experience and sage advice; and

 

WHEREAS, Mr. Shoenholz has made a significant difference for virtually all of the staffers he has come in close contact with, helping to make them wiser and more effective in the performance of what they do on behalf of the Power Authority and New York State; and

WHEREAS, Mr. Shoenholz’ honesty, integrity and sense of humor are other standout qualities that have made him so highly esteemed by those fortunate to work with him during his long, exemplary career at NYPA;

 

NOW THEREFORE BE IT RESOLVED, that the Trustees of the Power Authority of the State of New York extend their deepest appreciation to Mr. Shoenholz for his dedicated service and varied contributions to NYPA and wish him, his wife, Margie, and their wonderful family much health, happiness and success. 

 

January 26, 2010

 

 


 

7.                   Motion to Conduct an Executive Session

 

Mr. Chairman, I move that the Authority conduct an executive session pursuant to Sections 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.  Upon motion made and seconded, an Executive Session was held.

 


 

8.                   Motion to Resume Meeting in Open Session

 

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


 

9.                   Amendments to the Authority’s By-laws

 

The President and Chief Executive Officer submitted the following report

 

The Trustees are requested to amend the Authority’s By-laws for the purpose of:  (1) implementing changes necessitated by Chapter 506 of the Laws of 2009, which amended the Power Authority Act and other provisions of the Public Authorities Law; and (2) making other conforming and non-substantive changes.

 

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

 

The Chief Operating Officer, the Executive Vice President and General Counsel and I recommend that the Trustees approve the proposed By-laws amendments.

 

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

 

                RESOLVED, That the revisions to the By-laws (originally adopted on April 9, 1954, and last amended on December 15, 2009) discussed in the attached memorandum of the President and Chief Executive Officer and attached hereto as Exhibit “B,” be hereby adopted; 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.

 

 


 

10.                Next Meeting

 

The next Regular Meeting of the Trustees will be held on Tuesday, February 23, 2010, at 11:00 a.m. at the Authority’s New York Office, 501 7th Avenue, 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

2:10 p.m.

 

 

 

Karen Delince

Corporate Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                

 

 

JANUARY MINS.10