Source: http://www.nypa.gov/Trustees/2013%20minutes/December/MINUTES%20-%20December%2017.htm
Timestamp: 2015-01-25 22:19:55
Document Index: 132951925

Matched Legal Cases: ['art 203', 'art 203', 'art 203', 'art 203', 'art 203', 'art 203']

��������������� Introduction������������������������������������������������������������������������������������������������������������������������������ 2
1. Adoption of the December 17, 2013 Proposed Meeting Agenda������������������������������������� 3�������������������������������������� 2. Consent Agenda:���������������������������������������������������������������������������������������������������������������������� 4
of the Regular Meeting held on September 24, 2013������������������������� 5
b. 500 MW Power Plant � Storage Facilities � Capital ������������������������������������������ 6
Increased Funding � Municipal and Rural ������������������������������������ 8
����������������������������������� Cooperative
Electric Utilities Electric-Drive Vehicle ����������������������������������� Program
(Services) Contracts � Business Units and ��������������������������������� 10��������������������� 2d-A; 2d-B
��� Facilities � Awards, Extensions and/or
Additional ��� Funding
e. Plattsburgh
to Vermont Transmission Facility (PV-20) � �������������������������������� 18��������������������� 2e-A
��� Acquisition of Property � Map No. CL-1506, ��� Parcel No. 1506
f. St. Lawrence
River Power Project � Conveyance of Surplus ������������������������� 20��������������������� 2f-A
��� Lands to the County of Franklin � Map No.
CL-909, ��� Parcel No. 951 and Map No. CL-910, Parcel
g. Proposed Schedule of Trustees� Meetings in 2014�������������������������������������������� 22
h. Transfer of
Western New York Hydropower Allocations �������������������������������� 23��������������������� 2h-A
Delphi �Automotive PLC and Proposed
Contract � ����������������������������������� Notice
Contract for the Sale of Western New York ���������������������������������� 27��������������������� 2i-A; 2i-B
��� Hydropower to M&T Bank � Transmittal to
Discussion Agenda:�������������������������������������������������������������������������������������������������������������������������������� 30
a. President and Chief
Executive Officer ���������������������������������������������������������������� 30��������������������� 3a-A
b. Chief Operating Officer ����������������������������������������������������������������������������������������� 31��������������������� 3b-A
Subject����������������������������������������������������������������������������������������������������������������� ��������������� ��������������� Page
Financial Officer������������������������������������������������������������������������������������������� 33��������������������� 3c-A
Risk Officer���������������������������������������������������������������������������������������������������� 34��������������������� 3d-A
Vice President � Strategic Planning ��������������������������������������������������������� 36��������������������� 3e-A
4. 2014 Operating Budget and Filing of the 2014-2017 Four-Year ����������������������������������� 38��������������������� 4-A � 4-E
��� Financial
Plan Pursuant to Regulations of the Office of the ��� State
Comptroller 5. Power Allocations:������������������������������������������������������������������������������������������������������������������� 43
a. Power Allocations Under the Recharge New York Program���������������������������� 43��������������������� 5a-A � 5a-E
b. �Allocations of
Hydropower and Notice of Public Hearing������������������������������ 49��������������������� 5b-A; 5b-A-1 � ����������������������������������� ��������������������������������������������������������������������������������������������������������������������������� 5b-A-3;
6. Awards of Fund Benefits from the Western New York
Economic �������������������������������� 54��������������������� 6-A-1; 6-A-2;
������������������� Development
Fund Recommended by the Western New York ������������������������������������������������������������ 6-B;
������������������� Power
Proceeds Allocation Board
7. Motion to
Conduct an Executive Session��������������������������������������������������������������������������� 59
Resume Meeting in Open Session���������������������������������������������������������������������� 60
9. Next Meeting���������������������������������������������������������������������������������������������������������������������������� 61
10. Closing��������������������������������������������������������������������������������������������������������������������������������������� 62������������������������������������� ��������������� Minutes of the
videoconference at the following participating locations at approximately 11:05
Center: Acurate Court Reporting
247 West Fayette Avenue, Suite 202, Syracuse, NY 13202
M. Mahoney, Vice Chair � via video conference
������������������������������� Eugene Nicandri, Trustee
������������������������������� Jonathan Foster, Trustee
������������������������������� R. Wayne LeChase, Trustee
������������������������������� Terrance
P. Flynn, Trustee (via telephone conference)
������������������������������� ������������������������������������������������������� ----------------------------------------------------------------------------------------------------------------------------------------------------
of Staff and Director of Energy Policy
William Nadeau���������������������������������� Senior Vice President and Chief Risk
James Pasquale���������������������������������� Senior Vice President � Economic
President � Project Manager
Eccleston�������������������������������� Vice
President � Information Tech/Chief Information Officer
Gryzlo�������������������������������������� Vice
President and Chief Ethics and Compliance Officer
Davis������������������������������������� Vice
President � Financial Planning and Budgets
Huvane��������������������������������� Vice
President � Marketing � Business and Municipal Marketing
Leary��������������������������������������� Vice
President � Community and Government Relations
Lesy Pardo������������������������������������������� Vice President � Internal
Karen Delince�������������������������������������� Corporate Secretary
Robert Hopkins���������������������������������� Director �
Budgets Michael Saltzman������������������������������ Director � Media
Guy Sliker�������������������������������������������� Director
� Clean Energy Technology � Renewable Energy
Andrea Luongo����������������������������������� Senior Project Engineer II �
John Markowitz���������������������������������� Lead Research & Technology
John Giumarra������������������������������������ Account Executive � Business
Sean Doyle������������������������������������������ Real Estate Administrator
� Purchasing Lorna M. Johnson������������������������������ Associate
Sheila Baughman����������������������������������������������� Assistant Corporate
Secretary Alex Southwell������������������������������������ Counsel � Gibson Dunn &
������������������������������� Chairman John Koelmel presided over the meeting.� Corporate Secretary Delince kept the Minutes.
John Koelmel welcomed the Trustees and staff members who were present at the
meeting.� He said the meeting had been
of the December 17, 2013 Proposed Meeting Agenda
adopted.� 2. Consent
Agenda:��������������� ����������� �Upon motion made and seconded, the Consent
Agenda was approved.� Vice Chair Mahoney was recused
from the vote on item
#2d (Procurement (Services) Contracts � Business Units and Facilities �
Awards, Extensions and/or Additional Funding) as it pertains to CHA Consulting, Inc. and Orrick Herrington &
Sutcliffe LLP and Trustee LeChase as it pertains to CHA
Consulting, Inc. and Nixon Peabody LLP.� Since Vice Chair Mahoney and Trustee LeChase
were recused from the vote on CHA Consulting, it failed to meet the votes
necessary for its approval.
Vice Chair Mahoney was also recused from the vote on item
#2i (Direct Sale Contract for the Sale of Western New York Hydropower to
M&T Bank � Transmittal to the Governor).
Minutes of the Regular Meeting held on September 24, 2013 were unanimously adopted.
b. 500 MW Power Plant � Storage Facilities � Capital
Trustees are requested to approve a Capital Expenditure Authorization Request
for the design and construction of storage facilities for the 500 MW Power
Plant for the total amount of $4.7 million.�
The storage buildings are required for hazardous materials and universal
waste and a separate building to support Site Operations. BACKGROUND
Expenditure Authorization Procedures, the award of non-personal services or
equipment purchase contracts exceeding $3 million require the Trustees�
result of the deconstruction of the Poletti Power Plant, the existing drum
storage facility, which does not meet current state codes and standards, is
being closed and other storage buildings are being demolished.� To replace these required facilities, a new
hazardous materials and universal waste storage building will be constructed to
meet current codes and standards.� A
building for Site Operations to store trucks, boom lifts and other maintenance
equipment will also be constructed.� The
new facilities are scheduled to be completed by the end of 2014.� � The cost for the services and materials, including design,
installation and all support labor is included in this Capital Expenditure
Authorization Request.� The request for
$4.7 million is to fund consultant services for engineering and design, permit
expediting services, and construction management, and the construction of the
facilities.���� ��������������� The
total project cost over a two-year period is estimated at $4.7 million, as
��������������� Engineering
$��� 294,000
Authority Direct/Indirect��� $��� 462,000
TOTAL� :
$ 4,700,000� FISCAL INFORMATION
��������������� Payment
associated with this project will be made from the Authority�s Capital Fund and
has been included in the 2014 budget.
The Senior Vice President �
Operations Support Services and Chief Engineer, the Acting Vice President �
Project Management, the Acting Vice President � Procurement and the Regional
Manager � SENY recommend that the Trustees approve capital expenditures in the
amount of $4.7 million for the installation of the 500 MW Storage Facilities at
the Astoria Site.
the approval of the above-requested action by adoption of a resolution in the
form of the resolution below.�
��������������� ��������������� The following resolution, as
Expenditure Authorization Procedures, approval is hereby granted to authorize
capital expenditures in the amount of $4.7 million for the installation of� storage facilities at the 500 MW Power Plant
at Astoria, as recommended in the foregoing report of the President and Chief
c. Request for Increased Funding � Municipal and Rural
Cooperative Electric Utilities Electric-Drive
Vehicle Program����������������������� The President and Chief Executive
authorize $2 million in increased funding for the Municipal and Rural
Cooperative Electric Utilities Electric-Drive Vehicle Program (�Muni-Coop E-D
Program or �Program�).� This amount is in
addition to the $3 million approved by the Trustees at their May 2003 and
February 2009 meetings.� This program
enables the Authority�s Municipal (�Munis�) and Rural Electric Cooperative
(�Coops�) utilities to purchase electric and hybrid-electric vehicles for use
in their fleets. BACKGROUND
��������������� Since
the 1980s, through its Energy Services Programs
(�ESP�), the Authority has offered various types
of energy services and clean energy technologies programs to participants
throughout the State to help them lower their energy usage and/or achieve a
cleaner and more energy efficient use of energy and natural resources.� At their May 20, 2003 meeting, the
Trustees authorized $1.2 million to finance the Muni-Coop E-D Program, a new
partnership program between NYPA and the Munis and Coops.� This program facilitated the purchase of
electric and hybrid-electric vehicles for the Muni and Coop systems� municipal
fleets.� At their meeting on February 24,
2009, the Trustees authorized an additional $1.8 million to finance the program.� As of September 1, 2013, forty-six (46) such
vehicles were placed with 21 municipal systems.
The current Muni-Coop E-D Program
is available to all Muni and Coop utilities.�
The Muni and Coop utilities apply to the Authority for funding to
purchase on-road passenger vehicles; heavy-duty work vehicles; or off-road work
vehicles.� The vehicles are used by the
Muni and Coop utilities� personnel and/or their affiliated municipal agencies
to carry out their functions.� The funds
made available to the Muni and Coop utilities for the purchase of these
vehicles are recovered over three years through a monthly bill to the
participating utility. �
In addition, the Trustees have
authorized that the full-requirements Muni and Coop utility customers,
regulated by the Authority, be permitted to recover from their retail customers
all costs associated with the electric-drive vehicle finance program, as well
as any other energy efficiency programs and initiatives that the Authority
offers to the Muni and Coop Systems.�
Recovery of these costs will be through the Purchased Power Adjustment
Charge.� The partial-requirements
systems, regulated by the New York Public Service Commission (�PSC�), may
request similar permission from the PSC to recover costs associated with the vehicle
purchase and other energy efficiency programs from their customers.
If approved by the Trustees, the
additional funding will enable the Authority to continue its successful
partnership with the Munis and Coops to expand the integration of
electric-drive vehicles into their municipal fleets. FISCAL INFORMATION
The total Muni-Coop E-D Program
cost is not to exceed $5 million.� These
costs, including any financing costs, will be recovered directly from the
Program participants.� Except for the
Petroleum Overcharge Restitution (�POCR�) funds, discussed below, the funds
will be recovered over a period of up to three years through an electric bill
surcharge. The Program will be funded from
Commercial Paper Notes proceeds and/or Operating Fund monies.� A small portion of the funding will be
supplemented by POCR funds allocated to the Authority by the New York State
legislature; the POCR funding will be used strictly to offset the internal NYPA
interest charges.� RECOMMENDATION
The Senior Vice President � Strategic
Planning and the Senior Vice President � Economic Development and Energy
Efficiency recommend that the Trustees authorize an additional $2 million in
funding for the implementation of the Municipal and Rural Cooperative Electric
Utilities Electric-Drive Vehicle Program and continue the use of the Purchased
Power Adjustment Charge to allow the full-requirements municipal and rural
cooperative electric utilities regulated by the Authority to recover their
��������������� RESOLVED, That an Electric-Drive Vehicle
Program, as described in the foregoing report of the President and Chief
Executive Officer, is hereby authorized; and be it further ��������������� RESOLVED, That the
Electric-Drive Vehicle Program described above may be funded with the proceeds
of Series 1, 2, or 3 Commercial Paper Notes, Series and Extendible Municipal
Commercial Paper Notes, Operating Fund monies, and/or Petroleum Overcharge Restitution
funds allocated to the Authority by New York State legislation, with such POCR
funding being in amounts as deemed advisable by the Senior Vice President �
Economic Development and Energy Efficiency; and be it further ��������������� RESOLVED, That the
Trustees hereby authorize the full-requirements Municipal and Rural Cooperative
systems served by the Authority to recover costs for this, and other energy efficiency
programs, through the Purchased Power Adjustment Charge; and be it further
d. Procurement (Services)
Contracts � ����������������������� Business
(services) contracts listed in Exhibit �2d-A,� as well as the continuation
�2d-B,� in support of projects and programs for the Authority�s Business
change- order value of a personal services contract exceeds $500,000, or when
the cumulative change-order value of a non-personal services, construction,
equipment purchase or non-procurement contract exceeds the greater of $1
million or 25% of the originally approved contract amount not to exceed $3
contracts, which range in estimated value from $500,000 to $6 million.� Except as noted, these contract awards do not
of multiyear contracts is recommended from both cost and efficiency
firms identified in Exhibit �2d-B� have provided effective services, the issues
or projects requiring these services have not been resolved or completed and
the need exists for continuing these contracts.�
The Trustees� approval is required because the terms of these contracts
will exceed one year including the extension, the term of extension of these
contracts will exceed one year and/or because the cumulative change-order
limits will exceed the levels authorized by the EAPs in forthcoming change
orders.� The subject contracts contain
provisions allowing the Authority to terminate the services at the Authority�s
the contracts identified in Exhibit �2d-B� is requested for one or more of the
following reasons:� (1) additional time
is required to complete the current contractual work scope or additional
The following is a detailed summary
of each recommended contract award and extension.
Contract Awards in
Support of Business Units/Departments and Facilities:
Corporate Support � Facility
with C.W. Brown, Inc. (�CWB�), LLF
Construction Services, Inc.� (�LLF�),
Royal Diamond Construction Corporation (�Royal�) and Scully Construction LLC
(�Scully�) (Q13-5536; PO#s TBA) would provide for on-call general contracting
services� for the Authority�s Clarence D.
Rappleyea Building, garage and grounds in White Plains, NY.� Such services include, but are not limited
to, plumbing, electrical, carpentry and masonry services, as well as
build-outs, renovations and upgrades of Authority and tenant space, on an �as
needed� basis.� Bid documents were
developed by staff and were downloaded electronically from the Authority�s
Procurement website by 56 firms, including those that may have responded to a
Reporter.� Five proposals were
documents.� Of this number, one bidder�s
proposal quoted rates that were not in compliance with the New York State
Prevailing Wage Rate requirements and was not considered further.� Staff recommends the award of contracts to
the remaining four firms: CWB, LLF, Royal and Scully, which were responsive to
the bid requirements.� Three of these
firms have performed satisfactory services under existing contracts for such
work; the fourth would offer additional competitive resources to augment the
range of this pool of proposed awardees in order to fulfill the Authority�s
forthcoming general contracting requirements.�
The award of multiple contracts would also afford the Authority
sufficient resources and flexibility to meet the Authority�s projected schedule
of 2014 building management projects and the anticipated additional emergent
projects for subsequent years in a timely, responsive and responsible manner,
while keeping prices competitive.� The
new contracts would become effective on or about January 1, 2014, for an
requested for the aggregate total amount expected to be expended for the term
of the contracts, $6 million.� Total
commitments and expenditures for all four contracts will be tracked against the
approved aggregate total.� Such contracts
will be closely monitored for utilization levels, available approved funding
and combined total expenditures.� It
should be noted that CWB is a New York State-certified Woman-owned Business
Enterprise (�WBE�) and LLF is a New York State-certified Minority-owned
Business Enterprise (�MBE�).
The Authority uses contractors to
augment its technical staff to support various IT efforts and initiatives
related to the SAP enterprise-wide financial / business management (�Enterprise
Resource Planning�) system, as necessary.�
In an effort to prequalify firms to provide the services of temporary
programming personnel for specialized SAP-related tasks and projects to support
human resources, business warehousing, financial accounting, materials
management, sales and distribution, strategic enterprise management (for
Business Planning and Simulation) and other areas / modules, bid documents (Q13-5484) were developed by staff and
were downloaded electronically from the Authority�s Procurement website by 106
State Contract Reporter.� Twenty proposals were received and evaluated
to identify a �short list� of prequalified firms providing specialized SAP
temporary programming personnel.� The
evaluation process included, but was not limited to, the following criteria as
primary considerations: experience in providing qualified SAP
programming/contract personnel in the tri-state area, strong infrastructure of
bidders to provide technical support for their contract personnel, quality and
relevance of submitted r�sum�s and depth of contract personnel, as well as
reasonable and competitive rates.� Based
on a thorough review of the proposals, as further set forth in the Award
Recommendation documents, the following 10 firms were identified as the most
technically qualified bidders that met or exceeded the aforementioned
evaluation criteria and bid requirements, as a result of the prequalification
selection process:� BayForce Technology Solutions, Inc. (�BayForce�), Carlyle Consulting
Services, Inc. (�Carlyle�), Eclaro International, Inc. (�Eclaro�), Experis US,
Inc. (�Experis�), Grom Associates, Inc. (�Grom�), Mitchell Martin, Inc., Sage
Group Consulting, Inc. (�Sage�), Sapta Global, Inc. dba Zen4IT (�Sapta�),
Sierra Infosys, Inc., (�Sierra�), and Unique Comp, Inc. (�Unique�) (PO#s TBA).� Four of these firms have provided
satisfactory services under existing contracts for such work.� As specific positions are required, the
Authority will request r�sum�s of candidates based on the requirements and
experience required for each position from all 10 prequalified firms.� Contracts will only be awarded to those firms
that successfully place a candidate, as each required position is bid among the
entire prequalified group and the best candidate is selected.� Competition among the group is expected to
provide qualified talent from a wide variety of firms.� Contracts would become effective on or about
January 1, 2014, for an intended term of up to three years, subject to the
All contracts will expire on December 31, 2016, regardless of their
duration.� Approval is also requested for
the aggregate total amount expected to be expended for the term of the
contracts, $2.7 million.� Commitments will
be made through individual purchase order releases against master outline
agreements with the successful firms, as positions are required and
filled.� Total commitments and
expenditures for all such awarded contracts will also be tracked against the
and combined total expenditures, including travel and living expenses, where
applicable.� It should also be noted that
five of these firms are New York State-certified M/WBEs: Eclaro, Sage, Sapta,
Sierra and Unique. Operations
Power Generation / Support
the Authority has used external resources to provide for �on-call, as required�
civil and geotechnical engineering and design services to support the operation
and maintenance of the Authority�s hydroelectric, pumped storage and fossil
power generation projects, as well as its transmission and other ancillary
facilities throughout New York State, when engineering requirements are beyond
the resources of existing Authority engineering staff, or during emergencies
when special expertise is required or when Authority staff is not immediately
available to support operational needs.�
Furthermore, the Federal Energy Regulatory Commission (�FERC�) requires
that Licensees maintain the resources necessary to respond to unusual or
changed conditions that may affect public safety.� Projects may involve civil, geotechnical,
geophysical, dam safety instrumentation and monitoring, hydraulic and
structural design of new or existing facilities at power generation and
transmission projects.� Assignments may
include, but are not limited to: site investigations, soil/rock drilling and
laboratory testing, surveys, grading and drainage design, storm water
management, erosion and sedimentation control, as well as inspections,
feasibility studies, calculations, analyses, safety assessments and
construction support for modifications and additions to the Authority�s
Projects (including preparation of new design drawings and revisions to the
Authority�s drawings, dam safety procedures and equipment manuals affected by
each modification or addition to facilities).�
Since the need for such services is ongoing, and the existing contracts
are expiring, bid documents (Q13-5489) were
Procurement website by 118 firms, including those that may have responded to a
Reporter.� Twelve proposals were received
and evaluated in detail, as further set forth in the Award Recommendation
documents.� To summarize, all twelve
firms were determined to be technically qualified; staff also performed a cost
analysis, which resulted in a ranking of their respective evaluated costs.� Based on the foregoing, staff recommends the
award of contracts to the following five firms: CHA Consulting, Inc. (�CHA�), GEI Consultants, Inc. (a Delaware Corp.)
dba GEI Consultants, Inc., P.C. in New York (�GEI�), GZA GeoEnvironmental of
New York (�GZA�), Northeast Professional Engineering Consultants, LLC (�NPE�)
and Paul C. Rizzo Engineering � New York, PLLC (�Rizzo�) (PO#s TBA), which
are the lowest-priced evaluated bidders and are qualified to perform such
services.� It should be noted that two of
these firms have performed satisfactory services under existing contracts for
such work.� The award of multiple
contracts would provide a good mix of cost-competitive engineering firms,
covering a broad spectrum of technical expertise, experience and services.� The new contracts would become effective on
or about January 1, 2014, for an intended term of up to five years, subject to
the Trustees� approval, which is hereby requested.� Approval is also requested for the aggregate
total amount expected to be expended for the term of the contracts, $5
expenditures for all five contracts will be tracked against the approved
combined total expenditures, including travel and living expenses, where
with DCB Elevator Co., Inc. (�DCB�) (PO#
TBA) would provide for monthly maintenance services for approximately 27
elevators, escalators and wheelchair lifts located in various buildings at the
Niagara Project (including the Robert Moses Power Plant, the Lewiston Pump
Generating Plant, Power Vista, the General Maintenance Building and the
Administration/Warehouse Building), as well as for on-call repairs performed on
a time-and-material basis.� Since the
existing contract for these services expires at the end of the year, and the
need for such services is ongoing, staff conducted a mini-bid among six pre-approved
contractors for the geographic region, based on a New York State Office of
General Services (�OGS�) contract for such services.� Bid documents were sent to the six invited
bidders (RFQ N13-20081116GJ).� Three proposals were received and evaluated,
as further set forth in the Award Recommendation documents.� Staff recommends the award of a contract to
DCB, the lowest-priced bidder, which is qualified to perform such services,
meets the bid requirements and has provided satisfactory services under an
existing contract for such work.� All price
escalations or de-escalations will be governed by the OGS contract.� It should be noted that the Authority
reserves the right to solicit additional comparative costs for repairs, parts
and materials that are not defined or covered by the Maintenance Specifications
and that exceed a cumulative amount of $5,000 per occurrence.� The new contract would become effective on or
about January 1, 2014, for an intended term of up to four years, subject to the
for the term of the contract, $500,000, based on the bidder�s quote, as well as
historical and projected usage.� It
should also be noted that DCB is a New York State-certified WBE.
with General Electric International,
Inc. (�GEII�) (6000143507; PO# TBA) would provide for technical assistance
services, on an �as needed� basis, to support the Authority�s 500 MW Power
Project.� Although GEII was the only
bidder to submit a proposal for the existing contract, Authority staff
attempted to identify other additional firms that would be able to perform such
services.� To that end, bid documents
Procurement website by 36 firms, including those that may have responded to a
received and evaluated in detail, as further set forth in the Award
Recommendation documents.� As the
original equipment manufacturer, GEII is uniquely qualified to perform such
work.� GEII possesses all of the
proprietary information pertaining to various systems and equipment (including,
but not limited to, the Frame 7 Compressor and D-11 Steam Turbines, as well as
the GE Bently Nevada instrumentation).�
Based on the foregoing, as well as its level of expertise and resources,
staff recommends award of a contract to GEII, the more technically qualified
bidder, which fully meets or exceeds all the bid requirements and has provided
satisfactory services under an existing contract for such work.� Additionally, a crucial component of the work
scope is the ability to submit technical questions for engineering review to
the Power Answer Center (�PAC�) and execute the recommendations of such PAC
cases, which are proprietary to GE.� The
availability of this resource will be especially useful in resolving emergent
issues during the next major five-year outage scheduled during the term of the
new contract.� Rates for the field
engineer and specialty rates will be based on GE�s published rates in effect at
the time of service.� The new contract
would become effective on or about January 1, 2014, for an intended term of up
to five years, subject to the Trustees� approval, which is hereby requested.� Approval is also requested for the total
amount expected to be expended for the term of the contract, $1.5 million.
The contract with Underground Systems, Inc. dba USi
(Q13-5513; PO# TBA) would provide for monitoring and maintenance services
for the Long Island Sound Y-49 345kV Feeder cable oil leak detection and uprate
systems, as well as leak detection services for the Q-35 L&M cable (to
commence one year after system installation, approximately June 2015).� Services would include, but are not limited
to, continuous monitoring of the leak detection system on a 24/7/365 basis, as
well as maintenance and repair of the installed systems, including annual
calibration and leak testing, field maintenance and technical support, as
needed, and an answering service that would notify the appropriate parties of
calls regarding system alarms and operating issues in the event of a suspected
or actual dielectric fluid leak.�
Although the existing contract for such services was awarded on a sole
source basis, staff attempted to identify any other firm/s that would be able
to perform this work.� To that end, bid
Authority�s Procurement website by 51 firms, including those that may have responded
Reporter.� One proposal was received
and evaluated.� Reasons provided by some
of the other firms that did not submit a proposal include, but are not limited
to, it was not their scope of work or they downloaded the bid documents for
information purposes only.� As the
original system designer of the existing proprietary software and hardware
configuration, USi is uniquely qualified to monitor and maintain these systems,
provide replacement parts and on-site support services for these systems, in
order to ensure the reliability of the Y-49 and Q-35 L&M cables and to
fulfill the Authority�s regulatory licensing commitments.� Based on the foregoing, as well as its reasonable
pricing, staff recommends the award of a contract to USi, which is technically
qualified to perform these services and has provided excellent service under
the existing contract for such work.� The
new contract would become effective on or about January 1, 2014, for an
contract, $1,582,900.
The contracts with Michels Power (A Division of Michels
Corporation) and Northline Utilities, LLC (�Northline�) (RFQ C13-20078249WS;
PO#s TBA) would provide for transmission emergency response services for
the Authority�s Transmission Facilities, as needed, when impacted by natural,
environmental or other disasters.�
Historically, the Authority�s Transmission Maintenance Organization
(�TMO�) has provided first response and evaluation services, primarily for
weather-related events / emergencies that include structural failures to the
line system and superstructures or infrastructure failures caused by rain, ice,
wind and/or snow.� Other emergency
responses may be for events caused by public intervention, purported acts of
vandalism, contractor error or aging/deteriorating infrastructure.� The Authority has responded to incidental
localized emergencies in New York State involving the Transmission System and
larger regional events, such as Hurricane Sandy in 2012, Hurricane Irene in
2011 and the wind-related events of Hurricane Earl in 2010 to assist LIPA, the
Buffalo Snowstorm of 2006, and the St. Lawrence County Ice Storm in 1998.� Responses in each circumstance were managed
based on the breadth, scope and available resources for the event.� The Authority�s Transmission Emergency
Restoration Plan (�TERP�) outlines the strategy for the safe, efficient and
orderly restoration of transmission lines after a facility failure.� The purpose of the proposed emergency
response contracts would be to provide for additional resources and backup
services, if necessary, for large scale events, those causing catastrophic
failure of the transmission system and those outside the scope of the TMO.� To that end, bid documents were developed by
website by 46 firms, including those that may have responded to a notice in the
New York State Contract Reporter.� Three
proposals were received and evaluated by a multidisciplinary Evaluation
Committee, as further set forth in the Award Recommendation documents.� Based on contractor qualifications, specified
proposal requirements (e.g., construction and emergency response capabilities,
available equipment, past emergency response activities, number and
qualifications of response personnel, training procedures, etc.), environmental,
health and safety requirements and available labor force / resources, staff
recommends the award of contracts to two firms: Michels Power and Northline,
the most technically acceptable bidders, which are qualified to perform such
work and meet the bid requirements.� Both
firms have provided satisfactory services under prior contracts for similar
work.� The award of contracts to these
two firms would put the Authority in the best position to respond to a large
scale catastrophic event on its Transmission System, if necessary.� The new contracts would become effective on
expenditures for both contracts will be tracked against the approved aggregate
total.� Such contracts will be closely
monitored for utilization levels, available approved funding and combined total
and/or Additional Funding:
At their meeting of May 26, 2010,
the Trustees approved the award of multiyear contracts for legal services in
the categories of Bond, Underwriter and Disclosure Counsel in the aggregate
amount of $3 million, Energy Services Counsel in the aggregate amount of $4
million and General Legal Services in the aggregate amount of $6 million.� Contracts for the General Legal Services and
Energy Services categories were entered into with the designated law firms for
an initial term of three years, with an option for two additional years.� Contracts for the Bond, Underwriter and
Disclosure Counsel category were entered into with the designated law firms for
an initial term of two years, with an option for three additional years.� In the three and one-half years since these
approvals, there developed the need to add more work in the area of Energy
Services.� By way of examples, the New
York City Customer issues (Buyers� Side Mitigation) and 100 MW Solar project
required outside counsel assistance, with the result that it is anticipated
that the funding for the Energy Services category will be expended in
2014.� At this time, there appears to be
sufficient funding for the Bond, Underwriter and Disclosure Counsel and General
Legal Services categories for the expected work through the end of those
contracts.� Accordingly, staff proposes
to consolidate funding for the three separate categories into a single
authorized allocation in the Law Department budget for outside counsel, with
the result that remaining funds in the three categories can be shifted between
and among the categories, as long as they are consistent with the
previously-approved aggregate total funding for the three categories.� The Trustees� approval is therefore requested
to authorize such proposed consolidation of aggregate funding for the contracts
set forth in Exhibit �2d-B,� to be allocated as necessary.� It should be noted that the Gonzalez Saggio
firm is a New York State-certified MBE and the Schoeman Updike firm is a New
York State-certified WBE.
with Joseph M. Bress (4500213229)
provides for consulting services to assist the Authority in connection with
labor negotiations, on an �as needed� basis.�
Such services include, but are not limited to: developing a labor
strategy with Authority management prior to and during negotiations of labor
contracts with the various unions; representing the Authority in all phases of
negotiations of collective bargaining agreements with its various unions,
including impasse proceedings and other related proceedings before the Public
Employment Relations Board (�PERB�); briefing Authority management and the
Trustees on the status of labor negotiations and presenting the terms of the
proposed Agreement to the Trustees and collaborating and participating in the
Authority�s negotiation team.� The
subject contract, which was awarded on a single-source basis, became effective
on January 30, 2012 for an initial term of less than one year.� Subsequently, staff recommended a one-year
extension of the subject contract, which was approved by the Trustees at their
meeting of December 18, 2012.� Mr. Bress
has been working with the Authority�s negotiating team on its expired contracts
with the International Brotherhood of Electrical Workers (�IBEW�) and the
Utility Workers Union of America (�UWUA�), including changes to wages, benefits
and work rules.� Contract negotiations
with both labor unions are still ongoing.�
Mr. Bress�s services are also needed to negotiate a contract with a
newly-created collective bargaining unit at the Authority�s Charles Poletti
power generating site.� Mr. Bress is
uniquely qualified to perform such services.�
As a retired New York State employee, who was also retained by the
Governor�s Office to negotiate the CSEA contract, Mr. Bress offers specialized
expertise at very competitive rates.� He
has provided valuable service to the Authority under the existing
contract.� Since the process is still
ongoing, it would not be prudent to bid this work midstream and there is no
guarantee that it would result in the identification of another individual as
qualified or as competitively priced as Mr. Bress.� The current contract amount is $450,000;
total expenditures for 2012 � 2013 are well below the authorized contract limit
and staff anticipates that sufficient funding will be available for the
proposed extended term, including the optional year.� Since the need for such services is ongoing,
the consultant has performed satisfactory work and adequate funding is still
available under this contract, staff recommends a one-year extension of the
subject contract through December 31, 2014, with an option to extend for an
additional year, if necessary.� The
Trustees are therefore requested to approve an extension of the subject contract
through December 31, 2014 (with an option to extend for an additional year
through December 31, 2015, if needed), with no additional funding requested.
with Quality Integrated Services, Inc.
(�QIS�) (4500223661) provides for testing and inspection services of
various materials including, but not limited to, concrete samples, metals,
surface coatings (paint), welds and soil for the Niagara Power Project, on an
�as needed� basis.� The independent testing
laboratory performs such verification testing or inspection services related to
work being performed at the Project, to ensure that a material conforms to all
requisite standards and requirements.�
October 31, 2012, for a term of less than one year.� Interim approval for a five-month extension
through March 31, 2014, was authorized in accordance with the Authority�s
Guidelines for Procurement Contracts and Expenditure Authorization Procedures,
to provide for the continuation of such services on current projects, while
allowing sufficient time for the re-bidding, evaluation and approval process
for a new multiyear award.� The current
contract amount is $237,750; adequate funding is available under this contract
to cover services provided during the proposed extended term.� The Trustees are therefore requested to
ratify the interim extension and to formally approve extension of the subject
contract through March 31, 2014, with no additional funding requested.
Vice President � Enterprise Shared Services, the Senior Vice President �
Operations Support Services and Chief Engineer, the Senior Vice President �
Power� Generation,� the Acting Vice President � Project
Management, the Vice President � Engineering, the Vice President � Environment,
Health and Safety, the Acting Vice President � Procurement, the Vice President
� Information Technology and Chief Information Officer, the Vice President �
Transmission, the Director � Corporate Support Services, the Director � Asset
and Maintenance Management, the Director � Labor & Special Projects, the
Regional Manager � Northern New York, the Regional Manager � Western New York,
the Regional Manager � Central New York and the Regional Manager � Southeastern
New York recommend that the Trustees approve the award of multiyear procurement
(services) contracts to the companies listed in Exhibit �2d-A� and the
Exhibit �2d-B,� for the purposes and in the amounts discussed within the item
Chair Mahoney being recused from the vote as it pertains to CHA Consulting, Inc.
and Orrick Herrington & Sutcliffe LLP; and Trustee LeChase as it pertains
to CHA Consulting, Inc. and Nixon Peabody LLP.�
�2d-A,� attached hereto, are hereby approved for the period of time indicated,
Exhibit �2d-B,� attached hereto, are hereby approved and extended for the
e. Plattsburgh to Vermont Transmission Facility
(PV-20) � Acquisition of Property � Map No.
CL-1506, Parcel No. 1506��������������� The President and Chief Executive
over and across Cumberland Head Road in the Town of Plattsburgh, County of
Clinton, as more particularly shown on the attached Exhibit �2e-A.� BACKGROUND
The Plattsburgh to Vermont
Transmission Facility (�PV-20�) is
an approximately 9-mile long 115 kV circuit that connects the Plattsburgh
Substation in Beekmantown, New York, to the Vermont Electric Company substation
in Milton, Vermont.� A single 115 kV
circuit extends from the Plattsburgh Substation to the Cumberland Head
Transition Station, where it transitions to submarine cables and enters Lake
Champlain. �The existing
submarine/subterranean cables consist of four 115 kV cables that were installed
in 1958 and three 115 kV cables that were installed in 1971.� The 1958 cables have exceeded their
projected 50-year useful life and the 1971 cables are approaching the end of
their useful life.� The Authority has
proposed replacing 4,800 feet of submarine/subterranean 115 kV design capacity
cables in New York State with 230 kV design capacity cables.
��������������� The PV-20 line
runs overland from the Plattsburgh substation for approximately 7.5 miles prior
to entering Lake Champlain.� At the time
of initial installation, the Authority secured easement rights over and across
all lands necessary to connect to the submerged portion of the Project except
for rights to a parcel, approximately 30 x 50 feet, at the point where the 1971
alignment crosses Cumberland Head Road, a public roadway purportedly owned and
maintained by the County of Clinton.� The
Authority is the fee owner of the adjoining lands on both sides of Cumberland
Head Road.� This acquisition will perfect
the Authority�s easement rights over and across Cumberland Head Road and
extinguish any potential third-party rights which might impede the Authority�s
use.� It is expected that the property
will be appropriated under Section 402 (A)(4) of the New York State Eminent
Domain Procedure Law, which� authorizes
the immediate acquisition of lands in the bed or beds of any streams, lakes,
streets, roads, highways, or rights-of-way by the filing of a map and
description of the parcel and sets forth a streamlined procedure for the
vesting of title. FISCAL INFORMATION
It is not anticipated that there
will be any financial consequences of this transaction. �Any costs or consideration incurred will be
paid from the Real Estate O&M budget.
Enterprise Shared Services, the Vice President � Transmission, the Acting Vice
President � Project Management and the Director � Site Purchasing/Real Estate
recommend that the Trustees approve the acquisition of permanent easement
rights in and to the property shown and described on the map entitled �Power
Authority of the State of New York, St. Lawrence River Project,
Barnhart-Plattsburgh Transmission Line, County of Clinton, Town of Plattsburgh,
Map No. CL-1506, Parcel No.1506.�
That pursuant to the provisions of Article 5, Title 1 of the Public Authorities
Law, the Authority hereby finds it necessary to acquire by purchase or eminent
domain the real properties shown and described on a map entitled �Power
Map No. CL-1506, Parcel No.1506,� and hereby finds and determines that such
real property is required for public use and hereby determines that such real
property is reasonably necessary for the Plattsburgh to Vermont Transmission
Facility (�PV-20�) line, and be it further
That in the opinion of the Authority the acquisition of the real property shown
and described on said Map No. CL-1506 is de
That the Executive Vice President � Enterprise Shared Services and
Administration be, and hereby is, authorized and directed to execute on behalf
of the Authority such certificates, requests, and directions on terms and
conditions substantially in accord with the foregoing report of the President
and Chief Executive Officer, as are necessary or desirable for the acquisition
of such real property; and be it further
f. St. Lawrence River Power Project � Conveyance of Surplus
Lands to the County of Franklin � Map No.
CL-909, Parcel No. 951 and Map No.
CL-910, Parcel No. 952������������������������������ The President and Chief Executive
authorize the conveyance of two adjoining parcels of surplus land improved by a
communications tower, totaling approximately 3.91 acres, located in the Town of
Ellenburg, Clinton County, to the County of Franklin.
The Ellenburg properties were acquired in 1958.� A 200-foot communications tower (the �tower�)
was erected in 1975 in support of the Barnhart-Plattsburgh Transmission Line. �Recently, the Transmission Department
determined that the tower was unsafe to climb and that major repairs and
upgrades would be required to keep it operational. �Concurrently, staff determined that the
equipment installed in Ellenburg could be moved to the Authority�s new
communication tower at the Ryan Substation.�
Staff therefore concluded that it was no longer economically feasible to
incur the ongoing maintenance and repair costs associated with the tower and that
the property was surplus to the Authority�s needs. �In consideration of these factors, the tower
was scheduled for demolition.
The scheduled demolition was put on hold when Franklin County
expressed interest in acquiring the property for use in support of its 911
emergency system (Franklin County Letter of intent attached as Exhibit
�2f-A�).� The New York State Police also
expressed interest in installing equipment on the tower and the Authority has
been advised that these two entities intend to coordinate use of the site.� The Adirondack region lacks adequate
communications infrastructure, and the Authority�s transfer of the Ellenburg
property will provide significant benefit to the population of the North
Country.� At present, Franklin
County maintains 911equipment on the microwave tower located inside the fenced
area of the Authority�s Willis substation.�
Relocation of this equipment to the Ellenburg site will eliminate this
third-party use of the Authority�s property.
value of the property is $60,000.00; however, in support of this significant
public benefit, it is recommended that the property be transferred for
consideration of $1.00, the payment of which shall be waived. Title 5-A of
Article 9 of the Public Authorities Law (the �Act�) and the Authority�s
Guidelines for the Disposal of Real Property (the �Guidelines�) allow the
Authority, with the approval of the Trustees, to dispose of Authority real
property by negotiation and for less than fair market value when the transferee
is a government or other public entity, and the terms and conditions of the transfer
require that the ownership and use of the asset will remain with the government
or any other public entity.
inspected the property and has been made aware that the tower requires repair
and upgrading prior to its continued use. �The transfer is to be conditioned upon the
execution of an agreement between the Authority and the County of Franklin, to
include language stating that the County takes the property �as is,� that it
indemnifies and holds the Authority harmless from any claims arising from its
acquisition and use of the property and that use of the asset will remain with
the government or other public entity.
��������������� FISCAL INFORMATION
the Authority will transfer title to approximately 3.91 acres of real property
located in the Town of Ellenburg to the County of Franklin without payment to
��������������� The Senior Vice President �
recommend that the Trustees approve the transfer of title to properties shown
and described on the maps entitled Map No. CL-909, Parcel No. 951 and Map No.
CL-910, Parcel No. 952 to the County of Franklin.
and determines that title to the real properties shown and described on the
maps entitled �Power Authority of the State of New York, St. Lawrence River
Power Project Map No. CL-909, Parcel No. 951� and �Power Authority of the State
of New York, St. Lawrence River Power Project, Map No. CL-910, Parcel No. 952�
may be transferred to the County of Franklin; and be it further
RESOLVED, That the Executive Vice President
� Enterprise Support Services and Administration or designee, be, and hereby
is, authorized and directed to execute on behalf of the Authority such deeds
and supporting documents as are necessary or desirable for the transfer of such
RESOLVED, That the Chairman, the Vice Chair the
President and Chief Executive Officer, the Chief Operating Officer and all
g. Proposed Schedule of Trustees� Meetings in 2014
The following schedule of meetings
for the year 2014 is recommended:
��������������� Date���������������������������������������������������������������������� Location���������������������������������������������� Time
��������������� January 28, 2014����������������������������������������������� WPO������������������������������������������������������ 11:00
��������������� February 25, 2014���������������������������������������������� WPO������������������������������������������������������ 11:00
��������������� March 25, 2014
� Annual�������������������������������� WPO������������������������������������������������������ 11:00
��������������� April�������������������������������������������������� NO
MEETING SCHEDULED���������������������������� ��������������� May 20, 2014����������������������������������������������������� WPO������������������������������������������������������ 11:00
��������������� June �������������������������������������������������� NO
��������������� July 29, 2014������������������������������������������������������� WPO������������������������������������������������������ 11:00
��������������� August���������������������������������������������� NO MEETING SCHEDULED
��������������� September 30, 2014������������������������������������������� NIA������������������������������������������������������� 11:00
��������������� October��������������������������������������������� NO MEETING SCHEDULED
��������������� November���������������������������������������� NO MEETING SCHEDULED
��������������� December 16, 2014�������������������������������������������� WPO������������������������������������������������������ 11:00
Executive Officer and the Corporate Secretary support the proposed schedule for
the Authority�s Trustees� Meetings for the year 2014, as set forth in the
foregoing report. I recommend the approval of the
proposed schedule by adoption of the resolution below.�
RESOLVED, That the schedule of Trustees� Meetings for
the year 2014, as set forth in the foregoing report of the Corporate Secretary,
be, and hereby is, approved. h. Transfer
of Western New York Hydropower Allocations to Delphi Automotive PLC and Proposed
Contract � Notice of Public Hearing
��������������� The Trustees are requested to:
(1) approve the transfer of two Western
New York hydropower allocations, 500 kilowatts (�kW�) of
Expansion Power (�EP�) and 1,000 kW of Replacement Power (�RP�), from GM
Component Holdings LLC (�GMCH�) to Delphi Automotive PLC (�Delphi�); (2)
establish the term of each such allocation to be five years starting from the
date of commencement of electric service of any portion of the allocation in
exchange for, among other things, Delphi�s commitment to maintain an employment
level of 250 jobs and make a capital investment of $1.78 million at the Delphi
facility, described herein, for the five-year term of the allocations; and (3)
the proposed contract finally negotiated with Delphi, the current form of which
is attached as Exhibit �2h-A,� and transmit copies of such proposed form of
contract to the Governor and legislative leaders pursuant to Public Authorities
Law (�PAL�) �1009.
GMCH, a subsidiary of General Motors LLC (�GM�), operates
a manufacturing facility in Lockport, Niagara County, which is a center of GM�s
system component manufacturing with nearly 2.8 million square feet of
manufacturing and office space across multiple buildings (the �Lockport
Facility�).� GMCH acquired the Lockport
Facility in October 2009 in connection with Delphi�s emergence from bankruptcy.
�As part of the acquisition, GMCH agreed
to lease �Building 6� of the Lockport Facility, known as the Lockport Technical
Center (�LTC�), to Delphi and give Delphi an option to purchase the LTC.� GMCH manufactures radiators, condensers, evaporators, HVAC
modules and other automobile components at the Lockport Facility, while Delphi
operated the LTC, a 270,000 square-foot facility, where 250 Delphi engineers
provide laboratory and testing services of various automobile components and
In December 2009, to support the continued operations of
the Lockport Facility, the Trustees approved the transfer of four allocations
of Authority hydropower from Delphi to GMCH.�
These allocations included (i) two large in-service EP allocations,
14,300 kW and 10,000 kW (the �In-Service Allocations�), and (ii) two smaller
allocations, 500 kW of EP and 1,000 kW of RP that had not yet been placed in
service (the �Pending Allocations�). In 2010, the Trustees approved the extension of GMCH�s
In-Service Allocations (24,300 kW) during the Authority�s Western New York
(�WNY�) long-term contract extension initiative, in return for GMCH�s agreement
to maintain 950 employees and invest $5.165 million annually in the Lockport
Facility for the seven years of the extended term (through June 30, 2020).� In connection with the consideration of the LTC purchase
option, GMCH and Delphi determined that utility services used by each company
at the Lockport Facility (e.g., water, sewer, gas and electricity) needed to be
divided in order to make the two companies� co-existence on the campus
economically viable.� In order for Delphi
to commit to the investment needed to purchase the LTC and make the necessary
utility improvements, Delphi needed incentives to mitigate the costs of the
improvements.� Empire State Development
Corporation (�ESD�), New York State Electric & Gas (�NYSEG�) and Niagara
County each supported the project to help secure Delphi�s continued WNY
GMCH and Delphi ultimately reached agreement on the terms
of the LTC purchase, and the process to separate utility services and perform
the necessary infrastructure changes began in 2011.� Delphi completed the utility separation of
the LTC facility from the larger GMCH campus in November 2013, and the LTC
purchase is expected to be final in early in 2014.� Delphi has spent over $7.5 million in capital
expenditures in the last three years to complete the utility separation
project, including a new substation and stand-alone electric service to the
building.� DISCUSSION
A lingering option for Delphi to reduce costs is to move
its WNY operations � its operations at the LTC and its operations at the
Rochester Technical Center which provides environmental, emissions, and other
testing services and employs over 200 engineers � to Troy, Michigan where it is
headquartered.� In an effort to support Delphi�s continued presence at the
LTC, GMCH and Delphi have requested that the Pending Allocations be transferred
from GMCH back to Delphi, their original recipient.� Delphi will commit to retain 250 jobs and
spend at least $1.78 million dollars in capital improvements at the LTC
facility over five years, with a majority of that spending being front-loaded
($1.5 million in 2014).� GMCH will
continue to meet its commitment levels of 950 jobs and more than $5 million in
spending yearly. While the transfer of the Pending Allocations will not
create new jobs, its purpose is to secure the retention of the existing 250
jobs and $1.78 million in capital investments for the term of the Pending
Allocations.� With the continued presence
of both GMCH and Delphi, the Lockport Facility would continue to be one of the
largest and highest paying employment sources in Niagara County.�� Delphi�s commitments would be
secured through a hydropower contract with the Authority.� The Authority is in the process of discussing
the proposed contract with Delphi and anticipates receiving consent to a
contract form substantially similar to Exhibit �2h-A.� ��������������� As required by PAL �1009, when
the Authority believes it has reached agreement with its co-party, it transmits
the proposed form of contract to the Governor and other elected officials for
their information, and holds a public hearing on the proposed contract.� At least 30-days� notice of the hearing must
be given by publication in each of six selected newspapers once per week during
such period.� Following the public
hearing, the form of contract may be modified, if advisable.� Upon approval of the final proposed contract
��������������� The general form of the proposed
Delphi contract is consistent with recently approved contracts for the sale of
EP and RP.� Some pertinent provisions of
the proposed form of the contract include:
� The provision for
direct billing of all production charges (i.e. demand and energy) as well as
all New York Independent System Operator, Inc. (�NYISO�) charges, plus taxes or
any other required assessments, all as set forth in the Authority�s Service
Tariff No. WNY-1. �
� Commercially
reasonable provisions relating to financial security to reflect a direct
billing arrangement between the Authority and its EP/RP customers. � Provisions
authorizing data transfers and addressing other utility-driven requirements
which are necessary for efficient program implementation.
� Enforceable
employment and usage commitments.� � Annual job
reporting requirements and a job compliance threshold of 90%.� Should Delphi�s actual jobs reported fall
below the compliance threshold, the Authority has the right to reduce the
allocation on a pro-rata basis.� � The allocations
would be sold to Delphi pursuant to the Authority�s Service Tariff No. WNY-1,
which applies to all allocations of EP and RP commencing July 1, 2013.
� Transmission and
delivery service would be provided by NYSEG in accordance with its Public
Service Commission-approved delivery service tariff.
��������������� The Manager � Business Power
Allocations and Compliance recommends that the Trustees: (1) approve the
transfer of the Pending Allocations, 500 kW of Expansion Power and 1,000 kW of
Replacement Power, from GM Component Holdings LLC (�GMCH�) to Delphi Automotive
PLC (�Delphi�); (2) establish the term of each Pending Allocation to be five
years starting from the date of commencement of electric service of any portion
of the Pending Allocation, in exchange for, among other things, Delphi�s
commitment to maintain an employment level of 250 jobs and make a capital
investment of $1.78 million at the Lockport Technical Center (�LTC�),� for the five-year term of the Pending
Allocations; and (3) authorize the Corporate Secretary to convene a public
hearing on the form of the proposed contract finally negotiated with Delphi,
the current form of which is attached as Exhibit �2h-A,� and transmit copies of
such proposed form of the contract to the Governor and legislative leaders
pursuant to PAL �1009. ��������������� Staff will report to the Board
of Trustees on the public hearing and the contract and at that time make
additional recommendations regarding the proposed contract.
��������������� RESOLVED, That the transfer of allocations of Authority hydropower totaling 1,500 kilowatts (�kW�), comprised
of 500 kW of Expansion Power and 1,000 kW of Replacement
Power (the �Pending Allocations�), from GM Components Holdings LLC to Delphi Automotive PLC (�Delphi�) be, and hereby is, approved subject to agreement on a direct sale contract between the Authority and Delphi which
provides for Delphi�s employment and capital investment commitments
as well as other terms and conditions which
the Authority deems appropriate (the �Contract�); and be it further
that the term of each of each Pending Allocation shall be five years starting
from the date of commencement of electric service for any portion of the Pending
Allocation; and be it further
������������������������������� ��������������� RESOLVED,
That the Trustees hereby authorize a public hearing on the terms of the
proposed form of the Contract for the sale of the Pending Allocations; and be
of the proposed Contract to the Governor, the Speaker of the Assembly, the
Senate and the Chairman of the Senate Finance Committee pursuant to Public
Authorities Law (�PAL�) �1009; and be it further
State, in accordance with PAL �1009; and be it further ��������������� ��������������� RESOLVED,
each of them hereby is, authorized on behalf of the Authority to do any and all things, take any and all actions
i. Direct Sale Contract for the Sale of Western New York
Hydropower to M&T Bank � Transmittal
to the Governor����������������������������� The President and Chief Executive
Trustees are requested to: (1) approve the proposed final contract for the sale
of Expansion Power (�EP�) to M&T Bank (�M&T�); and (2) authorize
transmittal of the proposed final contract to the Governor for his approval and
authorization for the Authority to execute the contract pursuant to Public Authorities
Law (�PAL�) �1009.� The proposed final
contract is attached as Exhibit �2i-A.�
of Replacement Power (�RP�) to businesses located within 30 miles of the
Niagara Power Project, provided that the amount of EP allocated to businesses
in Chautauqua County on January 1, 1987 shall continue to be allocated in such
At their July
26, 2011 meeting, the Trustees awarded an allocation of 3,000 kW of EP to
M&T in return for the creation of 124 jobs and capital expansion commitment
of $51.625 million.� The contract would
enable the Authority to sell the allocation to M&T under a direct sale
arrangement for the approved five-year term of the allocation.� Transmission and delivery service would be
Commission-filed delivery service tariffs.�
following is a summary of some pertinent provisions of the contract:
WNY-1 (�ST WNY-1�).� � The contract
includes M&T�s agreed-upon commitments with respect to employment, power
utilization and capital investment.� The
Authority would retain the right to reduce or terminate customer�s allocation
if employment, power utilization, or capital investment commitments are not
met.� � The contract
includes the ability to award additional allocations of EP or RP to the
customer for further expansion at the same facility, which would be
incorporated into Schedule A of the contract.�
Authority, the contract includes commercially reasonable provisions concerning,
among other things, the ability to require deposits in the event of the
The Authority has discussed the
proposed contract with M&T and has received the customer�s consent to it.
The customer acknowledges that ST WNY-1 rates will apply to its allocation consistent
with all allocations of EP and RP as of July 1, 2013.
and other elected officials.� Upon approval
by the Governor, the Authority may execute the contract.
At their July 23, 2013 meeting, the
Trustees authorized the Corporate Secretary to transmit the proposed contract
for M&T to the Governor and legislative leaders and schedule a public
hearing on the contract.� A public
hearing was held on October 3, 2013 at the Niagara Power Project�s Power Vista
Visitors� Center in Lewiston, New York.�
There were no oral statements made at the public hearing and no written
statements were submitted.� The official
transcript of the public hearing is attached as Exhibit �2i-B.�
contract for the sale of Replacement Power to M&T Bank, as detailed in
Exhibit �2i-A,� and authorize the transmittal of the contract to the Governor
for approval.� For the reasons stated, I recommend
Officer, was adopted with Trustee Mahoney recused from the vote.
RESOLVED, That the contract for the sale of
Expansion Power (�EP�) to M&T Bank is in the public interest and in
accordance with Public Authorities Law �1009 should be submitted to the
Governor for his approval and that copies of the contract, along with the
record of the public hearing thereon, be forwarded to the Speaker of the
RESOLVED, That the Chairman and the Corporate
Secretary be authorized and directed to execute such contract in the name of
and on behalf of the Authority if the contract is approved by the Governor; and
Senior Vice President � Economic Development and Energy Efficiency, or his
designee, be, and hereby is, authorized, subject to the approval of the form
thereof by the Executive Vice President and General Counsel, to negotiate and
execute any and all documents necessary or desirable to implement the contract with
M&T Bank as set forth in the foregoing report of the President and Chief
Quiniones stated that the reports by the Executive Management will cover the
months of October and November and at the January meeting they will present a
2013 year-end report on the operations of the Authority.� He continued that based on the Performance
Scorecard, the Authority performed very well during the months of October and
November.� He said other than the effects
of the forced outage earlier in the year due to the failure of the Y-49
transmission line that connects Westchester County and Long Island, he
anticipates that the year-end report will indicate a very successful year of
operations for the Authority during 2013. b. Report of the Chief Operating Officer
��������������� ��������������� Mr. Edward Welz provided
highlights of the report to the Trustees.�
��������������� Transmission
� Two outages on the MA-2 transmission line in
order to repair a broken cross arm;
� Repairs were made to a pothead on the GL-3
� Repairs on the Y-49 Transmission line were
� Environmental incidents for the year were
below target of 32 incidents;
� The DART rate for the year, the measure of
the Authority�s safety performance, was .72%; the annual target is .78%.
� The LEM program at STL has been completed;
� Successful completion of table top
functional exercise with FERC and the first responders at STL for the
Authority�s emergency action plan.
� First phase of the Marcy Substation
autotransformer bank and reactor refurbishment completed;
� Replaced four motor operated disconnects at
the Marcy Substation;
� Working on the Alcoa new substation and new
� �Work
on the LPGP LEM program at Niagara continues;
� �Working with GE to plan and schedule an outage
to repair the generator step-up transformer at the 500 MW plant;
on the replacement of the generator step-up transformers at the St. Lawrence
facility to begin in 2014;
� Started transmission line substation design
work for the Authority�s T-LEM program. Compliance � The new Bulk Electric System definition will
be effective in 2014.� This will put some
pressure on the Authority with new equipment and new transmission lines
upcoming compliance review by NERC and FERC.
Personnel � Plans to restructure several departments
within Operations in order to facilitate a more efficient operation underway;
� Labor negotiations with IBEW and UWUA unions
to a question from Trustee LeChase, Mr. Welz said that both unions will
continue with the salaries and benefits they had before the contracts expire.
c. Report of
Donald Russak provided highlights of the financial report to the Trustees.� He said the state of the Authority�s
financial position remains strong.� The
Authority continues to improve on its projections and therefore expects to meet
all its metrics and targets for the year.�
Net Inome
� Net Income is expected to remain above
budget ending the year at a level exceeding $200 million;
of Performance � As has been reported over the past few months,
higher than forecast hydro generation and capacity prices largely contributed
to this positive performance. � At these projected levels, the business
requirements for cash flow and liquidity will be met for the year.
� The $550 million Revolving Credit Agreement
supporting NYPA�s Commercial Paper Program was successfully renegotiated for an
additional year pursuant to its terms and prior Trustee authorization; - Significant
Savings � Commitment Fees will be reduced from 65 basis points to 35 bps per
annum for an annual savings of approximately $1.7 million � As part of this process, each of the three
Ratings Agencies reaffirmed NYPA�s solid credit ratings.
d. Chief Risk Officer�s Report
William Nadeau provided highlights of the report to the Trustees.
Enterprise Risk Report � Lessons Learned
Enterprise Risk Report issued in September outlined nine enterprise risks which
staff is now working on to begin development of mitigation plans.� Also, in looking at the lessons learned from
the process, the Enterprise Risk team reviewed: how the team did in
communicating the process, and NYPA�s overall understanding of the risk
management philosophy in place.� Also,
the Enterprise Risk team plans to conduct 19 sessions with various stakeholders
throughout the Authority next month to aggregate and come up with lessons
learned from the just completed NYPA- wide Risk Assessment process so that as
the team goes forward with future assessment,�
there will be the strongest opportunity for successful implementation.
�The Enterprise Risk staff discussed the Report
with Mr. Robert Lurie of Strategic Planning.�
The discussions included areas which have been integrated into some of
the initiatives that are currently in place, such as asset management and
workforce planning, and which can be used to help develop business plans.
Risk Response and Key Rsk Indicator -
Risk Department has retained the firm of Deloitte and Touche to assist in
the� development of� mitigation plans� from the two pilot risks identified by the
Executive Risk Management Committee (increasingly difficult to attract� and retain employees; and significant
increase in nonrecurring O&M based upon some of the past policies and an
aging infrastructure) the form of which will be presented to the Executive Risk
Management Committee, the Executive Management Committee and thereafter, the
Audit Committee in March.� Integration
Enterprise Risk Management team had several meetings with Mr. Lesly Pardo and
the Internal Audit staff pertaining to the development of the 2014 Audit
Plan.� The discussions included the
risks, at the enterprise level, that Internal Audit needs to be aware of in
developing the Audit Plan; examining the risks associated with the audits and
strengthening the processes associated with those risks within the Authority.
e. Report of the Senior Vice President
Robert Lurie provided highlights of the report to the Trustees.� He outlined the 2014 action plan for those
initiatives related to the three major areas in NYPA Strategic Plan: 1)
workforce planning � knowledge management and process efficiency;� 2) Infrastructure Modernization �� Smart grid and Asset management; 3) Customer
Value - Customer services.� � Teams have been set up to work on business
cases for each of the initiatives including the scope, costs and benefits, and
� An external plan describing the initiatives
and how they will benefit the stakeholders is being drafted. The draft plan
will be presented to the Board in January 2014.
� Staff will also develop business plans
showing how the initiatives will be achieved.�
This will include communications; internal rollout across the
organization; teams and organizational structure that will be necessary for
each strategy; development of a detailed business plan for each strategy; and
� Governance structure and process to ensure
proper accountability as each initiative is being developed.
� �Outreach to external stakeholders in order to
� January 2014 the Board will be requested to
approve the mission/vision goals.
� The Board will be requested to approve
capital allocation for specific detailed business plan for each one of the
initiatives. Responding
to a question from Trustee LeChase, Mr. Lurie said the Authority will be
communicating with potential customers in terms of getting market intelligence
and feedback from them in terms of what they would like to see in the service
bundle, after which the Authority to will develop its market plan.� This will take place early next year.
Quiniones added that the Authority has a lot of experience in energy efficiency
projects and renewable projects which include not only large governmental
buildings, but also some private sector economic development customers and
municipals electric systems.� He
continued that, historically, the Authority implements programs that are
effectuated through legislation, e.g., RNY or other hydro programs, Energy
efficiency, Built Smart; however, the Authority is now taking a different
approach, looking at the what customers indicate they would like from the
Authority and making a determination if the Authority has skill-set that can be
developed to address those needs its customers value.� After a screening process, the Authority will
determine if it has the resources to assist the customers. 4. 2014 Operating Budget and Filing of the 2014-2017 Four-Year Financial Plan
Pursuant to Regulations ��������������� of the Office of the State
Comptroller������������������������� The President and Chief Executive
Trustees are requested to approve the 2014 Operating Budget, Operations and
Maintenance (�O&M�) Budget, Capital Budget and Energy Services Budget for
the Power Authority.� The Operating
Budget sets forth the expected revenues and expenses of the Authority� and includes the recommended 2014 O&M
Budget, the Capital Budget and the Energy Services Budget (see attached
Exhibits �4-A,�� �4-B,� �4-C� and �4-D,�
respectively) in the following amounts:
��������������������������������������������������������������������������������������������������������������� ��������������� �� ������������ 2014
Budget���������������������������������������� ($ million)
������������������������������� O&M��������������������� �� ���������������������������� ���$ 379.3�������������� ������������������������������� Capital�������������������������������������������������� �� $ 279.3
��������������� ���� ���������� Energy
Services����������������������������������� �� $ 222.3
Also, in accordance with
regulations of the Office of the State Comptroller (�OSC�), the Trustees are
requested to approve the 2014-2017 Four-Year Financial Plan (�Four-Year
Financial Plan� � see attached Exhibit �4-E�) and authorize: (i) submitting the
approved Four-Year Financial Plan to OSC, (ii) posting the approved Four-Year
Financial Plan on the Authority�s website and (iii) making the approved
Four-Year Financial Plan available for public inspection at not less than five
convenient public places throughout New York State.
Authority is committed to providing
clean, low-cost and reliable energy consistent with its commitment
to the environment and safety, while promoting economic development and job
development, energy efficiency, renewables and innovation, for the benefit of
our customers and all New Yorkers.� The
2014 Budgets are intended to provide the Authority�s operating facilities and
support organizations with the resources needed to meet this overall mission
and the Authority�s strategic objectives. The OSC implemented regulations in
March 2006 addressing the preparation of annual budgets and four-year financial
plans by �covered� public authorities, including the Authority.� (See 2 NYCRR Part 203 (�Part 203�)).� These regulations establish various
procedural and substantive requirements, discussed below, relating to the
budgets and financial plans of public authorities.� The Budget and Four-Year Financial Plan have
been prepared in accordance with these regulations.
In approving the 2014 O&M,
Capital and Energy Services Budgets, the Trustees will be authorizing spending
for 2014 operations, spending for capital projects and general plant purchases
of $750,000 or less.� There are no
requests for new positions in the 2014 Budget.�
In accordance with the Authority�s Expenditure Authorization Procedures,
the President and Chief Executive Officer may, during the course of the year,
authorize an additional 1.0% in the O&M budget, up to 15 new positions,
capital projects of $3 million or less, or an increase in spending of no more
than $1 million to a capital project previously approved by the Trustees.� All other spending authorizations must be
��������������� The base O&M budget of $379.3 million (Exhibit
�4-B�) reflects a renewed focus on the effective operation and maintenance of
the Authority�s critical investments in New York State�s electric
The 2014 O&M Budget for
Operations provides $215 million for baseline, or recurring, work.� In addition to the baseline work, scheduled
maintenance outages at the 500 MW plant and the Small Clean Power Plants
(totaling $13 million) and planned enhancements in non-recurring maintenance
work at the operating facilities (totaling $55 million) are designed to support
high reliability goals.� Some of the
major non-recurring projects include: Niagara Dam Face Repair, ($5.7 million);
Marcy Substation Auto Transformer and Reactor Refurbishment, ($4.0 million);
St. Lawrence Region Line Clearance Remediation ($3.5 million); Painting of
Barnhart Island Bridge ($3.3 million); Massena Autobreakers 1&2 Reactor
Banks Refurbishment ($3.2 million); Joint Works with Ontario-Hydro ($2.1
million); Flynn Water Storage Tanks Refurbishment ($1.7 million) and the St.
Lawrence Control Room Asbestos Abatement ($1.6 million).
Most of the increase in the budget
for the support functions ($4.0 million) consists of increases in fringe
benefits (Other Post-Employment Benefits (�OPEB�), New York State pension costs
and medical benefits), consulting expenses for executive initiatives (includes
funding for the Energy Management Control Center), the on-site Master's Program
and hardware and software maintenance and license costs along with lost rental
income in the White Plains Office.
Payroll costs, which include
salaries, overtime and fringe benefits, account for $206.7 million, or 54.5% of
the budget, down from 55.8% last year.�
Overall, headcount at the Authority will not increase, as there are no
requests for new positions in the 2014 Budget.
���������� The Astoria
Energy II Budget totals $27.0 million and represents the contractual O&M
costs for the plant, which was placed in commercial operations in New York City
in July 2011.� These costs are being
recovered from the Authority�s New York City Governmental customers, who are
beneficiaries of the outputs of these projects, via a long-term contract.� Capital
The 2014 Capital Budget (Exhibit �4-C�) totals $279.3 million, an increase of $87.0 million from
the 2013 Budget.� Of this amount, $187.5
million � or 67% of the total � represents planned investments in the
Authority�s Upstate New York facilities at Niagara and St. Lawrence, as well as
in its statewide Transmission network.�
Significant capital projects for 2014 include the Lewiston Pump
Generation Plant Life Extension and Modernization (�LEM�), ($59.8 million); the Massena 765/230 kv Multi-Unit Autotransformer
Replacement, ($18.9 million); the St. Lawrence
Breaker and Relay Replacement, ($14.0 million); Marcy South Series Compensation, ($10.2 million); the Niagara 115 kv Outdoor Circuit Breaker Upgrade, ($10.0 million); the Coopers Corner Shunt Reactor, ($9.4 million); the St. Lawrence Generator Step-Up Transformer
Replacement, ($6.8 million); and the St. Lawrence
Nature Center ($6.3 million).
The Capital Budget includes $9.1 million of minor
additions and general plant purchases that will be authorized by approval of
The Budget for Energy
Services and Technologies (Exhibit �4-D�) totals $222.3 million, an increase of
$21.5 million over the 2013 budget.�
These expenditures will be subsequently recovered over time from the
benefiting customers.� The Budget
includes increased funding for energy efficiency projects for Authority
customers and other eligible entities as the Authority strives to support
Governor Cuomo�s improved energy efficiency and clean, renewable energy goals. Operating Budget
2014 Operating Budget (Exhibit �4-A�) sets forth the expected revenues and
expenses of the Authority on a Project/Market Area basis and serves as the
basis for the Authority�s financial reporting during the year.� Expected revenues received from customers are
based on contracts and tariffs that are approved by the Trustees.� Market-based sales of any surplus energy from
the Authority�s generating facilities or purchases made on behalf of customers
(except for those made through previously approved purchased power agreements)
are assumed to be transacted at the market clearing price in the wholesale
market.� Projected expenses for O&M
are detailed above.� The Other Expenses
category largely reflects various accruals (e.g., Other Post-Employment Benefit
prior service obligations) and other miscellaneous expenses for which Trustee
approval is sought on a case-by-case basis (e.g., Power for Jobs Transitional
Payments, Recharge New York Residential Discount Program, etc.).� Also reflected in the 2014 Operating Budget
is an assumed level of contributions to New York State totaling $90
million.� Any such contribution may only
be made if authorized by the Legislature and upon a determination (not
requested at this time) by the Trustees that the payment would be feasible and
advisable at the time of such disbursement. Four-Year Financial Plan
Under Part 203 of the OSC Regulations, the Trustees
are required to adopt a 2014 Budget and Four-Year Financial Plan (Exhibit
�4-E�).� The 2014 Budget, which is the
first year of the Four-Year Financial Plan, is being brought to the Board for
approval at this time.� The remaining
three years are indicative forecasts.�
The approved Four-Year Financial Plan must be available for public inspection
not less than seven days before the commencement of the next fiscal year for a
period of not less than 45 days and in not less than five convenient public
places throughout the State.� The
approved Four-Year Financial Plan must also be submitted to OSC, via electronic
filing through the Public Authorities Reporting Information System maintained
by OSC and the Authority Budget Office, within seven days of approval by the
Trustees. The regulations also require the Authority to post the Four-Year
Financial Plan on its Web site.
Under Part 203, each approved Four-Year Financial Plan
must be shown on both an accrual and cash basis and be prepared in accordance
with generally accepted accounting principles; be based on reasonable
assumptions and methods of estimation; be organized in a manner consistent with
the public authority�s programmatic and functional activities; include detailed
estimates of projected operating revenues and sources of funding; contain
detailed estimates of personal service expenses related to employees and
outside contractors; list detailed estimates of non-personal service operating
expenses and include estimates of projected debt service and capital project
expenditures.� ��������������� Other key elements that must be incorporated in each
approved budget and four-year financial plan are a description of the budget
process and the principal assumptions, as well as a self-assessment of risks to
the budget and financial plan.�
Additionally, the approved Four-Year Financial Plan must include a
certification by the Chief Operating Officer.
Payment of O&M expenses will be
made from the Operating Fund.� Payment
for Capital and Energy Services expenditures will be made from the Capital Fund
and the Energy Conservation Construction and Effectuation Fund, respectively.� Monies of up to $332.2 million from the Operating
Fund will be transferred to the Capital Fund for capital expenditures, provided
that at the time of withdrawal of such amount or portions of such amount, the
monies withdrawn are not then needed for any of the purposes specified in
Sections 503(1)(a)-(c) of the General Resolution Authorizing Revenue
Obligations, as amended and supplemented.�
The 2014 Operating Budget shows adequate earnings levels so that the
Authority may maintain its financial goals for cash flow and reserve
requirements. The Four-Year Financial Plan net
income estimates for each of the years 2015 through 2017 are indicative
forecasts and the Trustees are not being asked to approve any revenue and
expenditure amounts for those years at this time.
��������������� The Director of Budgets and the
Vice President of Financial Planning recommend the Trustees approve the 2014
Operation and Maintenance, Capital and Energy Services Budgets and the
Operating Budget as discussed herein and authorize (i) submitting the approved
Four-Year Financial Plan to the Office of the State Comptroller in the
prescribed format, (ii) posting the approved Four-Year Financial Plan on the
Authority�s Web site and (iii) making the approved Four-Year Financial Plan
available for public inspection at not less than five convenient public
locations throughout New York State.
the approval of the above-requested actions by adoption of a resolution in the
That the 2014 Operating Budget, specifically including the 2014 Budgets for
Operation and Maintenance, Capital and Energy Services expenditures, as
discussed in the foregoing report of the President and Chief Executive Officer,
are hereby approved; and be it further
That up to $332.2 million of monies in the Operating Fund are hereby authorized
to be withdrawn from such Fund and deposited in the Capital Fund, provided that
at the time of withdrawal of such amount or portions of such amount, the monies
withdrawn are not then needed for any of the purposes specified in Sections
503(1)(a)-(c) of the General Resolution Authorizing Revenue Obligations as
amended and supplemented, with the satisfaction of such condition being
evidenced by a certificate of the Treasurer or the Deputy Treasurer; and be it
That pursuant to 2 NYCRR Part 203, the attached 2014-2017 Four-Year Financial
Plan, including its certification by the Chief Operating Officer, is approved
in accordance with the foregoing report of the President and Chief Executive
That pursuant to 2 NYCRR Part 203, the Corporate Secretary be, and hereby is,
authorized to submit the approved Four-Year Financial Plan to the Office of the
State Comptroller in the prescribed format, post the approved Four-Year
Financial Plan on the Authority�s website and make the approved Four-Year
Financial Plan available for public inspection at not less than five convenient
public places throughout New York State; and be it further�������������� ��������������� RESOLVED,
That the Chairman, the Vice Chair, the President and Chief Executive Officer
Donald Russak provided highlights of staff�s recommendation to the Trustees.� In response to a question from chairman
Koelmel, Mr. Russak said there are some positive indicators offsetting some of
the negative drivers indicated in the Plan. �For example, the contract with Alcoa,
negotiated with the expectation that Alcoa will be reinvesting in its smelter
in Massena, NY, will result in an increase in energy revenues effective January
1, 2014; increased rates of previously-approved contracts will add additional
revenues; and revenues from the hydro resources.�� Responding
to further questioning from Chairman Koelmel, Mr. Russak said it will not be
necessary for the Authority to pull back on investments on its facilities
because of expenses related to the HTP project.�
Responding to still further questioning from Chairman Koelmel, Mr. Russak
said that investments in long-life assets such as the HTP project is typical in
the utility business, e.g. the Authority�s reinvestment in its 51-year Lewiston
Plant in order to keep it operational for the next 50 years.� He continued that the HTP project will add to
the city�s reliability since it will have access to a greater array of energy
resources; there are other opportunities that will be available to the
Authority at the end of the purchase agreement; and, in the life of the
agreement, the Authority will get its investment back.� Responding to comment from the Chairman, Mr.
Russak agreed that this project will not deter the Authority from investing in
its facilities and carrying out its charge in keeping with its mission.� Mr. Russak said in his opinion, the Authority
is in a very strong position to finance its ongoing operations and strategic
initiatives.� The Authority�s balance
sheet is very strong at this time; it has borrowing capacity and, with the cash
flows that it is generating, it will be able to finance this project without it
having any detrimental effect on the Authority�s core business.
response to a question from Trustee Foster, Mr. Russak said that the plan for
the $726 million T- LEM program that was approved by the Board is to invest in
the Authority�s facilities from now until the year 2023.� This will include work on the Authority�s
substations and transmission lines which are 50 - 60 years old. 5. Power Allocations:
Allocations Under the Recharge New York Program
1. Approve allocations of Recharge New York (�RNY�) Power
available for �retention� purposes to the businesses listed in Exhibit �5a-A;�
2. Approve allocations of RNY Power available for
�expansion� purposes to the businesses listed in Exhibit �5a-B;� and
3. Approve the transfer of the RNY Power allocation
identified in Exhibit �5a-E.�
by the Economic Development Power Allocation Board (�EDPAB�) at its December
17, 2013 meeting. ��������������� BACKGROUND
as part of Chapter 60 (Part CC) of
the Laws of 2011 (�Chapter 60�).� The
program makes available 910 megawatts (�MW�) of �RNY Power,� 50% of which will
be provided by the Authority�s hydropower resources and 50% of which will be
procured by the Authority from other sources.�
RNY Power contracts can be for a term of up to seven years in exchange
for job and capital investment commitments.
��������������� RNY
Power is available to businesses and not-for-profit corporations for job
retention and business expansion and attraction purposes.� Specifically, Chapter 60 provides that at
least 350 MW of RNY Power shall be dedicated to facilities in the service
territories served by the New York State Electric and Gas, National Grid and
Rochester Gas and Electric utility companies; at least 200 MW of RNY Power
shall be dedicated to the purpose of attracting new businesses and encouraging
expansion of existing businesses statewide; and up to 100 MW shall be dedicated
for eligible not-for-profit corporations and eligible small businesses
Under the statute, �eligible
eligible not-for-profit corporation; however, an eligible applicant shall not
overnight accommodations. �At its meeting
on April 24, 2012, EDPAB defined a retail business as a business that is
primarily used in making retail sales of goods or services to customers who
personally visit such facilities to obtain goods or services, consistent with
the rules previously promulgated by EDPAB for implementation of the Authority�s
Economic Development Power program.
Prior to entering into a contract
part of Governor Andrew M. Cuomo�s initiative to foster business activity and
streamline economic development, applications for all statewide economic
development programs, including the RNY Power Program, have been incorporated
into a single on-line Consolidated Funding Application (�CFA�) marking a
fundamental shift in how State economic development resources are marketed and
allocated.� Beginning in September 2011,
the CFA was available to applicants. �The
CFA continues to serve as an efficient and effective tool to streamline and
expedite the State�s efforts to generate sustainable economic growth and
employment opportunities. �All
applications that are considered for an RNY Power allocation are submitted
through the CFA process.
Applications for RNY Power are subject to a competitive evaluation
process and are evaluated based on the following criteria set forth in the
statutes providing for the RNY Power Program (the �RNY Statutes�): �(i) the significance of the cost
power allocation will result in new capital investment in the state by the
power allocation is consistent with any regional economic development council
strategies and priorities;
salaries, benefits and number of jobs at the facility for which a recharge New York power
allocation is requested;
applicant's facility that would receive the recharge New York power allocation to the economy of
the area in which such facility is located;
��������������� ��������������� Based
the relevant Regional Economic Development Council under the third and eighth
criteria.� ��������������� In
among other things, attempted to maximize the economic benefits of low-cost
NYPA hydropower, the critical state asset at the core of the RNY Power Program,
while attempting to ensure that each recipient receives a meaningful RNY Power
Business applicants with relatively
high scores were recommended for allocations of retention RNY Power of 50% of
any recommended allocation. �Not-for-profit corporation applicants that
scored relatively high were recommended for allocations of 33% of the requested
amount or average historic demand, whichever was lower.� These allocations were capped at 5 MW.� Applicants currently receiving hydropower
RNY Power allocations have been
awarded by the Trustees on six prior occasions � in April, June, September and
December of 2012, and March and July of this year.� There is currently 73 MW of unallocated RNY
Power of the 710 MW block made available for business �retention� purposes. �Of that 710 MW retention block, 100 MW was set
aside for not-for-profit corporations and small businesses, of which 9.8 MW is
available to allocate to such entities.�
Lastly, there is 134.6 MW of unallocated RNY Power of the 200 MW block
made available for business �expansion� purposes.� These figures reflect Trustee actions on RNY
Power applications taken prior to any actions the Trustees take today. DISCUSSION
Retention-Based RNY
Power Allocations � Action Item
The Trustees are asked to address
applications submitted via the CFA process for RNY Power retention-based
allocations. �Consistent with the
evaluation process as described above, EDPAB recommended at its December 17,
2013 meeting that RNY Power retention allocations be awarded to the businesses
listed in Exhibit �5a-A.� �Each business
has stated a willingness to create or retain jobs in New York State.� Additionally, these applicants will be
committing to capital investments in exchange for the recommended RNY Power
The RNY Power �retention�
allocations identified in Exhibit �5a-A� are each recommended for a term of
seven years. �An allocation recommended
by EDPAB qualifies the subject applicant to enter into a contract with the
Authority for the purchase of the RNY Power. �The Authority�s standard RNY Power contract
template, approved by the Trustees at their March 27, 2012 meeting, contains
provisions addressing such things as effective periodic audits of the recipient
of an allocation for the purpose of determining contract and program
compliance, and for the partial or complete withdrawal of an allocation if the
recipient fails to maintain mutually agreed-upon commitments, relating to,
among other things, employment levels, power utilization, and capital
investments. �In addition, there is a
requirement that a recipient of an allocation perform an energy efficiency
audit at its facility not less than once during the first five years of the
term of the allocation. As noted in Exhibit �5a-A,� some of
these applicants are also being recommended for expansion-based allocations,
having satisfied the criteria for both components of the RNY Power
Program.� Expansion-Based RNY
applications submitted for RNY Power expansion-based allocations via the CFA
process which request allocations from the 200 MW block of RNY Power dedicated
by statute for for-profit businesses that propose to expand existing businesses
or create new business in the State.�
These applications sought a RNY Power allocation for either (i) expansion
only, in the case of a new business or facility, or (ii) expansion and retention, in the case of an
existing business.� EDPAB recommended at
its December 17, 2013 meeting that RNY Power expansion-based allocations be
made to the businesses listed in Exhibit �5a-B.�� Each such allocation would be for a term of
As with the evaluation process used
for the retention recommendations described above, applications for the
respective amounts of the expansion-related allocations listed in Exhibit
�5a-B� are largely intended to provide approximately 70% of the individual
expansion projects� estimated new electric load.� Because these projects have estimated new
electric load amounts, and to ensure that an applicant�s overestimation of the
amount needed would not cause that applicant to receive a higher proportion of
RNY Power to new load, the allocations in Exhibit �5a-B� are recommended based
on an �up to� amount basis.�� Each of
these applicants would be required to, among other commitments, add the new
electric load as stated in its application, and would be allowed to use up to
the amount of their RNY Power allocation in the same proportion of the RNY
Power allocation to the requested load as stated in Exhibit �5a-B.�� The contracts for these allocations would
also contain the standard provisions previously summarized in the last
paragraph of Section 1 above. Ineligibility
Determination � Informational Item
��������������� In the process of reviewing the
current round of applications for RNY Power, EDPAB determined that the
applicants listed on Exhibit �5a-C� propose projects that constitute a retail
business as defined by EDPAB, and therefore are ineligible for RNY Power. �No action by the Trustees is required on these
applications. Applications Not
Recommended or Not Considered � Informational Item
As indicated on Exhibit �5a-D�,
EDPAB decided not to recommend two applicants for expansion-based RNY Power
allocations, not to recommend two applicants for retention-based RNY Power
allocations, and further decided not to consider other applications for an RNY
Power allocation.� Three applications were not
recommended for an RNY Power allocation because the potential recommended
amount, based on the applicant�s requested amount did not meet the 10 kW
allocation amount requirement established by the Authority for RNY Power
allocations.� Additionally, the other
application not recommended for an expansion-based RNY Power allocation did not
meet the requirement set by the Authority of creating new jobs as a result of
EDPAB did not consider the other
applications listed on Exhibit �5a-D� for one or more of the following reasons:
(i) the application was withdrawn; (ii) the application was not sufficiently
complete to permit evaluation and/or applicants were unresponsive to requests
from Authority staff for more information necessary to fully evaluate the
applications; (iii) the application was submitted by a Transitional Electricity
Discount (�TED�) beneficiary; (iv) the applicant does not have a demand meter;
and/or (v) in the case of expansion-based requests for RNY Power, the applicant
proposed projects that were too premature to enable the applicant to make the commitments
necessary for an allocation of RNY Power.�
No action by the Trustees is required on these applications.
Transfer of RNY Power
� Action Item
��������������� At its
December 17, 2013 meeting, EDPAB approved and recommended that the Trustees
approve the transfer of an RNY Power allocation for one company due to an
acquisition.� The transfer is described
in Exhibit �5a-E.��� The company will
agree to the respective job and capital investment commitments made in the
original applications. �The Trustees have
previously authorized transfers of RNY Power and other Authority power programs
like Economic Development Power in similar circumstances.� Allocations Declined
or Rescinded � Informational Item
������� EDPAB
has recommended, and the Trustees have approved, hundreds of RNY Power
allocations since the inception of the program.�
Specifically, 801 allocations totaling 779 MW have been awarded to more
than 750 businesses and not-for-profit organizations throughout the State.� In the course of reviewing the award and
contract offered, many awardees have decided to decline the award or have not
been responsive to the contract offering.
������� Awardees
have declined 65 allocations totaling 48.2 MW by not accepting all or part of
the RNY Power allocations awarded to them.�
The reasons for such decisions include an inability to gain corporate
sign-off on an award�s agreed-upon commitments, a material change in the
awardee�s business status after being approved for RNY, a reluctance to accept
certain contractual conditions such as audit requirements, and potential
minimal savings due to the particular operating characteristics of the
awardee�s facility.
addition, 60 allocations totaling 28.5 MW have been rescinded by the Authority
after a reasonable amount of time had elapsed since the time of award with no
response from the awardees. �After
multiple outreaches and transmittal of contract documents by NYPA staff, these
awardees were non-responsive and the awards have been withdrawn.� The declined and rescinded awards are listed
on Exhibit �5a-F.��� The result of the
allocations being declined and rescinded positively affects the availability of
MWs to allocate in future evaluation periods.�
Recommendation The Manager � Business Power
allocations of RNY Power for retention purposes to the businesses listed in
Exhibit �5a-A� as indicated therein; (2) approve the allocations of RNY Power
for expansion purposes to the businesses listed in Exhibit �5a-B� as indicated
therein; and (3) authorize the transfer of the RNY Power allocation identified
in Exhibit �5a-E� as indicated therein.
Michael Huvane provided highlights of staff�s recommendation to the Trustees.� In response to a question from Trustee
Foster, Mr. Huvane said the statute does not prohibit the Authority from
negotiating contracts for more than seven years; the Board of Trustees makes
that determination.� Ms. McCarthy agreed
and added that the earlier power programs were for shorter terms; however,
based on feedback from businesses interested in the low-cost power for longer
term contracts, the Authority revised it to seven years.� An exception can be made at the request of a
company if the Board finds that the request is reasonable.
Chair Mahoney being recused from the vote as it pertains to G.C. Hanford
Manufacturing Co., John Mezzalingua Associates LLC and Pathfinder Industries,
Inc. and Trustee LeChase as it pertains to RED-Rochester, LLC.
recommended that the Authority approve the Recharge New York (�RNY�) Power allocations
for retention purposes to the applicants listed in Exhibit �5a-A�; and
EDPAB has recommended that the Authority approve the RNY Power allocations for
expansion purposes to the applicants listed in Exhibit �5a-B�; and ��������������� ��������������� WHEREAS,
EDPAB has recommended that the Authority authorize the transfer of the RNY
Power allocation identified in Exhibit �5a-E�;
THEREFORE BE IT RESOLVED, That the Authority hereby authorizes the allocations
of RNY Power for retention purposes to the applicants listed on Exhibit �5a-A�
in accordance with the terms described in the foregoing report of the President
and Chief Executive Officer; and be it further
That the Authority hereby authorizes the allocations of RNY Power for expansion
purposes to the applicants listed on Exhibit �5a-B� in accordance with the
That the Authority hereby authorizes transfer of allocation of RNY Power identified
in Exhibit �5a-E� in accordance with the terms described in the foregoing
b. Allocations of Hydropower and Notice of Public Hearing���� The President and Chief Executive
approve allocations of available hydropower totaling 7,100 kilowatts (�kW�) to
Brunner International, Inc. (�Brunner�) (2,400 kW), Gracious Living USA
(�Gracious Living�) (3,700 kW) and Ford Motor Company (�Ford�) (1,000 kW), as
further described herein and in Exhibit �5b-A.��
These allocations, collectively, will support capital expansion of
nearly $207 million and the creation of 643 jobs in Western New York (�WNY�). �The Trustees are also requested to authorize a
public hearing pursuant to Public Authorities Law (�PAL�) �1009 on the proposed
direct sale contract for the allocation to Gracious Living, the current form of
which is attached as Exhibit �5b-B.�
��������������� The allocation of hydropower to
Brunner will support a capital investment of $15 million and the creation of 43
new jobs in Medina (Orleans County). �The
allocation of hydropower to Ford will support a capital investment of $150
million and the creation of 350 new jobs in Buffalo.� The allocation of hydropower to Gracious
Living will support a capital investment of $41.975 million and the creation of
250 new jobs in Buffalo (Erie County). BACKGROUND
allocate 250 megawatts (�MW�) of firm hydroelectric power as EP and up
to be allocated in such county.� Each application for an allocation
routinely occur with National Grid, Empire State Development Corporation, the
Buffalo Niagara Enterprise and Niagara County Center for Economic Development and
Erie County Industrial Development Agency to coordinate other economic
development incentives that may help bring projects to New York State.� Staff confers with these entities to help
maximize the value of hydropower to improve the economy of WNY and the State of
New York.� Each organization has
expressed support for the following recommendations.
time, 8,245 kW of unallocated EP and 35,228 kW of unallocated RP are available
to be awarded to businesses under the criteria set forth in PAL Section
1005(13)(a).� ��������������� BRUNNER
Brunner International, Inc.,
located in Medina in Orleans County, submitted an application for hydropower
requesting 4,800 kW in connection with the construction of a 45,000-square-foot
addition to expand the production of machined axle forgings sold to large,
heavy-duty truck and trailer suppliers.�
A long-time Authority hydropower customer, Brunner currently receives
four allocations totaling 5,500 kW. Started in 1992, Brunner has built
itself into a market/industry leader in the manufacturing of brake shoes,
S-Cams and axles for heavy-duty trucks and trailers. �Brunner is the largest private sector employer
in Orleans County, with 363 full-time employees (an employment level well above
Brunner�s contractual commitment with NYPA).�
It also has two facilities in Niagara Falls, Ontario, Canada. Brunner�s project would expand axle
shaft production, which began in Medina in 2007 with the help of a hydropower
allocation.� The expansion project would
help Brunner compete with low-cost manufacturers in India and China,
significantly increase Brunner�s already considerable market share, and
solidify the overall long term future of the Medina plant.� Brunner has also made a strong commitment to
its facilities in Orleans County by investing over $6 million in capital
purchases, upgrades and repair and maintenance of existing equipment during the
The company proposes an investment
of $15 million with plans to begin production in the fall of 2014 and hire 43
new employees to support its expanded business operations.���������� The job creation ratio for a
recommended amount of 2,400 kW is 18 new jobs per MW.� This ratio is below the historic average of
19.2 new jobs per MW over the past four years.�
The total project investment of $15 million results in a capital
investment ratio of $6.25 million per MW.�
This ratio is below the four-year historic average of $20.9 million per
Both Kentucky and Tennessee are
courting Brunner for this expansion. �Locating
the new operations in that part of the country would provide certain advantages
to Brunner, including significantly reduced shipping costs, as most of
Brunner�s suppliers and customers are located in that region. An allocation of
hydropower would help Brunner withstand increased competition from Asia and
support the company�s decision to choose Medina rather than other suitable
locations in the United States for this expansion.
ESD has offered an incentive
package of $750,000 under the Excelsior Jobs Program.� In addition, the Orleans County Economic
Development Agency is offering its standard PILOT tax incentives.
Staff recommends that a RP allocation
of 2,400 kW be awarded to Brunner International, Inc. in order to help secure
an investment of $15 million and creation of 43 new jobs at its facility in
WNY, as detailed in Exhibit �5b-A-1.�� FORD
Ford Motor Company has submitted an
application for hydropower requesting 1,000 kW to design, build, upgrade
several press lines and install ten new assembly lines to provide stamping and
welded sheet metal assemblies for 2015 Ford vehicles. Ford�s Buffalo Stamping Plant has
been in operation for 63 years manufacturing various metal stampings and welded
sub-assemblies for Ford�s automotive car and truck assembly plants in North
America.� A long-time Authority
hydropower customer, Ford currently receives three allocations totaling 8,700
kW.� According to Ford, the hydropower
allocations provided to this plant have been critical in maintaining
operations, preserving as many jobs as possible and positioning the Buffalo
facility to compete internally for new investment and production. Ford�s application for hydropower
details its plans to invest $150 million to upgrade tooling and add ten new
assembly lines to provide stampings and welded sheet metal assemblies for 2015
Ford vehicles at its Lakeshore Road location.�
The project would consist of design, build and installation of
automation and support for several press lines and new assembly lines,
including line tools and manufacturing aids.�
It will also include a tooling launch of the next generation of
technologies including robots for material handling, welding and roll hemming;
weld controllers with adaptive welding; and technologies to provide discrete
drives, motion, process and safety control for automated sub-assembly
equipment, servo driven pumps, and other systems. Ford would commit to creating 350
new positions at its facility above its current employment of 640 as a result
of this project, with a start-up of the new equipment and assembly lines in the
fourth quarter of 2014. The calculated job creation ratio
for 350 new jobs and a 1 MW proposed allocation is 350 jobs per MW. This ratio
is well above the historic average of 19.2 new jobs per MW for the last four
years.� The total capital investment of
$150 million committed by Ford would result in a capital investment ratio of
$150 million per MW.� This ratio is well
above the four-year historic average of $20.9 million per MW.
The automotive industry remains
highly competitive in both North America and world-wide.� Ford�s Buffalo Stamping Plant is competing
against the seven other Ford stamping plants in North America for this major
expansion project.� The application
states that this project will not only secure the future growth of the Buffalo
Stamping Plant, but will position the facility to handle Ford�s next generation
of business. ESD has offered an incentive
package of $5 million under the NY Works Fund Capital Grant, up to $2 million
in tax credits under the Excelsior Jobs Program.� In addition, the WNY Power Proceeds
Allocation Board has recommended that NYPA provide Ford with a $1 million grant
from the Western New York Economic Development Fund.�� ��������������� Staff
recommends that an EP allocation totaling 1,000 kW be awarded to Ford in
exchange for a total of $150 million of capital investment and the creation of
350 well-paying new jobs, as detailed in Exhibit �5b-A-2.� GRACIOUS
LIVING USA Gracious Living USA (�Gracious
Living�) submitted an application for hydropower requesting 4,500 kW to
renovate and refurbish four existing, abandoned buildings on 50 acres of property
in Buffalo to open an injection molding manufacturing and warehouse
facility.� An owner-operated business,
the Gracious Living family of companies was established in 1980 and has become
the largest injection molding company in Canada (outside the automotive
industry). �The company manufacturers and
imports resin-based outdoor furniture, accessories, tables, storage units,
pools, housewares and a variety of other indoor and outdoor plastic products.
Currently based in Woodbridge,
Ontario, Gracious Living is looking to establish a greater presence in the U.S.
and is planning to renovate and refurbish nearly 50 acres of property on
Fuhrmann Boulevard along Buffalo�s Outer Harbor.� It would be their first move into the U.S. in
an attempt to expand its manufacturing and distribution business in this market
while at the same time lower operating costs and growing its U.S. customer
base.� Gracious Living is currently
operating under a 120-day due diligence period to conduct environmental testing
and other investigations at the property.��
Gracious Living plans to renovate
the four existing buildings for manufacturing and warehouse purposes during
most of 2014 and intends to begin operations next winter.� The company plans to install 40 injection
molding machines over a three-year period with a total three-year investment of
$41,975,000.� Gracious Living would hire
150 employees during the first year of operations and would commit to create a
total of 250 jobs within three-years of operation.
The job creation ratio for a
recommended amount of 3,700 kW is 68 new jobs per MW.� This ratio is well above the historic average
of 19.2 new jobs per MW over the past four years. �The total project investment of $41.975
million results in a capital investment ratio of $11.34 million per MW.� This ratio is below the four-year historic
average of $20.9 million per MW.
As a plastic injection molding
manufacturer, Gracious Living operates in a highly competitive market with
major competitors for its products located in China, as well as Georgia,
Massachusetts, and Pennsylvania.�
Additionally, the company�s major customers (e.g., big box retailers) are
continually demanding lower-cost goods.�
A hydropower allocation will support the company�s decision to move
forward with this project, creating much-needed WNY-based jobs and using
private investment to return a large parcel of land along the Buffalo
Waterfront to productive use.
package of $2 million under the Excelsior Jobs Program.��� Staff recommends 3,700 kW of RP be
awarded to Gracious Living in order to secure an investment of $41.975 million
and the creation of 250 jobs in WNY, as detailed in Exhibit �5b-A-3.�� CONTRACT
with Gracious Living and anticipates receiving customer approval of a contract
form substantially similar to that attached as Exhibit �5b-B.�� Accordingly, the Trustees are requested to
authorize a public hearing pursuant to PAL �1009 on the contract form attached
as Exhibit �5b-B.�� A public hearing is
not needed for Brunner or Ford as they are existing hydropower customers each
with the WNY contract form that allows additional allocations and associated
commitments to be folded into the existing contract.� ��������������� As
charges, plus taxes or any other required assessments, all as set forth in the
Authority�s Service Tariff No. WNY-1.�
The proposed form of contract would also include (i) commercially
billing arrangement between the Authority and its EP/RP customers, and (ii)
provisions authorizing data transfers and addressing other utility-driven
requirements which are necessary for efficient program implementation. �Such provisions have been used in other
Authority contracts forms, including the Authority�s Recharge New York Power
Program contracts.
typical, the provision of electric service for this hydropower allocation is
job reporting requirements and a job compliance threshold of 90%.� Should Gracious Living�s actual jobs reported
fall below the compliance threshold, the Authority has the right to reduce the
allocation on a pro-rata basis. ��������������� Each of
the recommended allocations would be sold to these companies pursuant to the
Authority�s Service Tariff No. WNY-1, which applies to all allocations of EP
and RP commencing July 1, 2013.�
Transmission and delivery service would be provided by National Grid in
accordance with its Public Service Commission-filed service tariffs.
��������������� RECOMMENDATION
Allocations and Compliance recommends that the Trustees approve the allocations
of Replacement Power to Brunner International, Inc. (2,400 kW) and to Gracious
Living USA (3,700 kW), and 1,000 kW of Expansion Power to Ford Motor Company,
as detailed in Exhibit �5b-A.�� Lastly, the Trustees are requested
to authorize the Corporate Secretary to convene a public hearing on the form of
the proposed contract finally negotiated with Gracious Living, the current form
of which is attached as Exhibit �5b-B,� and transmit copies of the proposed
form of the contract to the Governor and legislative leaders pursuant to PAL
�1009. Staff will report to the Board of
Trustees on the public hearing and the proposed contract and, at a later time,
make additional recommendations regarding the proposed contract.
adoption of a resolution in the form of the resolution below.�
��������������� RESOLVED, That allocations totaling 7,100 kW of Authority hydropower to
Brunner International, Inc. (2,400 kW Replacement Power), Ford Motor Company
(1,000 kW Expansion Power), and Gracious Living USA (3,700 kW Replacement Power),
as detailed in Exhibit �5b-A,� be, and hereby are, approved on the terms set
be it further ��������������� RESOLVED,
proposed form of the direct sale contract for the sale of hydropower and energy
finally negotiated with Gracious Living USA (the �Contract�), subject to rates
previously approved by the Trustees; and be it further
State, �in accordance with the provisions
of PAL �1009; and be it further ��������������� RESOLVED,
things, take any and all actions and execute and deliver any and all agreements,
6. Awards of Fund Benefits from the Western New York Economic Development Fund Recommended by the Western New York Power Proceeds Allocation Board
��������������� The Trustees are requested to: (1)
Board (�WNYPPAB�) and make awards of Fund Benefits from the Western New York
Economic Development Fund (�Fund�) to the applicants listed in Exhibit �6-A-1�
(Visit Buffalo Niagara, Niagara University, Forest Lawn Heritage Foundation, CNC
Technical Solutions, Inc., Washington Mills, Inc., Lineagen, Inc., and Ford
Motor Company), and Exhibit �6-A-2� (Niagara Label Company, Inc., OSC
Manufacturing & Equipment Services, Inc. and Yancey�s Fancy, Inc./D&Y
Cheeses, Inc.), in the amounts listed on such Exhibits.
For clarity, the three applicants
listed in Exhibit �6-A-2� were recommended for an award by the WNYPPAB at its
meeting on September 10, 2013.� However,
these applications were not forwarded to the Trustees for consideration at that
time because Authority staff needed to review the proposed projects for
compliance with the State Environmental Quality Review Act.� That review has been completed and the award
recommendations for these projects are being presented to the Trustees for
consideration at this time.
For informational purposes, Exhibit
�6-B� lists: (1) projects and applicants the WNYPPAB has determined are
ineligible for Fund Benefits; (2) projects the WNYPPAB has determined are not
being recommended for an award of Fund Benefits; and (3) applications that have
been deferred for future consideration by the WNYPPAB.�������������� BACKGROUND
signed into law the Western New York Power Proceeds Allocation Act (the �Act�).� The Act provides for the creation, by the
Authority, of the Western New York Economic Development Fund.� The Fund consists of the aggregate excess of
revenues received by the Authority from the sale of Expansion Power (�EP�) and
Replacement Power (�RP�) produced at the Niagara Power Project that was sold in
the wholesale energy market over what revenues would have been received had
such energy been sold on a firm basis to an eligible EP or RP customer under
the applicable tariff or contract.� Under
the Act, the monies in the Fund are available to support economic development
in Western New York (�WNY�) by eligible applicants for eligible projects as
�Fund Benefits.�
marketing and advertising efforts for WNY state tourism and business; and
and sustainable building programs and services, and the construction, installation
and/or operation of facilities or equipment done in connection with any such
projects, programs or services.� Allocations of Fund Benefits may
2. WNYPPAB
criteria applicable to EP, RP and Preservation Power (�PP�), and for
revitalization of industry as provided in Public Authorities Law �1005.� Additionally, WNYPPAB is authorized to
consider the extent to which an award of Fund Benefits is consistent with the
strategies and priorities of the Regional Economic Development Council having
responsibility for the region in which an eligible project is proposed.� The WNYPPAB met on March 4, 2013
and, in accordance with the Act, adopted by-laws, operating procedures,
guidelines related to the application, and a form of application.� At that time, WNYPPAB defined �retail
Benefits and make recommendations to WNYPPAB on the applications.� 3. Application Process
Fund Benefits, the WNYPPAB established a series of application due dates
coupled with a schedule of dates through the end of 2013 on which the WNYPPAB
would meet to consider applications.� In
addition, the application process was promoted through a media release and with
assistance from state and local entities, including the Western New York and
Finger Lakes Regional Economic Development Councils,
the Empire State Development Corporation and other local and regional economic
development organizations within the State.�
A webpage was created that is hosted on WWW.NYPA.GOV/WNYPPAB with
application instructions, a link to the approved application form and other
program details including a contact phone number and email address staffed by
the Western New York Empire State Development regional office.� Additionally, ESD and the Authority hosted a
meeting on June 25, 2013 in Buffalo with a plethora of WNY economic development
agencies to further educate them on the Fund and how they can continue to
market the Fund to their constituents.� ������������������������������� In this fourth round, the WNYPPAB
received 40 applications seeking more than $23 million in Fund Benefits.� WNYPPAB�s staff analyzed the applications and
made recommendations to WNYPPAB concerning each of the applications based on
eligibility requirements and Program Criteria.�
Copies of the recommendations from the WNYPPAB staff are attached as
�Exhibit �6-C.�� At its November 18, 2013 meeting,
the WNYPPAB took the following actions on applications for Fund Benefits:
4. �Recommendations
for Awards of Fund Benefits The WNYPPAB is recommending to the
Trustees that the applicants listed on Exhibit �6-A-1� each receive an award of
Based on the applications, these proposed projects would directly create
or retain approximately 902 jobs in WNY.�
The total investment to be expended on the proposed projects is expected
to exceed $108M.��� The WNYPPAB is also recommending
that the applicants listed on Exhibit �6-A-2� each receive an award of Fund
Benefits in the amounts indicated.� Based
on these applications, the proposed projects would directly create or retain
approximately 214 jobs in WNY.� The total
amount to be expended on these proposed projects is expected to exceed $38M.
In total, based on the respective
applications, the projects listed on Exhibits �6-A-1� and �6-A-2� are expected
to create or retain approximately 1,116 jobs and result in an expenditure of
project investment in the total amount of approximately $146M.
5. Other Determinations
For the Trustees� information, Exhibit
been deferred for future consideration.�
This information is being provided for information only.� No action by the Trustees is required with
respect to these matters. �
Under the Act, a recommendation for
proposed projects, it is not possible at this time to identify all of the terms
and conditions that would be applicable to each award and memorialized in an
Award Contract.� With the Trustees�
contract and program compliance, and where appropriate, terms providing for the
employment levels and/or project element due dates.� Recommendation The Vice President, Marketing recommends
Board (�WNYPPAB�) and make awards of Fund Benefits to the applicants listed in
Exhibits �A-1� and �A-2� in the amounts indicated, conditioned upon an agreement
to be negotiated with each applicant on the final terms and conditions that
would be applicable to each award to be contained in an Award Contract that is
approved by the President and Chief Executive Officer and approved as to form
Vice President and General Counsel, or so approved by their designees; �
designees, in consultation with the Empire State Development Corporation, be
conditions that will be applicable to the awards; and
(3) the Senior Vice President
� Economic Development and Energy Efficiency, or his designees, be
authorized to execute, on behalf of the Authority, Award Contracts for each of
the awards listed on Exhibit �6-A� subject to the foregoing conditions. For the reasons stated, I recommend
John Giumarra provided highlights of staff�s recommendation to the Trustees. In
response to a question from Chairman Koelmel, Mr. Russak said that since the
program began, the Authority has accumulated approximately $26 million and the
amounts deposited in the fund is based on the megawatts of unsold replacement
power.� Responding to further questioning
from Chairman Koelmel, Mr. Russak said deposits to the fund are made on a
��������������� WHEREAS, the Western New York Power Proceeds Allocation Board (�NYPPAB�)
has recommended that the Authority make awards of Fund Benefits from the
Western New York Economic Development Fund (�Fund�) to the applicants listed in
Exhibits �6-A-1� and �6-A-2�;
THEREFORE BE IT RESOLVED, That the Authority hereby accepts the recommendations
of the WNYPPAB and authorizes awards of Fund Benefits to the applicants listed
on Exhibits �6-A-1� and Exhibit �6-A-2� in the amounts identified in such
Exhibits, conditioned upon an agreement between the Authority and each
applicant on the final terms and conditions that would be applicable to each
award and set forth in a written award contract (�Award Contract�) between the
Authority and each applicant that is approved by the President and Chief
Executive Officer and approved as to form by the Executive Vice President and General Counsel,
or so approved by their designees; and be it further
for each of the awards listed on Exhibit �6-A� subject to the foregoing conditions; and be it further
7. Motion to Conduct an Executive Session
that the Authority conduct an executive session to consult with counsel.� Upon motion made and seconded an Executive Session was held.
Session.� Upon motion made and seconded, the
9. ��Next Meeting
Meeting of the Trustees will be held on January
28, 2014, at 11:00 a.m., at the Clarence
D. Rappleyea Building, White Plains, New York, unless otherwise designated
by the Chairman with the concurrence of the Trustees. Closing
made and seconded, the meeting was adjourned by the Chairman at approximately 1:30