ECONOMIC DEVELOPMENT POWER

ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

MINUTES

June 18, 2008

Video Conference – 9:00 a.m.

New York Power Authority Offices:

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

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

Niagara Power Project, 5777 Lewiston Road, Lewiston, NY

1. Approval of the Minutes of the Meeting of May 19, 2008

2. Power for Jobs Extended Benefits, Energy Cost Savings Benefits

Awards and Economic Development Power Contracts Extensions

3. Power for Jobs Extended Benefits Recommendations

for Electricity Savings Reimbursements

Con Edison - Service Territory

A. Stein Meat Products, Inc.

Brooklyn – Kings County

Columbia University – Trustees

New York - New York County

Liz Claiborne, Inc.

New York - New York County

Mount Sinai Medical Center

New York - New York County

New Museum of Contemporary Art

New York - New York County

NYU Medical Center

New York - New York County

The Brooklyn Historical Society

Brooklyn – Kings County

Long Island Power Authority - Service Territory

American Technical Ceramics

Huntington Station – Suffolk County

Enzo Clinical Labs, Inc.

Farmingdale – Suffolk County

Good Samaritan Hospital

West Islip – Suffolk County

Long Beach Medical Center

Long Beach – Nassau County

North Shore Health System

Manhasset – Nassau County

Standard Microsystems Corp.

Hauppauge – Suffolk County

Ultimate Precision Metal

Farmingdale – Suffolk County

National Grid - Service Territory

Bison Foods - Div. of Upstate Farms

Buffalo – Erie County

Cooper Hand Tools

Cortland – Cortland County

CWM Chemical Services, LLC

Model City – Niagara County

Diemolding Corporation

Canastota – Madison County

Edward John Noble Hospital

Gouverneur - St. Lawrence County

Fiber Glass Industries Inc.

Amsterdam – Montgomery County

Intertek Testing Services

Cortland – Cortland County

Lewis County General Hospital

Lowville – Lewis County

Lydall Manning

Green Island – Albany County

McLane Eastern

Baldwinsville - Onondaga County

Nathan Littauer Hospital & Nursing Home

Gloversville – Fulton County

OAB Holdings, Inc.

Buffalo – Erie County

Robison & Smith, Inc.

Gloversville – Fulton County

RSA Solutions Inc.

Amherst – Erie County

Sabic Innovative Plastics (GE Plastics)

Selkirk – Albany County

St. Joseph's Hospital Health Center

Syracuse – Onondaga County

Syracuse China Company

Syracuse – Onondaga County

Syracuse Plastics, Inc.

Liverpool – Onondaga County

Vicks Lithograph & Printing

Yorkville – Oneida County

New York State Electric & Gas

Egli Machine, Inc.

Sidney - Otsego County

Endicott Interconnect Technologies

Endicott – Broome County

Kraft Foods

Walton – Delaware County

Manitoba Corporation

Lancaster – Erie County

Merritt Plywood Machinery, Inc.

Lockport – Niagara County

Milward Alloys

Lockport – Niagara County

Seneca Foods Corporation

Geneva – Ontario County

Upstate Niagara Cooperative, Inc.

Buffalo - Erie County

Orange & Rockland Utilities

IBM

Sterling Forest - Orange County

Rochester Gas & Electric

IBM

Rochester – Monroe County

Jada Precision Plastics Co.

Rochester – Monroe County

Seneca Foods Corporation

Marion - Wayne County

OTHER BUSINESS

4. Next Meeting

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

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

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

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

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

Frank S. McCullough, Jr., Member (Albany, NY)

Bernard P. McGarry, Member (Albany, NY)

James A. Duncan, Member, (Lewiston, NY)

Daniel C. Gundersen, Chairman (Excused)

Also in attendance were:

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

Anne B. Cahill Corporate Secretary, NYPA

Thomas Warmath Vice President and Chief Risk Officer, NYPA

Joseph C. Carline Assistant General Counsel, NYPA

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

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

Mary Jean Frank Associate Corporate Secretary, NYPA

Lou Paonessa Community Relations, NYPA

1. Adoption of Minutes

The minutes of the meeting of May 19, 2008, were unanimously adopted.

2. Power for Jobs Extended Benefits, Energy Cost

Savings Benefit Awards and Economic Development

Power Program Contract Extensions

SUMMARY

The Members of the Economic Development Power Allocation Board (“EDPAB”) are requested to recommend extensions of the Power for Jobs (“PFJ”) and Energy Cost Savings Benefits (“ECSB”) programs to June 30, 2009 for existing PFJ customers, listed in Exhibit “2-A” and existing ECSB customers, listed in Exhibit “2-C”. In addition, the Board is requested to recommend extensions to the underlying allocation contracts for the economic development program customers, listed in Exhibit “2-B,” through June 30, 2009, to coincide with the term of extended ECSB benefits to such entities.

BACKGROUND

Power for Jobs

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

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

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

In 2008, a new law (Chapter 645 of the Laws of 2008) included provisions extending program benefits until June 30, 2009.

Contract Extensions and ESCB Awards

The Authority sells electricity to businesses under several State-authorized economic development power programs. These power sales are made through the Economic Development Power Program, High Load Factor Manufacturer Program, Municipal Distribution Agency Industrial Power Program and other power sales programs. The capacity and energy for these sales are provided by market purchases and supported by other Authority sources as needed. In some instances, these customers are served directly by the Authority and in other cases the customers receive Authority power through resale arrangements with municipal distribution agencies or investor-owned utilities. Contracts range in length from five to more than 20 years. Extensions of Economic Development Power contracts are subject to the recommendation of the Board.

Chapter 313 of the Laws of 2005 allowed customers from the above listed economic development programs that would otherwise be exposed to price increases to apply for benefits under the ECSB program. The legislation also authorized the Authority to sell certain amounts of unallocated hydropower into the wholesale market and use the net earnings from such sales to fund the ECSBs.

Discussion

Power for Jobs

The Board is requested to recommend that the Authority Trustees approve extensions to the contracts or electricity savings reimbursements (rebates) for the businesses listed in Exhibit “2-A.” Fifty-nine businesses have elected to switch from a power contract to an electricity savings reimbursement, as allowed by law. Collectively, these organizations have agreed to retain more than 240,000 jobs in New York State in exchange for the contract extensions or rebates. The contracts will be extended and the rebate program will be in effect until June 30, 2009, the program’s newly enacted sunset date. The power will be wheeled by the investor-owned utilities as indicated in the Exhibit.

Contract Extensions and ECSB Awards

The customers detailed in Exhibit “2-B” have allocation contracts previously recommended by the Board and approved by the Authority Trustees that expire on June 30, 2008. We are requesting the Board to recommend extending these agreements until June 30, 2009, so that these customers may continue to receive the benefits associated with the newly enacted law. The extensions will help maintain costs and enable the customers to compete more effectively. In addition, the customers will further secure employment levels in New York State.

The Board is also requested to recommend that the Authority Trustees approve the payment of ECSBs to the businesses listed in Exhibit “2-C.” Collectively, these organizations have agreed to retain nearly 99,000 jobs in New York State in exchange for these benefits. The companies will be eligible to receive these benefits until June 30, 2009.

Recommendation

It is recommended that the Economic Development Power Allocation Board authorize and recommend to the Power Authority extension of Power for Jobs contracts and rebates, Energy Cost Savings Benefits awards and the contract extensions as set forth above.

Mr. James Pasquale presented the highlights of staff’s recommendations to the Board, noting that right before the meeting three customers had decided to switch from extensions of their contracts to rebates and saying that the minutes would reflect this change. In response to a question from Mr. Frank McCullough, Mr. Pasquale said that staff would make every effort to complete its review of all of the customer applications by the July meeting of the Board. Mr. McCullough asked that the minutes reflect that the Board’s approval of this item was subject to staff’s review of the customers’ applications. Mr. James Duncan made a motion to approve the item as so stated by Mr. McCullough

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

RESOLVED, That the Board hereby authorizes and recommends to the New York Power Authority, extension through June 30, 2009 of Power for Jobs program contracts and electricity savings reimbursements, Energy Cost Savings Benefits awards and the length of contracts between the Authority and Economic Development Power program customers.

3. Power for Jobs Program – Extended Benefits

SUMMARY

The Members of the Economic Development Power Allocation Board (“EDPAB”) are requested to approve extended benefits for 45 Power for Jobs (“PFJ”) customers as listed in Exhibit “3-A”.

BACKGROUND

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

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

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

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

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

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

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

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

DISCUSSION

EDPAB is requested to recommend that the Authority Trustees approve electricity savings reimbursement rebates to the 45, all of which are meeting their current job commitment and are listed in Exhibit “3-A”. Collectively, these organizations have agreed to retain more than 51,000 jobs in New York State in exchange for rebates. The rebate program will be in effect until June 30, 2009, the programs’ sunset.

RECOMMENDATION

It is requested that the Economic Development Power Allocation Board recommend that the Authority Trustees approve the payment of electricity savings reimbursements to the 45 business listed in Exhibits “3-A”

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

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

Con Edison - Service Territory

A. Stein Meat Products, Inc.

Brooklyn – Kings County

Columbia University – Trustees