ECONOMIC DEVELOPMENT POWER

ALLOCATION BOARD

 

MINUTES

 

September 16, 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

                                                St. Lawrence Power Project, 830 Barnhart Island, Massena, NY

 

1.             Approval of the Minutes of the Meeting of July 22, 2008

 

2.             Power for Jobs Extended Benefits Recommendations for Electricity Savings Reimbursements

 

A.                  COMPANIES IN JOB COMPLIANCE 

 

Con Edison - Service Territory

 

New York Presbyterian Hospital New York - New York County   NYU Medical Center New York - New York County

S.R. Guggenheim Museum New York - New York County

 

Long Island Power Authority - Service Territory

 

Ultimate Precision Metal

Farmingdale – Suffolk County

 

National Grid - Service Territory

 

C.R. Bard, Inc Queensbury – Warren County   Clarkson University Potsdam – St. Lawrence County   Cooper Industries Syracuse - Onondaga County   CWM Chemical Services, LLC Model City – Niagara County   Dal Tile Corporation Olean – Cattaraugus County   Diemolding Corporation Canastota – Madison County   Dodge-Graphic Press, Inc Utica – Oneida County   Edward John Noble Hospital Gouverneur - St. Lawrence County   Fiber Glass Industries, Inc Amsterdam – Montgomery County   Ford Motor Company Buffalo – Erie County   Higbee, Inc Syracuse - Onondaga County   Intertek Testing Services Cortland – Cortland County   Killian Manufacturing Corporation Syracuse - Onondaga County   Lewis County General Hospital Lowville – Lewis County

Lydall Manning Green Island – Albany County   McLane Eastern Baldwinsville – Onondaga County   Mohawk Paper Mills Cohoes – Albany County   Oldcastle Precast, Inc South Bethlehem - Albany County   Organichem, Inc Rensselaer – Rensselaer County   PCI Paper Conversion, Inc Syracuse - Onondaga County   Pepsi Bottling Group LLC Latham - Albany County   Quad Graphics, Inc Saratoga Springs – Saratoga County   Robison & Smith, Inc Gloversville - Fulton County   Specialized Packaging Radisson, Inc Baldwinsville - Onondaga County   Standard Manufacturing Co., Inc Troy – Rensselaer County   Syracuse Plastics, Inc Liverpool - Onondaga County   Vicks Lithograph & Printing Yorkville – Oneida County

 

New York State Electric & Gas – Service Territory

 

Corning, Inc (Big Flats) Big Flats – Chemung County   Corning, Inc (Sullivan Park)  Corning – Steuben County

IEC Electronics Corp. Newark – Wayne County   Manitoba Corporation Lancaster – Erie County

 

Orange and Rockland – Service Territory

 

IBM - Sterling Forest

Poughkeepsie – Dutchess County

 

Rochester Gas & Electric – Service Territory

 

Gorbel Corp Fishers – Ontario County

IBM – Rochester Rochester – Monroe County

 

 

 

                B.            COMPANIES NOT IN JOB COMPLIANCE

 

National Grid - Service Territory

 

Cascades Tissue Group

Waterford – Saratoga County

 

3.                    Power for Jobs Program and Energy

 Costs Savings Benefits – Compliance Review

 

 

4.                    Other Business

 

 

5.                    Next Meeting

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

 

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

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

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

4)       St. Lawrence/FDR Power Plant, 830 Barnhart Island, Massena, NY

 

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

Kenneth Schoetz, Chairman (Albany, NY)

James A. Duncan, Member (Niagara, NY)

Bernard P. McGarry, Member (Albany, NY)

Eugene L. Nicandri, Member, (Massena, NY)

 

 

Also in attendance were:

 

Arthur T. Cambouris           Acting Executive Vice President & General Counsel, NYPA

Anne B. Cahill                      Corporate Secretary, NYPA                               

Joseph C. Carline                 Assistant General Counsel, NYPA

James F. Pasquale                Director – Marketing Analysis and Administration

Michael Saltzman                 Director – Media Relations, NYPA

Mary Jean Frank                  Associate Corporate Secretary, NYPA

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

Thomas Warmath                Vice President & Chief Risk Officer, NYPA

 

 

 

 

 

 

 

 

 

 

Introduction

 

                Chairman Schoetz introduced Eugene Nicandri as a new member of the Board who would not be voting at today’s meeting, since his oath of office had not yet been filed with the Secretary of State. 

 

1.             Adoption of Minutes

The minutes of the meeting of July 22, 2008 were unanimously adopted.

 

2.             Power for Jobs Extended Benefits

 

 

SUMMARY

 

The Members of the Economic Development Power Allocation Board (“EDPAB”) are requested to approve extended benefits for 39 Power for Jobs (“PFJ”) customers as listed in Exhibit “A” and “B”. 

 

BACKGROUND

 

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

 

The PFJ program originally made 400 megawatts (“MW”) of power available and was to be phased in over three years.  As a result of the initial success of the program, the Legislature amended the PFJ statute to accelerate the distribution of the power and increase the size of the program to 450 MW.                In May 2000, legislation was enacted that authorized additional power to be allocated under the program.  Legislation further amended the program in July 2002.

 

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

 

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

 

Approved contract extensions entitled customers to receive 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 39 PFJ customers, 38 of which are meeting their current job commitment and are listed in Exhibit “A”. However, one customer reported actual job numbers below their contractual commitment we are recommending that this customer have their allocation reduced proportionately to their job shortfall where appropriate. This customer is listed in Exhibit “B”. Collectively, these organizations have agreed to retain more than 30,000 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 39 business listed in Exhibits “A” and “B”.

 

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

 

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

 

 

A.            COMPANIES IN JOB COMPLIANCE 

 

Con Edison - Service Territory

 

New York Presbyterian Hospital New York - New York County   NYU Medical Center New York - New York County

S.R. Guggenheim Museum New York - New York County

 

Long Island Power Authority - Service Territory

 

Ultimate Precision Metal

Farmingdale – Suffolk County

 

National Grid - Service Territory

 

C.R. Bard, Inc Queensbury – Warren County   Clarkson University Potsdam – St. Lawrence County   Cooper Industries Syracuse - Onondaga County   CWM Chemical Services, LLC Model City – Niagara County   Dal Tile Corporation Olean – Cattaraugus County   Diemolding Corporation Canastota – Madison County   Dodge-Graphic Press, Inc Utica – Oneida County   Edward John Noble Hospital Gouverneur - St. Lawrence County   Fiber Glass Industries, Inc Amsterdam – Montgomery County   Ford Motor Company Buffalo – Erie County   Higbee, Inc Syracuse - Onondaga County   Intertek Testing Services Cortland – Cortland County   Killian Manufacturing Corporation Syracuse - Onondaga County   Lewis County General Hospital Lowville – Lewis County

Lydall Manning Green Island – Albany County   McLane Eastern Baldwinsville – Onondaga County   Mohawk Paper Mills Cohoes – Albany County   Oldcastle Precast, Inc South Bethlehem - Albany County   Organichem, Inc Rensselaer – Rensselaer County   PCI Paper Conversion, Inc Syracuse - Onondaga County   Pepsi Bottling Group LLC Latham - Albany County   Quad Graphics, Inc Saratoga Springs – Saratoga County   Robison & Smith, Inc Gloversville - Fulton County   Specialized Packaging Radisson, Inc Baldwinsville - Onondaga County   Standard Manufacturing Co., Inc Troy – Rensselaer County   Syracuse Plastics, Inc Liverpool - Onondaga County   Vicks Lithograph & Printing Yorkville – Oneida County

 

New York State Electric & Gas – Service Territory

 

Corning, Inc (Big Flats) Big Flats – Chemung County   Corning, Inc (Sullivan Park)  Corning – Steuben County

IEC Electronics Corp. Newark – Wayne County   Manitoba Corporation Lancaster – Erie County

 

Orange and Rockland – Service Territory

 

IBM - Sterling Forest

Poughkeepsie – Dutchess County

 

Rochester Gas & Electric – Service Territory

 

Gorbel Corp Fishers – Ontario County

IBM – Rochester Rochester – Monroe County

 

B.            COMPANIES NOT IN JOB COMPLIANCE

 

National Grid - Service Territory

 

Cascades Tissue Group

Waterford – Saratoga County

 

 

                NOW THEREFORE BE IT RESOLVED, That the Board hereby finds and determines that such applications meet the requirements of the extended benefits provisions of the Power for Jobs legislation contained in Article 6 of the Economic Development Law as amended by Chapter 59 of the Laws of 2008; and be it further

 

                RESOLVED, That the Board recommends to the Power Authority of the State of New York the 39 applications for extended benefits recommendations for electricity savings reimbursements discussed herein totaling 43,104 kW until June 30, 2009.

 

 

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

 

SUMMARY

 

The members of  the Economic Development Power Allocation Board (“EDPAB”)  are  requested to approve modifications to the benefits for 22 Power for Jobs (“PFJ”) customers and five Energy Cost Savings Benefit (“ECSB”) customers as detailed in Exhibits “A” and “B” that have reported actual job numbers below their contractual commitments.  EDPAB is requested to approve reductions to their allocations proportionately to their job shortfalls, where appropriate.  In addition, EDPAB is requested to approve that no modifications be made to the benefits for 26 PFJ customers and two ECSB customers that, after having reported actual job numbers below their contractual commitments, have applied for and met the criteria to have their benefits reinstated in full through the reconsideration process.

 

BACKGROUND

 

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

 

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

 

In 2008, a new law (Chapter 59 of the Laws of 2008) included provisions extending program benefits for both programs until June 30, 2009.

 

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

 

DISCUSSION

 

At its meeting on June 30, 2008, EDPAB recommended that the Authority’s Trustees approve the extension of benefits for 482 PFJ and 102 ECSB program customers through June 30, 2009.  A blanket extension was given, subject to staff review of the customers’ applications to determine if they are in compliance with their prior contractual commitments. 

 

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

 

Staff has completed their review of 48 PFJ customers and eight ESCB customers whose applications indicated job commitment shortfalls as listed in Exhibits “A” and “B.”  Staff received and reviewed 40 letters from these customers making a case to keep their full benefits. 

 

A total of 26 PFJ and two ECSB customers have met the criteria in full; therefore staff recommends these customers have no modification made to their benefits.

 

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

 

 

In addition, staff has determined that one ECSB customer has partially met the criteria, and therefore, should have its’ allocation reduced, in part, based on its job shortfall.

 

Finally, staff is recommending that 16 PFJ customers and five ECSB customers that have either not submitted a request for reconsideration or have not met the criteria have their allocations reduced proportionately to their job shortfalls.

 

RECOMMENDATION

 

It is requested that the Economic Development Power Allocation Board recommended that the Power Authority’s Trustees approve modifications to the benefits for 22 PFJ customers and six ESCB customers to have their benefits reduced proportionately to their job commitment shortfalls, where appropriate.   In addition, EDPAB recommends the Trustees are approve that no modifications be made to the benefits for 26 PFJ customers and two ECSB customers that, after having reported actual job numbers below their contractual commitments, have applied for and met criteria to have their benefits reinstated in full through the reconsideration process.  The above recommendations are detailed in Exhibits “A” and “B.”

 

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

 

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

 

                NOW THEREFORE BE IT RESOLVED, that the Board hereby finds and determines that such applications meet the requirements of the extended benefits provisions of the Power for Jobs legislation contained in Article 6 of the Economic Development Law as amended by Chapter 59 of the Laws of 2008; and be it further

 

                RESOLVED, That the Board recommends to the Power Authority of the State of New York the 56 applications for extended benefits recommendations for electricity savings reimbursements discussed herein totaling 29,344 kW until June 30, 2009.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.             Other Business

 

            In response to a question from Mr. Nicandri, Chairman Schoetz said that ESDC conducts an annual evaluation of companies receiving ESDC benefits to ascertain if they are compliant with ESDC’s requirements.  

                Mr. Duncan said that he recalled that EDPAB, about 10 years ago, had lengthy conversations with Authority staff about giving some direction to non-compliant companies about where to go for help (whether to the Department of Labor, Department of Education, ESDC or other agencies).  Mr. Pasquale said that the Power for Jobs and Economic Development Power programs are closed to new business, but that when those programs were open to new business, monthly meetings were held with ESDC.  He said that monthly meetings are still held with ESDC about applications for the Authority’s hydropower programs.