ECONOMIC DEVELOPMENT POWER
October 25, 2010
Videoconference – 10:00a.m.
New York Power Authority Offices:
123 Main Street, 16th Floor, White Plains, NY
501 7th Avenue, 9th Floor, New York, NY
St. Lawrence/FDR Power Plant, 830 Barnhart Island, Massena, NY
30 South Pearl Street, 10th Floor, Albany, NY
Empire State Development Corporation, 95 Perry Street, Suite 500, Buffalo, NY
City of Oswego Community Development, 20 West Oneida Street, 3rd Floor, Oswego, NY
A regular meeting of the Economic Development Power Allocation Board was held via videoconference at the following participating locations:
The following Members of the Board were present at the following locations:
Kenneth Schoetz, Chairman (Buffalo, NY)
Eugene L. Nicandri, Member, (Massena, NY)
Robert B. Catell, Member, (New York, NY)
Mary Vanouse, Member, (Oswego, NY)
Also in attendance were:
Terryl Brown Executive Vice President & General Counsel, NYPA
James F. Pasquale Senior Vice President - Marketing & Economic Development, NYPA
Karen Delince Corporate Secretary, NYPA
Michael Huvane Vice President - Marketing, NYPA
Michael Saltzman Director – Media Relations, NYPA
Timothy Muldoon Manager – Business Power Allocations & Compliance, NYPA
Dennis Eccleston Chief Information Officer, Information Technology, NYPA
Lorna Johnson Assistant Secretary, NYPA
Sheila Baughman Senior Secretary, NYPA
1. Adoption of Minutes
The Minutes of the Regular Meeting of September 27, 2010 were unanimously adopted.
2. Power for Jobs and Energy Cost Savings
Benefits Programs Compliance Review
Authority staff conducted a job compliance review of Power for Jobs (“PFJ”) and Energy Cost Savings Benefit (“ECSB”) program customers focusing on current jobs reported compared to contractual job commitments. Seventy nine percent of customers continuing in the program are in compliance. Of 514 customers, 406 are compliant and 108 customers are non-compliant.
The members of the Economic Development Power Allocation Board (“EDPAB”) are requested to take no action on the Power for Jobs (“PFJ”) and Energy Cost Savings Benefit (‘ECSB”) customers detailed in the Exhibits “B1” and “B2” attached.
PFJ provides either power or electricity savings reimbursements to businesses, manufacturers and not-for-profit corporations that have agreed to retain or create jobs in New York State. Under the requirements of each program, businesses could have their benefits reduced if they fail to meet their contractual commitments.
ECSB protects the customers enrolled in the Economic Development Power, High Load Factor and Municipal Distribution Agency power programs from utility bill increases that result from higher market prices. These businesses may also have their benefits reduced if they fail to meet their contractual commitments.
On August 9, 2010, Governor David Paterson signed legislation extending the PFJ and ECSB programs until May 15, 2011. Due to the retroactive nature of the legislation and in light of the need to minimize disruption in receipt of program benefits, the legislation required the expedited extensions of PFJ and ECSB benefits and deferral of the job compliance review until after the applicant has been awarded extended benefits.
EDPAB recommended extending both the PFJ and ECSB program benefits at their meeting of August 17, 2010. In addition, the Board recommended deferral of the job compliance review until, on or before October 26, 2010. The Authority Trustees approved the recommended extended benefits to PFJ and ECSB customers at their meeting of August 30, 2010, as well as supporting the recommendation to defer compliance review until on or before October 26, 2010.
On August 10, 2010, applications were sent out to the 443 existing Power for Jobs customers. Four hundred and twenty eight customers submitted applications to the Authority requesting to extend their contracts. Ten customers chose to opt out of the program. The customers continuing in the program reported a total of 231,863 jobs as compared to 234,522 jobs, an aggregate of their commitments. Job compliance is 99% for the PFJ program in its entirety.
Also, on August 10, 2010, applications were sent out to the 90 existing Energy Cost Savings Benefit customers. Eighty six customers submitted applications to the Authority requesting to extend their contracts. Three customers chose to opt out of the program. The customers continuing in the program reported a total of 78,919 jobs as compared to 80,761jobs, an aggregate of their commitments. Job compliance is 98% for the ECSB program in its entirety.
There were five PFJ customers and one ECSB customer that did not respond and have yet to submit an application for extended benefits. Two follow up communications have been sent to these customers along with numerous individual outreaches by staff. A final certified letter was sent on October 11, 2010, advising that eligibility for extended benefits requires the submittal of an application and that non-responsiveness would effectively preclude them from participating in the programs.
Seventy nine percent of the customers in the PFJ and ECSB programs are compliant as detailed in Exhibits “A1” and “A2”.
Given the current state of the economy, along with the short term of these extended benefits, staff recommends the members of the EDPAB board take no action on the companies that were non-compliant as detailed in Exhibits “B1” and “B2.” If a new economic development program is created next year, these companies will be evaluated based on new program criteria with a detailed application process. Resulting new program benefit levels, if any, would effectively be reset.
It is requested that the Economic Development Power Allocation Board authorize and recommend that the Authority’s Trustees take no action on Power For Jobs and Energy Cost Savings Benefits customers that are non-compliant, as detailed in Exhibits “B1” and “B2.”
Mr. James Pasquale remarked that 79% of PFJ/ECSB customers (406) are in compliance but 21% (108 customers) are not. He continued by saying that the customers have been impacted by the poor economy of the last two years and many are still trying to survive the effects of the downturn. Reductions to allocations for these customers could be critically harmful to their businesses at this time. Mr. Pasquale added that it is now the end of October and if the Authority reduced allocations, based on IOU notice requirements and scheduling issues, the reductions would not become effective until January and the program’s sunset five months later, on May 15, 2011. He said that everyone is aware of the current economic conditions businesses are working in. Reducing these companies’ allocations would only exacerbate their financial distress. Lastly, based on legislation, the Authority would not be able to allocate any power taken from existing customers to new customers.
EDPAB has been asked to recommend that the Board take no action on 90 PFJ and 18 ECSB customers who reported that their job levels were not in compliance with their job commitments.
In response to a question from Mr. Nicandri, Mr. Pasquale said that although 21% of customers are non-compliant, the jobs created or retained, overall, were at 99% and 98% because some businesses have surpassed their commitments.
In response to a question from Chairman Schoetz, Mr. Pasquale said that he did not have the dollar amount of the shortfall at this time but that information is readily available and he would get back to the Board with the amount.
Ms. Mary Vanouse added that some of the businesses that are non-compliant have rebates.
Mr. Pasquale said that all of the businesses know what their commitments are. He added that rebate customers are different from power customers in that there are no notice requirements for IOUs. He also added that rebate customers may benefit more from the program than traditional power customers.
In response to a question from Chairman Schoetz, Mr. Pasquale stated that the May 15 deadline impacts all customers and any new program would require them to reapply. Chairman Schoetz said that this issue has been on-going since spring and that there are some large compliance failures. Although he is ready to vote in favor of staff’s recommendation, the large compliance failure requires the Board to take action at some point.
Mr. Robert Catell agreed with Chairman Schoetz’s comments and suggested that at the December meeting staff present a recommendation to the Board as to what action will be taken with regard to non-compliant customers in the future.
Mr. Nicandri added, for the record, that there is no tax dollars associated with this program. Chairman Schoetz agreed.
Ms. Vanouse said that if there is consideration of a new program, non-compliant businesses should be informed that their non-compliance could affect their future application. There should be some accounting for the benefits they have received.
Mr. Pasquale stated that he will direct staff to send letters to non-compliant companies informing them that non-compliance may have an effect the level of benefit they may receive in the future.
The following resolution was unanimously adopted by members of the Board present.
RESOLVED, That the Board recommends that the Power Authority of the State of New York take no action on the 90 Power for Jobs and 18 Energy Cost Savings Benefits customers who are not meeting their job commitments for the reasons discussed herein.
3. Next Meeting
The next meeting of the Board is to be determined.