New York Power Authority Trustees Approve Hydropower Allocations: Low-Cost Power to Support Six Western New York Businesses for 145 New Jobs and $175 Million in Capital Investments

Michael Saltzman
(914) 390-8181

April 4, 2011


WHITE PLAINS—The New York Power Authority (NYPA) Board of Trustees today awarded allocations of low-cost hydropower to six manufacturers in Erie and Niagara counties in return for their creation of 145 new jobs and capital investments of more than $170 million.

The allocations, to be drawn from a block of electricity from NYPA’s Niagara Power Project, are to: Yahoo! Inc, Lockport; APP Pharmaceutical, Grand Island; Graphic Controls Acquisition Corp., Buffalo; I Squared R Element Co., Akron; Niagara Coatings Services, Niagara Falls; and Time Release Sciences, Buffalo.  Five of the six companies benefit from prior hydropower allocations that have spurred their capital investments and creation of jobs.   

“Under Governor Cuomo’s leadership, the New York Power Authority will continue to work with state and local economic development agencies to maximize our low-cost hydropower resources in support of efforts to revitalize the state’s economy and, in particular, Western New York,” said  Michael Townsend, chairman of the NYPA Board of Trustees.

“The expansion plans of Yahoo! demonstrate how the Power Authority’s resources can be the catalyst for improving and diversifying the economy of Western New York,” said John S. Dyson, NYPA trustee. “Yahoo! has demonstrated its commitment to investing in New York State and to continuing to add new high-tech jobs. We are committed to working with Governor Cuomo to advance his Recharge New York agenda by using low-cost hydropower to support economic development efforts throughout the state.”

The latest allocations provide for the allotment of 4,070 kilowatts (kW) from a block of Niagara electricity known as Replacement Power, which is provided for under state law for Western New York businesses committed to creating new jobs from expansion projects.  The allocations are to be provided over five-year contracts commencing when the expansion projects are completed. 

Latest Hydropower Allocations

Yahoo!, Inc. will receive 1,000 kW of low-cost hydropower in support of its plans to expand its Lockport datacenter operations to accommodate growth and move operations from overseas and other states to its Western New York facilities.  The project plan includes a capital investment of $130 million for a 120,000 sq. ft. expansion adjacent to existing facilities and the purchase of new computer equipment, including data servers, routers, storage devices and related hardware.

In May 2009, the NYPA trustees had approved 15 megawatts of hydropower in support of the company’s plans to open a $150 million state-of-the-art data center in Lockport and create 125 new jobs in the region. Just last September, Yahoo! celebrated the opening of the data center. The more recent allocation supports the expansion of the data center, which will be phased into full operation over a three-to-five year period. As a result of the project, Yahoo! will create at least 15 additional jobs with average starting wages and benefits of $55,000 per job.

APP Pharmaceuticals will receive an allocation of 2,000 kW to support the company’s plans for a $30 million expansion that would lead to the addition of 90 jobs to a current work force of 575 at the Grand Island facility. The injectable pharmaceuticals manufacturing operations are expected to take on an expanded role in handling some of the production of an APP facility in Puerto Rico that the company closed. 

APP’s Illinois parent company, Fresenius Kabi Pharmaceuticals Holding, had been considering two other sites for the expansion, including one in North Carolina.     

The company will be installing new and used production equipment at the Grand Island facility; heating, ventilating and air-conditioning system upgrades; and expansion by 13,000 square feet of the existing operational floor space. 

APP is working with the the Erie County Industrial Development Agency (ECIDA) and Empire State Development Corporation (ESDC) to explore other financing in support of the expansion. The facility in Grand Island also benefits from previous NYPA hydropower allocations that have helped underpin the creation of jobs from earlier expansions.

Graphic Controls, which is experiencing increased demand for its specialized printing products, is planning a $1.5 million expansion, including the creation of 12 jobs.  The company, which currently employs 259 people, received an allocation of 120 kW in return for its assurances of capital investments and new jobs at the Buffalo facility.  

Graphic Controls’ printing materials include medical charts and casino machine tickets for national and international markets. The company, which is planning to purchase an additional printing press, had been considering, as an alternative, undertaking the expansion in the United Kingdom, where it has another plant. 

I Squared R Element, which manufactures industrial heating elements, received an allocation of 500 kW in return for its commitment to undertake a $5.27 million expansion for the addition of 20 new jobs at the company’s Akron facility, where 73 people are now employed.

The expansion, which is expected to be completed in 2013, will include the installation of five new furnaces and related equipment and the construction of a 36,000 square-foot facility for housing a portion of the enlarged operation.  

I Squared R, which benefits from a prior NYPA hydropower allocation, also is working with the ECIDA on the possibility of obtaining other financial incentives in support of the expansion.    

Niagara Coatings Services obtained a 200-kW allocation for plans to convert its operations from diesel- to electric-powered equipment. The company’s investment of $300,000 in the new machinery will enhance the productivity of the Niagara Falls facility, which provides sandblasting, industrial coating and painting services. The new equipment will also enhance Western New York air quality by removing from operation less clean diesel-powered engines. 

Niagara Coatings, which is conferring with Niagara County on the possibility of other financial incentives, will add three jobs to its current work force of 14 jobs, in return for the low-cost Niagara power.  The allocation marks the first time the company will receive NYPA hydropower.  

Time Release Sciences (TRS) of Buffalo, a manufacturer of compressed foam products, including Proctor & Gamble’s “Mr. Clean Magic Eraser,” a cleaning sponge, received an allocation of 250 kW for its plans to undertake a $3 million expansion, and adding five new jobs to its current work force of 72.  The expansion includes the construction of a 20,000 square-foot prefabricated manufacturing facility at the same site as TRS’ existing facility.

New machinery and equipment will be added for expanding production of three versions of Magic Eraser and for manufacture of other new products. TRS, which benefits from previous NYPA hydropower allocations, considered the new allocation integral to its expansion plans and its competitively bidding for new business. 

Replacement Power and another large block of Niagara Power, referred to as Expansion Power, account for more than one-third of the project’s firm generating capacity, with the electricity under the two programs reserved for companies within a 30-mile radius of the facility or for businesses in Chautauqua County.

Late last year, long-term NYPA contract extensions, beyond 2013, were approved for the more than 100 Western New York companies currently benefiting from Niagara hydropower. The new contracts will help protect nearly 30,000 jobs and a combined annual payroll of more than $2 billion and ensure capital investments of at least $150 million a year.

About NYPA:

■ The New York Power Authority uses no tax money or state credit. It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity. ■ NYPA is a leader in promoting energy efficiency, new energy technologies and electric transportation initiatives. ■ It is the nation's largest state public power organization, with 17 generating facilities in various parts of New York State and more than 1,400 circuit-miles of transmission lines. ■ Approximately 80 percent of the electricity it produces is clean renewable hydropower.  Its lower-cost power production and electricity purchases support hundreds of thousands of jobs throughout the state. ■For more information, www.nypa.gov.


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