July (pdf) - New York Power Authority

July 26, 2011
average of 15.1 new jobs per MW. The investment of $13 million for the project results in a capital investment ratio
of $43.3 million per MW for a 300 kW allocation. This ratio is above the recent historic average of $23.0 million
per MW.
“An allocation of hydropower would support Moog’s commitment to Western New York. The company’s
plans will further solidify the nearly 2,500 existing high quality jobs and enable the creation of an additional 70 jobs.
Staff recommends an allocation of 300 kW be awarded to Moog in return for an investment of $13.0 million and
creation of 70 jobs at its facility.
Try-It Distributing Co., Inc.
“Try-It Distributing, founded in 1928 in Lackawanna, New York, is a family-owned wholesaler of beer and
non-alcoholic beverages. The company has grown from 100 employees in the 1990’s to over 240 at its Lancaster
office and warehouse facility. To accommodate business growth and to attract new brands for distribution, the
company needs to expand its warehouse operations. Try-It plans to invest $14 million to build an addition to its
existing facility of over 100,000 square feet. A majority of the new facility will be warehousing and requires
climate control equipment able to meet exacting standards of beverage product manufacturers.
“This expansion project would enable Try-It to create 23 new jobs above its current employment of 242.
The jobs ratio for a recommended 200 kW allocation is 115 new jobs per MW, which is well above the recent
historic average of 15.1 new jobs per MW. The investment of $14.0 million results in a capital investment ratio of
$28.0 million per MW which is above the two-year historic average of $23.0 million per MW for hydropower
allocations approved since January 2009.
“The Lancaster IDA is supporting this project with tax abatement incentives. Additionally, Try-It is
working with NYSERDA on energy-efficient, new construction measures, as well as pursuing certain aspects of
LEED certification applicable to warehousing facilities.
“The wholesale beverage industry is in consolidation mode with smaller, family-owned businesses not
being able to keep up with demanding beverage producers and the scale of competition. The project would enable
Try-It to increase operational efficiencies, add sales volume, reduce costs and acquire more brands for distribution.
An allocation of hydropower is an important factor in Try-It’s decision to expand operations because in its volume
driven industry, operating costs are directly tied to sales, which, in turn, drives employment growth. Staff
recommends an allocation of 200 kW be awarded to Try-It in return for a $14.0 investment and the creation of 23
new jobs.
Proposed Contracts
“The proposed Contracts for Moog and Try-It follow the standard commercial terms offered to EP and RP
customers. The Authority will directly sell firm electric service from the Niagara plant, consisting of firm power
(capacity) and energy service. Power service is subject to pro-rata curtailment when there is insufficient generation
at the Niagara and St. Lawrence/FDR facilities. Delivery will be provided and billed directly to the Customers by
the local utility, New York State Electric and Gas (‘NYSEG’). Arrangements for the delivery will be agreed to by
the Authority, the Customers and NYSEG prior to any delivery under the proposed Contracts. The Authority will
continue to act as the Load Serving Entity and will bill the Customers for all ISO charges as it currently does for
both direct sale and sale-for-resale billing procedures.
“Regarding compliance requirements of the Contracts, the allocation amount will be subject to an
enforceable employment commitment of 2,567 jobs in the case of Moog and 265 jobs in the case of Try-It. The
Contracts include annual job reporting requirements and a standard job compliance threshold of 90%. Should the
Customer’s actual jobs reported fall below the compliance threshold, the Authority has the right to reduce the
allocation on a pro-rata basis. The rates, terms and conditions for the sale are contained in service tariffs applicable
to all EP/RP allocations. Specifically, Service Tariffs EP-1 (EP) and NP-F1 (RP) are effective through June 30,
2013. Thereafter, Service Tariff No. WNY-1 is effective from July 1, 2013 until the expiration of the Customers’
Contracts for both EP and RP service. The proposed Contracts are attached as Exhibits ‘4-B-1’ and ‘4-B-2.’
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