July (pdf) - New York Power Authority

enefits from cash from operations. The Authority’s most recent actuarial evaluation was performed as of
January 1, 2010 and reported an actuarial accrued liability of $400 million which was funded with assets with
an actuarial value of $218 million resulting in the Authority’s retiree health plan to be 55% funded as of that
date. As of June 30, 2011, the value of the OPEB trust fund totaled [$255] million.
The OPEB trust assets and all income therefrom do not and will not form part of the Trust Estate, and
the 2011 Bonds are not and will not be payable from or secured by the OPEB trust.
For a further discussion of these matters, see the Authority’s financial statements for the year ended
December 31, 2010, Note 9 and Required Supplementary Information.
Hydroelectric Power Curtailment
Beginning in 1999 and continuing through 2003, below average water levels in the Great Lakes
reduced the amount of water available to generate power at the Authority’s Niagara and St. Lawrence-FDR
Projects, thereby requiring the periodic curtailment of electricity supplied to the Authority’s customers
from these Projects (see ‘‘PART 2—POWER SALES—St. Lawrence-FDR and Niagara’’). Flow
conditions thereafter improved and hydroelectric generation levels have since returned to near long-term
average, although such curtailment was required in two months in 2005. Since 2004, generation levels have
largely remained within approximately 5% of long-term average with 2011 generation levels again expected to
be near average levels. Below average water levels in the Great Lakes were experienced during the 1920s,
the 1930s, the 1960s, and the early 2000s.
Outstanding Indebtedness
As of June 30, 2011, the total outstanding indebtedness of the Authority consisting of Revenue Bonds
issued under the General Resolution Authorizing Revenue Obligations, adopted February 28, 1998, as
amended and supplemented (the ‘‘General Resolution’’), the Adjustable Rate Tender Notes
(‘‘ART Notes’’), the Authority’s Commercial Paper Notes (‘‘CP Notes’’), and the Extendible Municipal
Commercial Paper Notes (‘‘EMCP Notes’’) was $1,870,214,000. After the issuance of the Series 2011
Bonds and the application on ___________, 2011 of the proceeds thereof to the refunding of $77.215
million of the Series 2000 A Revenue Bonds, $41.720 million of the Series 2002 A Revenue Bonds, and
$175,000,000 of EMCP Notes and/or CP Notes, the Authority will have outstanding (i) senior indebtedness
of approximately $_____________, consisting of $_____________ in Revenue Bonds and $122,935,000 of ART
Notes, and (ii) approximately $___________ of Subordinated Indebtedness, as defined in the General
Resolution, consisting of the CP Notes and the EMCP Notes.
Additionally, for a discussion of certain interest rate and energy swap agreements that the Authority has
entered into and may enter into, see ‘‘PART 1—SECURITY FOR THE 2011 BONDS—Additional Debt
Issuance.’’
The Authority has entered into two revolving credit agreements with banks to provide liquidity support
for the Series 1-3 CP Notes and the ART Notes. The agreement relating to the CP Notes provides for the
Authority to borrow up to $550 million; the agreement terminates on January 20, 2014. The agreement
relating to the ART Notes provides for the Authority to borrow up to $122.935 million and such agreement
terminates on September 1, 2015. The Authority’s obligation to reimburse the respective banks for any
borrowing therefrom pursuant to the revolving credit agreements constitutes Parity Debt in the case of
borrowings relating to the ART Notes, and Subordinated Indebtedness in the case of borrowings relating to
the CP Notes. Any other payments under such revolving credit agreements will constitute Subordinated
Contract Obligations.
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