July (pdf) - New York Power Authority

The Authority may issue additional Obligations under the General Resolution or additional
Subordinated Indebtedness, as defined in the General Resolution, under subordinate resolutions for any
purpose of the Authority authorized by the Act or other then-applicable State statutory provision. The
principal amount of the Obligations or Subordinated Indebtedness which may be issued under the General
Resolution or under subordinate resolutions, respectively, is not limited, and there is no debt service
coverage or historical or projected earnings test that must be satisfied as a precondition to any such issuance. If
Obligations are issued to finance a project (other than a Separately Financed Project as defined in the
General Resolution), then the revenues from such project would be part of the Trust Estate, as defined in the
General Resolution. The Authority may also determine to finance an additional project from internal
funds, from bank borrowings, from bonds, notes or other obligations issued pursuant to a resolution other than
the General Resolution, or from other sources; if such project qualifies as a Separately Financed Project,
as defined in the General Resolution, the revenues from such additional project would not be Revenues
under the General Resolution, and therefore not available to pay the 2011 Bonds. The Authority currently
does not have any Separately Financed Projects.
Voluntary Contributions to the State General Fund
Legislation enacted into law, as part of the 2000-2001 State budget, as amended up to the present time,
provides that the Authority ‘‘as deemed feasible and advisable by the trustees’’, is authorized to make
certain ‘‘voluntary contributions’’ into the ‘‘state treasury to the credit of the general fund,’’ in connection
with the Power for Jobs Program. Commencing with its first payment in 2002, the Authority has made such
voluntary contributions to the State totaling $469 million. In addition, the Authority has been authorized to
make certain voluntary contributions to the State that are unrelated to the Power for Jobs Program, and the
Authority has made $342 million of such voluntary contributions during the same period. Pursuant to
authorizing legislation enacted in March 2011, the Authority expects to consider in the first quarter of 2012 the
feasibility and advisability of (i) making an additional voluntary contribution of $6 million relating to the
Power for Jobs program and (ii) making an additional voluntary contribution of $60 million unrelated to the
Power for Jobs program.
On May 24, 2011, the Authority’s Trustees adopted a policy statement (“Policy Statement”) which relates
to, among other things, voluntary contributions, transfers, or other payments to the State by the Authority after
that date. The Policy Statement provides, among other things, that in deciding whether to make such
contributions, transfers, or payments, the Authority shall use as a reference point the maintenance of a debt
service coverage ratio of at least 2.0, in addition to making the other determinations required by the General
Resolution. The Policy Statement may at any time be modified or eliminated at the discretion of the
Authority’s Trustees. For additional information relating to voluntary contributions, see the Authority’s
financial statements for the year ended December 31, 2010, management’s discussion and analysis,
‘‘Economic Conditions”, and “PART 1―APPENDIX D―Litigation―Item (b).’’
Temporary Transfer of Funds to State
By budget legislation enacted in February 2009, the Authority was authorized to make certain
temporary asset transfers to the State of funds in reserves. Pursuant to the terms of a Memorandum of
Understanding dated February 2009 (“MOU”) between the State, acting by and through the Director of
the Budget of the State, and the Authority, the Authority agreed to transfer $215 million associated with
its spent nuclear fuel reserves and the MOU provides for the return of these funds to the Authority,
subject to appropriation by the Legislature and other conditions, at the earlier of the Authority’s payment
obligations related to such spent nuclear fuel or September 30, 2017. The MOU also provides for the
Authority to transfer $103 million of funds set aside for future construction projects, which amounts
would be returned to the Authority, subject to appropriation by the Legislature and other conditions, at the
earlier of when required for operating, capital or debt service obligations of the Authority or September
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