July (pdf) - New York Power Authority

Enterprise Risk management program, based on the Committee of Sponsoring Organizations of the
Treadway Commission Enterprise Risk Management framework, sets forth the Authority’s philosophy
and structure for effective identification, assessment, reporting and management of its strategic,
operational, marketing, legal, compliance, regulatory, and financial risks.
Security Matters
In the wake of the September 11, 2001 attacks, electric utilities were compelled to move beyond the
traditional concept of emergency management and prepare to respond to the unique threats associated with
terrorism. Consequently, the Authority pursued comprehensive efforts to evaluate the vulnerability of its
physical assets and has revised plans, protocols and procedures to address the wider range of potential
threats. The Authority has made substantial capital expenditures to enhance the security of all of its power
projects, office facilities and personnel. The Authority has also implemented a system-wide security
awareness training program for all Authority personnel. The Authority has worked to enhance security by
coordinating closely with state and local law enforcement officials for support, expanding the Authority’s
support network to include national defense and homeland security personnel, and bringing the National
Guard and other military officials to its facilities to review operations and facilitate continued cooperative
initiatives. In February 2010, the Authority established the position of Vice President-Emergency Planning and
Business Continuity, reporting to the President and Chief Executive Officer, with responsibility for
development, management, implementation, and integration of emergency management and business
continuity plans across the business units within the Authority.
Nuclear Plant Sale Matters
Pursuant to a purchase and sale agreement between the Authority and two subsidiaries of Entergy
Corporation (the ‘‘Entergy Subsidiaries’’), on November 21, 2000, the Authority sold the Indian Point 3 and
FitzPatrick nuclear plants to the Entergy Subsidiaries for cash and non-interest bearing notes totaling $967
million (subsequently reduced by closing adjustments to $956 million) maturing over a 15-year period.
For a further discussion of matters relating to this sale, see the Authority’s financial statements for the year
ended December 31, 2010, Note 11.
NEW YORK INDEPENDENT SYSTEM OPERATOR
New York Independent System Operator Arrangement
In 1999, two not-for-profit organizations, the NYISO and the New York State Reliability Council
(‘‘Reliability Council’’), were established. The mission of the NYISO is to assure the reliable, safe and
efficient operation of the State’s major transmission system, to provide open-access non-discriminatory
transmission services and to administer an open, competitive and non-discriminatory wholesale market for
electricity in New York State. The mission of the Reliability Council is to promote and preserve the reliability
of electric service on the NYISO’s system by developing, maintaining, and, from time to time, updating the
reliability rules relating to the transmission system (the ‘‘Reliability Rules’’), to be complied with by the
NYISO and all entities engaging in electric transmission, ancillary services, energy and capacity
transactions. The Authority, each of the current investor-owned utilities (‘‘IOUs’’) and LIPA are among the
many ‘‘Market Participants’’ (which includes any person engaged in the wholesale sale, transmission or
purchase of electric energy) in the NYISO and members of the Reliability Council.
In addition to the IOUs, LIPA and the Authority, any Market Participant, including organizations
representing residential and/or small commercial consumers and environmental organizations, may be
members of the NYISO. The NYISO is governed by a Board of Directors consisting of the President of
the NYISO and nine individuals. No member of the Board of Directors is able to own shares in or have a
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