July (pdf) - New York Power Authority

withdrawn by the Authority on August 1, 2011. On June 29, 2011, the Authority’s Trustees authorized
the use of revenues from the sales of such power into the wholesale market or, as necessary, internal
funds to fund the residential consumer discount program for its first six months.
(5) Chapter 436 of the Laws of 2010 established a Western New York Economic Development Fund
Benefit program and authorized the Authority to fund the program from net earnings from the Authority’s
sale of unallocated, relinquished, and withdrawn Expansion Power and Replacement Power into the
wholesale market. Net earnings are defined as any excess revenues earned from such power allocated to
the wholesale market over the revenues that would have been received had the power been sold at the
Expansion Power and Replacement Power rates. Proceeds from the fund may be used to support eligible
projects undertaken within a 30-mile radius of the Niagara Project that qualify under applicable criteria.
The law authorizes the Authority to administer this new program with assistance from public and private
entities. Authority revenues for the fund could range between [$2] million and [$10] million per year.
(6) In 1997 and subsequent years, legislation was enacted into New York law which authorized the
Power for Jobs program (the “PFJ Program”) to make available low-cost electric power to businesses,
small businesses, and not-for-profit organizations. Under the PFJ Program, EDPAB recommends for
Authority approval allocations to eligible recipients of power from power purchased by the Authority
through a competitive procurement process and power from other sources. The Authority also is authorized
to provide power through an alternate method to the competitive procurement process if the cost of the power
through the alternate method is lower than the cost of power available through a competitive procurement
process, provided that the use of power from Authority sources does not reduce the availability of, or cause
an increase in the price of, power provided by the Authority for any other program. If the Authority decides to
not make power available to an entity whose allocation has been recommended by EDPAB, the Authority
must explain the reasons for such denial. The PFJ Program power is sold to the local utilities of the eligible
recipients pursuant to sale for resale agreements at rates which are based on the cost of the competitive
procurement (or alternate acquisition) power plus a charge for the transmission of such power.
In 2004, legislation was enacted into law which amended the PFJ Program in regard to contracts of
certain customers. Under the amendment, certain contracts terminating in 2004 and 2005 could be
extended by the affected customer, or the customer could opt for ‘‘Power for Jobs electricity savings
reimbursements’’ (“PFJ Reimbursements”) from the Authority. Generally, the amount of such PFJ
Reimbursements for a particular customer is based on a comparison of the current cost of electricity to
such customer with the cost of electricity under the prior Power for Jobs contract during a comparable
period. Thereafter, the PFJ Program has been extended numerous times and pursuant to the legislation
establishing the RNYPP, discussed in Item (4) above, the PFJ Program will end on June 30, 2012. The
Authority approved PFJ Reimbursements totaling $241 million for the years 2005-2010 and expects such
payments will not exceed $50 million for 2011. See ‘‘PART 2—CERTAIN FINANCIAL AND
OPERATING MATTERS―Voluntary Contributions to the State General Fund’’ for related information on
the PFJ Program involving voluntary contributions to the State.
(7) To meet energy needs of its NYC Governmental Customers, the Authority has entered into (i)
two energy supply contracts with one entity to supply an aggregate of 200 MW of energy for the period
January 1, 2009-September 28, 2013; and (ii) contracts for differences with counterparties which will
effectively result in the supply at specified prices of 500 MWs for the period 2011-2012 and 200 MW for
the period 2013-2014. The costs for these purchases are recovered from the NYC Governmental Customers.
(8) The Authority, in November 2007, issued a nonbinding request for proposals (“RFP”) for up to 500
MW of in-city unforced capacity and optional energy to serve the needs of its NYC Governmental
Customers. In April 2008, the Authority’s Trustees authorized negotiation of a long-term electricity supply
contract with Astoria Energy II LLC for the purchase of the output of a new power plant (the “Astoria Energy
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