July (pdf) - New York Power Authority

Service under the contract with LIPA commenced on April 1, 1989 and will terminate April 30, 2015,
unless terminated by LIPA upon not less than 6 months advance notice. The Authority and LIPA have
executed an agreement under which LIPA transferred its contractual rights to the Authority in return for
the Authority agreeing to bid the full Blenheim-Gilboa Project generation into the NYISO markets or enter
into other marketing arrangements relating to such generation and to make payment to LIPA based on an
apportionment of the resultant net revenues on the basis of LIPA’s contract demand. This agreement is
currently being administered on a month-to-month basis and an agreement to extend it through June 30,
2012 is expected to be executed later in 2011. Unless other arrangements are negotiated, the original
Blenheim-Gilboa LIPA contract will again become effective.
Sales of Purchased Power and Energy for Industrial Power
A total of eight contracts are in effect with five high-load factor industries, one business under
legislation enacted into New York law in 1984, and the DOE at Upton, New York, which provide for the sale
of approximately 173 MW of purchased power and energy. The DOE contract is currently subject to yearly
Federal appropriations. A modification to the contract was executed in late 2010, extending the term through
December 31, 2020, with a provision allowing for a renewal of an additional five years. The contract
extension provides for market prices to be flowed through to the DOE. Three of the remaining contracts
have termination dates of June 30, 2012, while the others do not have specific termination dates, and may be
terminated by either party upon contractual notice. All of these contracts, with the exception of the DOE
contract, are receiving the ECS Benefits discussed above (See ‘‘PART 2―POWER SALES―Marketing
Issues and Developments—Item (3)’’).
A total of approximately 153 MW of economic development power (‘‘EDP’’) being supplied from
purchased power and energy has been allocated to businesses recommended for allocation by EDPAB. These
EDP contracts are receiving ECS Benefits and such contracts have provisions which allow for customer
termination on written notice of one year or 90 days, depending upon the contract. The EDPAB legislation
provides that power formerly supplied from the FitzPatrick nuclear plant which was voluntarily relinquished
by businesses, designated as EDP, be made available for allocation to or for businesses recommended by
EDPAB. EDPAB must evaluate all applications for the allocation of EDP in accordance with the criteria
set forth in the statute and recommend to the Authority such applications which best meet the criteria,
with such terms and conditions as it deems appropriate. If the Authority declines to make power available to
or for a business whose allocation has been so recommended, it must specify its reasons in writing. At least
one-half of all allocations must be recommended for applicants located in southeastern New York.
The legislation also directs the Authority ‘‘to identify the net revenues produced by the sale of
expansion power and further to identify an amount of the net revenues from the sale of expansion power which
shall be used solely for industrial incentive awards.’’ The statute provides that ‘‘[n]otwithstanding other
lawful purposes for which such revenues may be used, it shall be the preferred purpose of the [A]uthority
to make available all such net revenues for industrial incentive awards.’’ Industrial incentive awards
(“Awards”) are to be made in accordance with an economic development plan proposed by the Authority and
approved by EDPAB.
The current process provides for the Authority to authorize Awards to individual manufacturing
companies that provide explicit data demonstrating their risk of closure or relocation out of New York
State. The form of the Award generally will be a ¢/kWh price discount on an agreed-to level of electricity
consumption for one year. Awards would normally be for one year, with the ability to renew for one or
two additional years provided the company continues to meet an agreed-to job commitment for New
York. Additionally, participating companies may opt out should any new long-term economic
development program be approved by the State that offers similar or greater value. EP net revenues for
2009 and 2010 are $7.6 million and $6.4 million, respectively. As of June 2011, ten customers had been
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