July (pdf) - New York Power Authority

provided from the sale of the Authority’s Commercial Paper Notes and from internally generated funds.
Except for certain limited energy audit costs, the Authority expects to recover its expenditures on these
programs, including its financing costs, from the participants in these programs and/or, for certain of these
expenditures which have been incurred, those customer classes receiving benefit from the programs, over
periods not exceeding ten years, except for certain projects meeting specified criteria and implemented after
April 1, 2002 which may have recovery periods extending up to 20 years. The Authority’s energy services
programs generally provide funding for, among other things, high efficiency lighting technology conversions,
high efficiency heating, ventilating and air conditioning systems and controls, boiler conversions, replacement
of inefficient refrigerators with energy efficient units in public housing projects, distributed generation
technologies and clean energy technologies, and installation of non-electric energy saving measures.
Participants in these programs include departments, agencies or other instrumentalities of the State, the
Authority’s SENY public customers, public school districts or boards and community colleges located
throughout New York State, county and municipal entities with facilities located throughout New York State,
certain not-for-profit entities, and the Authority’s municipal and rural electric cooperative customers.
Legislation enacted in September 2009 enhances the Authority’s authority to provide and finance energy
services, including the issuance of bonds for that purpose, and also explicitly authorizes the Authority to
provide energy services to virtually all of its commercial and industrial customers. By legislation enacted
earlier, the Authority also was explicitly authorized to provide energy services to public and non-public
elementary and secondary schools and specified military establishments in New York and to finance and
administer programs to replace inefficient refrigerators with energy efficient units in certain public and
private multiple dwelling buildings.
As of June 30, 2011, the Authority had outstanding aggregate expenditures of $[373] million
(excluding POCR funds, discussed below) for these programs and projects associated with POCR funding,
discussed below, and expects to spend an additional $1.05 billion for these programs and projects over the
period 2011-2015 (see ‘‘PART 2—CERTAIN FINANCIAL AND OPERATING MATTERS—Projected
Capital and Financing Requirements’’).
The Authority has also established a variety of programs funded by available petroleum overcharge
restitution (‘‘POCR’’) funds and, to a lesser extent, other State funds (see ‘‘PART 2— LEGISLATION
AFFECTING THE AUTHORITY’’), with authorized funding of $60.9 million for programs. These programs
primarily include grants for energy services projects throughout New York State. The Authority is statutorily
authorized to utilize its internally generated funds and the proceeds of Authority debt to finance energy
service projects receiving POCR financing.
The New York State Clean Water/Clean Air Bond Act of 1996 (the ‘‘1996 Bond Act’’) allocated to the
Authority $125 million of 1996 Bond Act proceeds to undertake the implementation of Clean Air for Schools
projects for elementary, middle and secondary schools, which funds have been received. These projects are
designed to improve air quality for schools, including, but not limited to, the replacement of coal-fired and
certain other furnaces and heating systems with furnaces and systems fueled by oil or gas. The Authority
anticipates that the funding for the projects will allow the conversion of 80 schools, of which 76 have
been completed. The conversion program is scheduled to be completed in 2013.
Funds received by the Authority under the 1996 Bond Act and POCR funds received by the
Authority are not available to pay debt service on the Authority’s debt obligations.
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