July (pdf) - New York Power Authority

to predict whether any such bills or other bills of a similar type which may be introduced in the future will
be enacted.
In addition, from time to time, legislation is enacted into New York law which purports to impose
financial and other obligations on the Authority, either individually or along with other public authorities or
governmental entities. The applicability of such provisions to the Authority would depend upon, among
other things, the nature of the obligations imposed and the applicability of the pledge of the State set forth in
Section 1011 of the Act to such provisions. There can be no assurance that in the case of each such
provision, the Authority will be immune from the financial obligations imposed by such provision. Examples
of such legislation affecting only the Authority include legislation, discussed above, relating to the
Authority’s voluntary contributions to the State, the Authority’s temporary transfer of funds to the State, the
Power for Jobs and Energy Cost Savings Benefits programs, and the establishment of the Western New
York Economic Development Fund Benefit program (see “PART 2―CERTAIN FINANCIAL AND
OPERATING MATTERS―Voluntary Contributions to the State, Temporary Transfer of Funds to State;
POWER SALES―Marketing Issues and Developments—Items (3), (5), (6)”). Set forth below are
descriptions of certain other legislative provisions, that are relevant to the Authority.
(1) Section 2975 of the New York Public Authorities Law establishes a Governmental Cost Recovery
System, pursuant to which certain public benefit corporations, defined as having three or more members
appointed by the Governor, are subjected to assessment for the costs of central governmental services
attributable to such public benefit corporations, pursuant to a statutory assessment methodology. Such a public
benefit corporation may, however, pursuant to Section 2975, opt to enter into an agreement with the State
Director of the Budget providing for alternative cost recovery to the State. Consistent with such alternative
agreement mechanism, the Authority in the past has voluntarily entered into agreements with the Division of
the Budget pursuant to which the Authority has made payments to the State relating to such cost recovery
assessments. In connection with the Authority’s temporary transfer of funds to the State in 2009 (see
“PART 2―CERTAIN FINANCIAL AND OPERATING MATTERS―Temporary Transfer of Funds to
State”), the Authority executed an alternative cost recovery agreement with the Director of the Budget whereby
the Authority was relieved of any obligation to make payments under Section 2975 from 2009 to 2017, up to a
maximum of $45 million.
(2) In 1995 and thereafter, legislation was enacted into New York law which authorizes the Authority to
utilize an aggregate of $60.3 million in POCR funds and $600,000 of other State funds, to be made available
to the Authority by the State pursuant to the legislation, for a variety of energy-related purposes with certain
funding limitations. The legislation also states that the Authority ‘‘shall transfer’’ equivalent amounts of
money to the State prior to dates specified in the legislation. The use of POCR funds is subject to
comprehensive Federal regulations and judicial orders, including restrictions on the type of projects which can
be financed with POCR funds, the use of funds recovered from such projects, and the use of interest and
income generated by such funds and projects. Pursuant to the legislation, the Authority is implementing
various energy services programs utilizing such appropriated funds, which programs have received all
necessary approvals (see ‘‘PART 2—ENERGY SERVICES’’). The Authority entered into agreements with
the State Division of the Budget obligating it to transfer $60.9 million to the State upon the transfer of the
$60.9 million in POCR and other State funds to the Authority. The disbursement of the appropriated funds to
the Authority, and the Authority’s transfer of $60.9 million to the State, has occurred. The appropriated funds
are being held in an escrow account for the approved purposes.
(3) The New York Executive Law was amended in 2004 to add a new Section 713, entitled
‘‘Protection of Critical Infrastructure including Energy Generating and Transmission Facilities.’’ The statute
provides, in relevant part, that the New York State Director of Public Security (‘‘Director of Public Security’’)
shall conduct a review and analysis of measures being taken by the New York Public Service Commission
(‘‘PSC’’) and any other agency or authority of the State or any political subdivision thereof and, to the extent
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