July (pdf) - New York Power Authority

Con Edison
By order issued March 26, 2010, the PSC approved a settlement agreement, materially as submitted,
by Con Edison and other parties, including the Authority, pertaining to Con Edison’s delivery charges for
the three-year period ending March 31, 2013 (‘‘Joint Proposal’’). Under the Joint Proposal, Con Edison’s
delivery revenues will increase by $420.4 million in each of the three rate years. The overall bill impact
on Con Edison customers is an increase of approximately 3.6% in each year. The Authority’s SENY
Governmental and EDP customer class rates were assigned certain cost of service deficiency surcharges
totaling $25.2 million over the three-year period which were significantly less than the $43.2 million
proposed by Con Edison. Under the rates approved by the PSC, the Authority’s customers generally will
continue to be exempt from paying any stranded costs of Con Edison.
NYSEG
By order issued September 21, 2010, the PSC approved a settlement agreement governing NYSEG’s
rates through December 31, 2013. Most of the Authority’s EP customers served by NYSEG are
grandfathered into certain rates through 2013, and RP and EDP customers receiving service under a 2007
agreement will receive a 1.3% decrease, a 2.1% increase, and a 2.6% increase, respectively, during the
three rate years of 2011-2013. Under previous agreements approved by the PSC, the Authority’s existing
allocations and new allocations up to 100 MW have been exempted from stranded cost recovery, and
those agreements are not disturbed by the PSC’s September 2010 order.
New York City and Long Island Local Reliability Rules
The NYISO has established local reliability rules for New York City and Long Island, New York, that
require entities serving load in these areas to have at least 81% and 101.5% of the capacity necessary to
service such load located in New York City and on Long Island, respectively. Through a combination of
existing generation, capacity purchases and other arrangements, the Authority met the NYISO’s capacity
requirements for the Summer 2010 Capability Period and expects to meet through these means future
capacity requirements.
Environmental
Electric utilities are subject to continuing environmental regulation. Federal, state and local
standards and procedures which regulate the environmental impact of electric utilities are subject to
change. These changes may arise from continuing legislative, regulatory and judicial action regarding such
standards and procedures. Consequently, there is no assurance that the Authority’s facilities will remain
subject to the regulations currently in effect, will always be in compliance with future regulations, or will
always be able to obtain all required operating permits. An inability to comply with environmental
standards could result in substantial additional capital expenditures to comply, reduced operating levels or
the complete shutdown of individual electric generating units not in compliance, and an adverse impact
on Authority revenues.
On July 6, 2005, the U.S. Fish and Wildlife Service (‘‘FWS’’) initiated a status review under the
Endangered Species Act (16 U.S.C. 1531 et seq.) to determine if listing the American eel as threatened or
endangered is warranted. American eels are a fish species that migrate between freshwater and the ocean,
and their wide range includes the Atlantic seaboard of the United States and Canada and the Great Lakes’
drainages. In findings issued February 2, 2007, the FWS determined that such a listing is not warranted.
However, in April 2010, the FWS was again petitioned to list the American eel as threatened or endangered
and a preliminary determination to conduct another full review is pending before the FWS. In the event the
FWS were to determine in the future to list the American eel as threatened or endangered, such a determination
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