July (pdf) - New York Power Authority

discussion does not purport to be comprehensive or definitive, and these matters are subject to change
subsequent to the date hereof. Extensive information on the electric utility industry is, and will be,
available from the legislative and regulatory bodies and other sources in the public domain, and potential
purchasers of the 2011 Bonds should obtain and review such information.
REGULATION
The operations of the Authority are subject to regulation or review by various State and federal agencies,
discussions of which appear in various segments throughout this Official Statement. The principal
agencies having a regulatory impact on, or a monitoring function over, the Authority and the conduct of its
activities, are as follows:
New York State
Public Service Commission and Siting Board. The PSC is the principal agency in the State regulating the
generation, transmission and sale of electric power and energy. It has no jurisdiction over rates for power
generated or transmitted by the Authority but does regulate the rates of New York State’s investor-owned
utilities and certain municipal systems to which the Authority sells power. The PSC is empowered by
the Public Service Law to issue Certificates of Environmental Compatibility and Public Need prior to the
construction of power transmission lines of certain capacities and lengths.
On June 23, 2011, the State Legislature passed a bill establishing a new Article X of the Public
Service Law governing the siting and construction of virtually all new electric generating plants of 25
MW or more in New York State including such facilities of the Authority [Governor’s approval]. An
earlier version of Article X expired on January 1, 2003. Under the bill, a Siting Board, chaired by the
chair of the PSC and comprised of four other state agency officials and two ad hoc members, is
empowered to issue Certificates of Environmental Compatibility and Public Need authorizing
construction of such plants. The Siting Board is not authorized to accept applications under the new
Article X until the DEC has issued certain regulations involving environmental justice and air quality
issues.
Department of Environmental Conservation. The DEC administers and manages the State program for
oil and chemical containment and spill prevention and provides for abatement of water, land and air pollution.
Pursuant to State and federal laws, the DEC regulates the transport, treatment and disposal of hazardous and
toxic wastes. In addition, the DEC regulates the use of tidal and freshwater wetlands and flood plains. Before
any Federal license or permit can be issued for any activity involving a discharge into navigable waters, the
DEC must certify that the discharge will comply with the State water quality standards, or otherwise
waive certification. Certain aspects of the DEC’s regulatory authority over pollutant discharge permits, air
quality and hazardous waste regulation arise from delegation of such authority to the State by federal
legislation.
New York State Comptroller. Pursuant to legislation enacted in 1989, the Office of the State
Comptroller (the “OSC”) is required to undertake a “program, financial and operations” audit of the
Authority at least once every five years, and the OSC periodically conducts other audits as well. In March
2011, the OSC commenced its most recent ‘‘program, financial and operations audit’’ of the Authority by
stating that it would audit the Authority’s consulting and personal services contracts, cost of debt, and
discretionary spending. The OSC’s report is expected to be issued in the third quarter of 2011.
In January 2010, the OSC commenced an audit of the Authority’s controls over overtime for the
period January 1, 2007 to April 13, 2010 to determine whether overtime hours were: 1) necessary, 2)
distributed equitably among employees, and 3) actually worked. The OSC’s July 2010 report was
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