July (pdf) - New York Power Authority

Operating Fund
The General Resolution provides that the Authority shall pay into the Operating Fund all Revenues as
and when received. The Authority shall also pay into the Operating Fund such portion of the proceeds of any
Series of Obligations which may have been issued to pay Operating Expenses as shall be specified pursuant to
the Supplemental Resolution authorizing such Series. Amounts in the Operating Fund shall be paid out or
accumulated or withdrawn from time to time for the following purposes and, as of any time, in the following
order of priority: (a) payment of reasonable and necessary Operating Expenses or accumulation in the
Operating Fund as a reserve (i) for working capital, (ii) for such Operating Expenses the payment of which is
not immediately required, or (iii) deemed necessary or desirable by the Authority to comply with orders or
other rulings of an agency or regulatory body having lawful jurisdiction; (b) payment of, or
accumulation in the Operating Fund as a reserve for the payment of, interest on and the principal or
Redemption Price of the Obligations and Payment of Parity Debt, on a parity basis, on their respective due
dates or redemption date, as the case may be; (c) payment of principal of and interest on any Subordinated
Indebtedness or payment of amounts due under any Subordinated Contract Obligation; (d) withdrawal and
deposit in the Capital Fund; and (e) withdrawal for any lawful corporate purpose as determined by the
Authority, including but not limited to the purchase or redemption of Obligations or Subordinated
Indebtedness, provided, that prior to any withdrawal pursuant to this clause (e), the Authority shall have
determined, taking into account among other considerations, anticipated future receipts of Revenues or other
moneys constituting part of the Trust Estate, that the funds to be so withdrawn are not needed for any of the
purposes set forth in clauses (a), (b) or (c) herein. Amounts paid out, or withdrawn pursuant to clause (e)
shall be free and clear of the lien and pledge created by the General Resolution.
The Authority shall from time to time, and in all events prior to any withdrawal of moneys from the
Operating Fund pursuant to clause (e) of the preceding paragraph, determine (i) the amount, to be held as
a reserve in the Operating Fund, which in the judgment of the Authority is adequate for the purpose of
providing for the costs of emergency repairs or replacements essential to restore or prevent physical damage
to, and prevent loss of Revenues from, any Project and (ii) the amount, to be held as a reserve in the
Operating Fund, which in the judgment of the Authority is adequate to meet the costs of major renewals,
replacements, repairs, additions, betterments and improvements with respect to any Project necessary to
keep the same in operating condition or required by any governmental agency having jurisdiction over
such Project and to provide a reserve for the retirement from service, decommissioning or disposal of
facilities comprising either a Project or a part of a Project.
Amounts in the Operating Fund may in the discretion of the Authority be invested in Authorized
Investments. Earnings on moneys and investments in the Operating Fund shall be deposited in the
Operating Fund. The Authority may sell any such Authorized Investments at any time and the proceeds of
such sale shall be deposited in the Operating Fund.
The General Resolution provides that purchases of Obligations, 1985 Notes or Subordinated
Indebtedness from amounts in the Operating Fund shall be made at the direction of the Authority, with or
without advertisement and with or without notice to other holders of Obligations, 1985 Notes, or
Subordinated Indebtedness. In addition, any amounts set aside by the Authority in one or more reserve
accounts in the Operating Fund may be used by the Authority as determined by the Authority for the
purpose of paying all or a portion of the interest, principal or Redemption Price of Obligations and payment
of Parity Debt, on a parity basis.
(General Resolution, Sec. 503)
App. 1-9