NYPA Provides New York State With Improved Power Reliability and Lower Utility Bills in 2001.

Business and City Desk Editors

WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Jan. 17, 2002

The New York Power Authority (NYPA) made major strides in 2001 -- its 70th anniversary -- toward strengthening New York State's energy stability by adding new clean generating capacity downstate and innovative transmission-control equipment for delivering more electricity; continued allocation programs that have linked its lower cost electricity to some 420,000 jobs statewide, and energy efficiency measures that save public facilities millions of dollars a year; and took a key step in the relicensing of its St. Lawrence-Franklin D. Roosevelt hydroelectric project in Massena.

Those and other energy-related measures, under the direction of Gov. George E. Pataki, made significant contributions to the state's overall economy and environment, as NYPA responded to the changing needs of the state.

Immediately after the Sept. 11 attacks on the World Trade Center, several small natural gas-fueled turbine generators that NYPA had only recently installed in New York City were called on to generate power. The units were among 10 identical generators that NYPA had put into service by the summer, and their dispersal in four of the city's five boroughs was considered an asset following the attacks on the Twin Towers.

Completed in just 10 months, the new generators, plus another one on Long Island, added more than 440,000 (kw) of additional capacity. They were crucial in helping the city and the Island meet their peak electricity requirements on successive days in August, as blistering temperatures and humidity set new statewide demand records.

A Peak Load Management program sponsored by NYPA also helped by reducing New York City power usage on those days by up to 50,000 kw -- an amount equivalent to a small power plant.

In December, NYPA announced details of an ambitious program to offset emissions from other sources in those communities where the new turbine generators are located. The gas units are already equipped with advanced pollution-control and noise-abatement equipment costing more than $55 million. The $23 million offset program ensures there will be no overall increase of emissions, and air quality is expected to improve.

Pollution control systems on 1,000 school buses, and eight non-polluting fuel cells at New York City wastewater treatment plants are among the cornerstones of the emission offset program. (The plants will harness the gas byproduct of the wastewater treatment process to produce electricity, as is currently done by a NYPA-installed fuel cell at the Westchester County Wastewater Treatment Plant in Yonkers.)

The first benefits of the Power Authority's installation at its Marcy Substation near Utica of a $48 million dollar device known as the Convertible Static Compensator (CSC) occurred in the spring of 2001. Completion of the first phase of the project enabled NYPA to increase power flows by approximately 60,000 kw on a heavily congested transmission corridor between Utica and Albany. (One thousand kilowatts -- 1 megawatt -- is the typical amount of electricity used at a given time by approximately 800 homes.)

The second and final phase of the CSC -- co-funded by the Electric Power Research Institute and other utilities around the country -- is expected to be completed this year, allowing power to be routed away from heavily loaded lines to underutilized lines.

Various power allocation programs administered by the Power Authority continued to be instrumental in creating and protecting jobs around the state. By the end of 2001, nearly 420,000 jobs were linked to the lower cost power from these programs, including Governor Pataki's Power for Jobs program.

First introduced in late 1997 as a bridge to competition in the state's electric power industry, the Governor's program is now linked to more than 300,000 jobs at some 700 businesses and not-for-profit organizations. That far exceeds the initial projection of 40,000 jobs when the Governor signed the Power for Jobs legislation making 400,000 kw available during the program's first three years.

Subsequent legislation in 2000 provided for additional power under the program, with all of the available amounts fully allocated by NYPA in 2001.

The Power Authority's expenditures on energy efficiency measures for schools, hospitals, government buildings and other public facilities in 2001 exceeded $100 million, more than 2-1/2 times the total for 1994, the last year before Governor Pataki took office. Those efforts -- part of NYPA's Energy Services program -- included installation of high-efficiency lighting and new heating, ventilating and air-conditioning systems. Other program elements featured new energy-efficient refrigerators for New York City public housing residents and replacement of polluting coal-fired boilers with clean oil and gas furnaces at schools in New York City, Buffalo and on Long Island.

At year's end, the improvements under the Energy Services program were saving public facilities more than $74 million a year in electricity and fuel costs, lessening the burden on taxpayers, while providing additional funding for their essential services. The resulting reduction in electricity use from the various energy efficiency measures helped avoid some 511,000 tons of greenhouse gas emissions during the year.

In October, the Power Authority submitted its application to the Federal Energy Regulatory Commission (FERC) for relicensing the St. Lawrence-FDR Project, whose current operating license expires in 2003. The application followed agreement on a relicensing plan stemming from a cooperative consultation process with Northern New York community leaders. It included the return of nearly 1,500 acres of surplus project land to the tax rolls, a community enhancement fund to give localities and school districts at least $115 million, and improvements to recreational facilities.

FERC's approval of NYPA's application would provide a new 50-year operating license for the 900,000-kw hydroelectric project, which first produced power in 1958.

First steps toward the relicensing of NYPA's Niagara Project in Lewiston also took place in 2001, with the Power Authority choosing an inclusive process similar to the one in Northern New York. The license for the 2,400,000 kw hydro project expires in 2007.

The Power Authority proceeded with a multi-year Life Extension and Modernization program at St. Lawrence-FDR in which the project's 16 turbine generators will be replaced by more efficient units. The first of the new turbine generators is expected to be in operation by early spring under a schedule providing for three new installations every two years to minimize any power production losses.

A similar upgrade program remained in full swing at the Niagara Project, with 8 of 13 turbine generators now replaced. The remaining work is scheduled to be completed by 2006.

In other initiatives and developments involving the Power Authority in 2001:

-- Governor Pataki signed legislation directing NYPA to provide up to 80,000
kilowatts of lower cost electricity to businesses displaced by the attacks on
the World Trade Center. Companies relocating to new downtown Manhattan
locations are eligible.

-- Governor Pataki nominated NYPA Chairman Joseph J. Seymour as executive
director of the Port Authority of New York and New Jersey in December to
succeed Neil Levin, who lost his life in the World Trade Center disaster.
Seymour stepped down as Power Authority chairman in January.

-- NYPA joined forces with the Ford Motor Co. and other state and federal
agencies to launch the nation's largest electric vehicle (EV) station-car
demonstration program for railroad commuters in the New York City Metropolitan
area. Some 100 commuters will lease Ford's new Th!nk City EV -- a two passenger
vehicle with a driving range of about 50 miles between battery recharging -- to
get to their commuter train stations.

-- Two administrative law judges for the New York State Board on Electric
Generation Siting and the Environment recommended approval of NYPA's
application to build a 500,000-kilowatt natural gas-fueled plant in Queens.

-- The Power Authority commenced an excavation and construction project to
prevent any potential erosion of Brown Mountain in Schoharie County where the
Power Authority rotates water between an upper and lower reservoir to generate
power at its Blenheim-Gilboa Pumped Storage Project. The stabilization work is
expected to be completed by this spring.

-- The Power Authority agreed to sell $191 million in bonds toward completion
of debt refinancing.