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PUBLIC POWER AGENCY MEETING MINUTES
March 14, 2007
Members Present: John Montone, Chairperson, Timothy C. Lattimore, William Graney, Mike Luksa, and Krste Biljanoski
Members Absent: Luke Rybarczyk, (out of town on business) Vijay Mital (called in Florida)
Staff Present: Andy Fusco, City Attorney, Michael Long, Anthony DeCaro and Mark Storrs
Two vacant positions
Meeting of the Public Power Agency of March 14, 2007 was called to order by Chairperson John Montone at 4:00 p.m. Motion made by Tim Lattimore to accept minutes of the February 28, 2007 meeting and seconded by Mike Luksa.
Under new business - we need to replace Mr. Buschman and Mr. DeOrio on this committee. The City Manager would like to appoint someone from the community, Tony and Mark work for the City and can attend the meetings and this will make this body bigger to help us to do the things as far as the hydros and methane. Denny Zack has submitted his Resume and it should be voted on next week at City Council. Denny stated that he knew someone that would be interested and will check with him and get back to the Chairman.
Went into the OCM-BOCES Energy Purchasing Service Agreement. The Chair, Tim Lattimore and Andy met regarding the agreement. Andy is convinced that current agreement at least for gas expires or will be able to be declared expired on May 1, 2007. There is nothing in the contract to the contrary and the resolution of Council annexed to the contract bound us only to May 1, 2007 on gas, did bind us for an addition three (3) years on electric, so argument could be made by BOCES at least on one of the two utilities they have a five year agreement. Chairman stated that a letter went out to Debra Ayers of BOCES inviting her to the next meeting on April 11, 2007, but we have to get a letter out to OCM-BOCES before March 30, 2007, did not know where the thirty (30) days clause is. Tim Lattimore stated that we
have to reserve the right - put them on notice. Andy stated that was the purpose of the March 6th letter. Chair stated that Constellation Energy is doing business with these people. They went out to bid and Constellation Energy bid on it, they sold them a bill of goods basically, the second sheet of the information that I handed out that is an example of some of the prices at the Wastewater Treatment Plant back in September it was $10 a decatherm then it jumped up to $14.23, even $15 at one time, no where in this contract does it say there is a locked in price, it is not locked in, they can charge anything they want, and keep in mind that is not the delivery charge, so on tope of that it is around $16 - $17. Right now the rate is $11.22 down at the Wastewater Treatment Plant it is a different price. Constellation does those prices and now obviously two different agreements, we only know of this one, don’t know of another one with
the Wastewater Treatment Plant, but they have the right to charge two different prices so he didn’t know if they are in default in any of this by doing the things that they are doing. Andy stated he would say they breached the contract. The contract is so terribly drawn as far as the obligations of any body. Chair stated that Blue Rock who was here at the last meeting they also bid on the OCM-BOCES. They were told by Constellation Energy OCM-BOCES does not know what they are doing and they are asking for something that we really shouldn’t give them. Blue Rock did not bid and Constellation ended up with this particular agreement and that is who is supplying the power to the City. Tim stated the more direct we can get to the supplier the cheaper the rate and the Chair said we want to be the OCM-BOCES part of this especially for our gas. We are paying 6.7 and we don’t know if that is changing, nowhere in the agreement does it
say it is locked in. We live with it until we start producing our own power, we can reduce the amount, but we need to make a decision on the gas. Get other proposals other than Blue Rock. Blue Rock was going to act as a load serving entity, they would do the bidding for us and take a percentage. We are the aggregators and we go out and tell Blue Rock to get us some gas prices and they go to NYSEG or whomever to get the lowest cost gas prices, they lock it in. Andy stated that was one of the two options that Blue Rock gave us, also said they could provide products and put their profit in as a markup. Can be an agent and deal or a supplier. Chair said the initial step was to clear up all these bills here; the gas alone is $1.1 million or something like that. It does figure out to be about $14 a decatherm every place and this is for the time period 2005-06. If you look at that $1.1 million at the end, if we were buying this
at $7 or $8 a decatherm, that figure would be under a million dollars. That is what we have to do before May 1st is get a bid out otherwise we will continue paying this. We had Blue Rock here, we are trying to make contact with a couple others, but we have to make a decision, do we want some body like Blue Rock to act as load serving entity, in other words, they do the work, they go out to bid for us, we have an agreement similar to a service agreement. Andy said that the commission should listen to at least one other proposal, we listened to Blue Rock, we listened to BOCES, let’s listen to one more and do so on April 11, which is the next meeting and make a decision in time for May 1st. The guy from Blue Rock knew what he was talking about and the Chairman has confidence in him, but Bill and Tim have to go back and sell the 3 other members of City Council on a concept, it would be a lot easier if you could say we interviewed 3
people and we considered BOCES, if they come, we have sent them a letter, we made the effort, we listened to Blue Rock and we listened to a third and we make a decision on April 11. Chair stated our problem is the timeline; we need to get them in here April 11th. Mike Long said that Blue Rock said they could do a short-term deal too. We may want to explore that possibility once we have our agent on board. Chair stated the more power we are producing say as a digester or these hydro projects utilizing these facilities the less power we are paying at 6 cents a kilo watt hour. Mike Luksa asked if we could resell the gas or is that a negotiation point. That is what we are going to look for through Blue Rock, I knew we could do it with electric, but I wasn’t sure about the gas.
Chair stated just the gas savings alone at the digester project is going to be an immense savings off this bill once it gets up and running, but we are about 18 months or 2 years away from that. The electric end of it for example if we sent power to the Fire House, Engine 3, $10,000 a year we can knock off. The idea is to reduce these costs once we are in business as the agency making power, making gas and all those things we will eventually replace all of this stuff on our own once we have that ability. We will be getting a proposal from Blue Rock and Mike Long said that Mike Mastroianni of Auburn has a similar company in Buffalo that does power aggregation. Chair thought it was Alliance Energy and suggested Mike call him. Andy said we have to take some action on May
1st, either renewal of the contract or not. If you make a decision by April 11, you will be in a position to have Council act on it on April 20. Chair stated as long as we have something in writing by April 30.
Tony DeCaro and Krste Biljanoski brought the committee up to date on the North Division Street hydro site and Mill Street hydro. A motion was made by Mike Luksa and seconded by Krste Biljanoski to get repairs done on Mill Street hydro. In the meantime we need to sit down and talk about finding out about these energy credits. Kamyar can help us lead us in the right direction to contact somebody that will take a commission off of it sellable bonds. Create some revenue coming in, as soon as this hydro is up and running we are making money off of it. Chair will contact NYPA as they looked at all these sites. Mike Long stated regarding Mike’s motion to put money in to look at Mill Street, we initially talked with NYPA about doing this as our overall energy project, so he will see
if that is still able to happen and if it doesn’t work we will bring it to Council. Chair asked does the money from the generating site go into the hydro budget? Mike Long stated it is an Enterprise Fund whatever is generated at the hydro site goes into the general fund budget as a hydro account. Chair suggested putting a motion out to put an RFP together for the Dunn & McCarthy site to request quotes to come in and bid on that property, Chair and Mike Long will work on the RFP.
Mike Long talked about the NYSERDA grant and $1 million that will be transferred to the community digester project. Question on the $891,000 that was secured by Sherwood Boehlert, we have an executed agreement for the amount of money and I contacted the Department of Energy and the money is in an account specifically for our project. Need to change the project description; they want to make sure that we have a hydrogen component.
Next meeting is set for Wednesday, April 11, 2007 at 4:00 p.m. Motion to adjourn by Krste Biljanoski, seconded by Bill Graney. Meeting adjourned at 5:15 p.m.
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