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NYPA Customer ENERGY SOLUTIONS Developing the services side of the business

NYPA Customer ENERGY SOLUTIONS Developing the services side of the business. Multiple Intervenors Annual Meeting - October 8, 2014 Michael Huvane – Vice President, Marketing Kristin Barbato – Vice President, Customer Energy Solutions. NYPA Background.

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NYPA Customer ENERGY SOLUTIONS Developing the services side of the business

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  1. NYPA Customer ENERGY SOLUTIONSDeveloping the services side of the business Multiple Intervenors Annual Meeting - October 8, 2014 Michael Huvane – Vice President, Marketing Kristin Barbato – Vice President, Customer Energy Solutions

  2. NYPA Background Largest state public power organization in the U.S. Public authority of the State of New York Owns and operates 16 power plants Operates more than 1,400 circuit-miles of the state’s transmission system Does not use any tax revenues or state credits One of New York State’s valuable partners in economic development

  3. NYPA Organizational Structure Energy Efficiency Customer Energy Solutions Economic Development Account Management Power Contracts Pricing Load Forecasting Tariff Administration

  4. ReCharge New York • Governor Cuomo’s statewide economic development electric power program • 910 Megawatts (MW) • 50% NYPA hydro / 50% market power • Competitive application process: Focus on job creation or retention for existing, expanding or new businesses • At least 200 MW for attracting new businesses to NYS or the expansion of existing businesses and up to 100 MW for small businesses and not-for-profits • Long-term contracts up to 7 years

  5. ReCharge New York

  6. Western NY (WNY) Hydropower Programs • Low cost power available to facilities located within a 30-mile radius of NYPA’s Niagara Power Project • Consists of 445 MW of Replacement Power (RP) and 250 MW of Expansion Power (EP), with 20 MW of EP available to businesses located in Chautauqua County • Awarded on a competitive basis to businesses creating new jobs, expanding or building new facilities

  7. Western NY Hydropower Programs

  8. Western New York Power Proceeds Act • Signed into law by Governor Cuomo in 2012 • Created Western NY Power Proceeds Allocation Board • Consists of 5 members • Solicits and reviews applications • Makes recommendations for awards to the NYPA Trustees • Established Western NY Economic Development Fund

  9. WNY Economic Development Fund Net earnings from the sale of unutilized Expansion and Replacement power are accrued and deposited into the WNY Economic Development Fund (WNYEDF) A minimum of 15% of the Fund must go towards energy-related projects

  10. WNY Economic Development Fund

  11. Preservation Power • Low cost power from NYPA’s St. Lawrence-FDR Power Project • Available to eligible businesses in Franklin, Jefferson and St. Lawrence Counties • Awarded to businesses that want to expand and to new businesses that would like to locate in the region.

  12. Preservation Power

  13. North Country Economic Development Fund (NCEDF) • Loan fund created from $10 million deposit by Alcoa under terms of their long-term agreement with NYPA for the sale of hydropower. • For economic development in the 7 North Country counties as well as Herkimer County and the Akwesasne Mohawk Reservation

  14. NYPA’s Customer Energy Solutions The Challenge The Opportunity The Vision The Approach Key Next Steps

  15. The Challenge • General • Customers are seeking cost savings • Capital projects are their top priority • However, they’re interested in a wide range of services • Customers desire ease of use, responsiveness, and technical capability • Specific to NYPA • Customers are confused about NYPA’s offerings • Customers view NYPA’s processes as lengthy and bureaucratic • Customers perceive NYPA’s pricing of capital projects as more expensive than average “Setting up a new vendor is a complicated process, so if we could buy multiple services from NYPA that would make things easier. We’ve been pleased with NYPA services thus far, so we would expect these other services to be at that high level as well.” Source: Market Intelligence Report conducted for NYPA, July and August, 2014

  16. The Opportunity • Customers view NYPA as trustworthy, responsive, and knowledgeable • NYPA’s capital project implementation abilities match the needs of customers • NYPA’s ability to provide easy access to multiple vendors matches customers’ desire for a wide range of services • Customers are open to partnering with NYPA on new energy projects • NYPA can address customers’ concerns by realigning its service functions and processes, and marketing its offerings more clearly “This ‘economic potential’ is valued at $100.9 billion in net benefits (in 2012 dollars). The ‘achievable potential’ (in New York State), a subset of the economic potential, is valued at $30 billion in net benefits (in 2012 dollars). ‘Achievable potential’ represents the cost effective energy efficiency potential given current market barriers related to technologies, spending, energy efficiency goals, and policies.” Source: Market Intelligence Report conducted for NYPA, July and August, 2014

  17. The Vision • Customer Energy Solutions – Start up! • Goals • Build the “demand” side of NYPA’s business to be on par with the “supply” side of NYPA’s business • Become and remain our customers’ trusted energy advisor • Serve as a marketplace for accessing energy services • Internally coordinate and externally present “one NYPA” with fully integrated service offerings • Proactively address the energy needs of our customers • Recover costs on a net CES basis • Core Ideology NYPA will deliver results, value, and satisfaction for customers

  18. The Approach: Customer’s Future View of NYPA Cost Recovery Energy Services & Solutions Advisory / Operational Fees Data Analytics Planning Engineering Environmental& Regulatory Management & Operations Capital Investment Financing Advanced Infrastructure Efficiency Distributed Generation Traditional Utility Tariffs Generation, Transmission, & Supply

  19. The Approach: NYPA’s Internal “Supply Chain” Functions

  20. The Approach: Customer Segmentation

  21. The Approach: Priority Service & Customer Matches More Assessments & Projects for State & Local Segments Assessments & Projects for Commercial, Industrial, & NFP Segments Extensive Experience, Resources Deepen Relationships Moderate Resources, Experience Gain Experience Service Readiness Limited Resources, Experience More Assessments & Projects for Public School Segment Operations for State & Local Segments No Resources, Experience Not a Current Customer Supply-Only Customer Limited Service Customer Extensive Service Customer Customer Relationship

  22. Key Next Steps • BusinessPlan integrates CES functions with current and future programs / initiatives • Other Strategic Initiatives • State Policy – Reforming the Energy Vision (REV) • Customer Programs (EE INC, K-Solar, BuildSmart NY, NY Energy Manager) • Begin CES functional alignment with customer engagement • Establish the near-term and long-term budget to support services expansion

  23. Questions?

  24. Thank you… Michael Huvane New York Power Authority (914) 390-8117 Michael.Huvane@nypa.gov Kristin Barbato New York Power Authority (914) 390-8252 Kristin.Barbato@nypa.gov

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