MINUTES OF THE REGULAR MEETINGOF THE

POWER AUTHORITY OF THE STATE OF NEW YORK

September 27, 2016

Table of Contents

Subject Page No. Exhibit

Introduction 2

1. Adoption of the September 27, 2016 Proposed 3Meeting Agenda

2. Motion to Conduct an Executive Session 4

3. Motion to Resume Meeting in Open Session 5

4. Consent Agenda: 6

a. Governance Matters 7

i. Minutes of the Regular Meeting held on July 26, 2016 7

b. Ratemaking 8

i. Increase in New York City Governmental Customer 8Fixed Costs Notice of Proposed Rulemaking

ii. Increase in Westchester County Governmental 12Customer Rates Notice of Proposed Rulemaking

c. Economic Development 15

i. Extension of the Economic Development Plan 15

ii. Modification of Western New York Hydropower, 18 4c ii-A - 4c ii-E;Preservation Power Hydropower and Recharge 4c ii-F-1 - 4c ii-F-7New York Power Agreements and Notice of 4c ii-GPublic Hearing

d. Power Allocations 26

i. Extension of Western New York Hydropower Allocations 26 4d i-A-1; 4d i-A-2

ii. Municipal and Rural Electric Cooperative Industrial 30Economic Development Program Allocation to theVillage of Westfield

e. Procurement (Services) Contracts 32

i. Procurement (Services) Contracts Business Units 32 4e i-A; 4e i-Band Facilities - Awards, Extensions and/or AdditionalFunding

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Subject Page No. Exhibit

ii. Procurement (Services) Contracts Professional 42Services Reliability Standards and ComplianceGroup Additional Funding Request

iii. Procurement (Services) Contract PV-20 Submarine 45Cable Replacement Project Request for AdditionalFunds and Change Order Authorization

iv. Procurement (Services) Contract Energy Efficiency 48Program Electric Vehicle Supply Equipment Contract Award

SENY 51v. Procurement (Services) Contract Southeast New 51

York - Small Clean Power Plants Operations andMaintenance Support Services Contract Award

f. Real Estate 53

i. Lease of Office Space 30 South Pearl Street, 53Albany, New York

ii. Acquisition of Real Property Emergency Energy 55 4f ii-AControl Center Town of New Hartford, OneidaCounty

iii. Acquisition of Real Property 102 Avenue of the 58 4f iii-AStars Town of Blenheim, Schoharie County

iv. Acquisition of Flooding Easement Nickerson Park 60 4f iv-ACampground Town of Gilboa, Schoharie County

g. Finance 62

i. New York Power Authority Other Post-Employment 62Benefit Funds: Selection of International Equity Value Investment Managers

h. Collective Bargaining 65

i. Successor Collective Bargaining Agreement between 65 4h i-ANYPA and the UWUA Local 1-2 Union

Resolution

Discussion Agenda: 68

5. Strategic Initiatives 68

a. President and Chief Executive Officer Report 68 5a-A

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Subject Page No. Exhibit

6. Enterprise Risk Management & Finance 70

a. Chief Risk Officer Update 70 6a-A

b. Financial Report 71 6b-A

7. Operations 74

a. Utility Operations Report 74 7a-A

b. Commercial Operations Report 76 7b-A

c. Information Technology Report 78

i. First 100-Day Plan Overview 78 7c i-A

d. Public and Regulatory Affairs Report 80

i. First 100-Day Plan Overview 80 7d i-A

e. Power Allocations 82

i. Western New York Hydropower Allocations 82 7e i-A; 7e i-A-1;Resolution 7e i-A-2;

7e i-B-1; 7e i-B-2

f. Economic Development 87

i. Western New York Workforce Training Center - 87Funding Request

Resolution

8. Governance and Board Matters 91

a. Finance Committee Report 91

b. Board Resolutions 92

i. James F. Pasquale 92

ii. Rocco Iannarelli 94

9. Next Meeting 96

Closing 97

September 27, 2016

Minutes of the Regular Meeting of the Power Authority of the State of New York held via videoconference at the Clarence D. Rappleyea Building, 123 Main Street, White Plains, New York atapproximately 10:00 a.m.

Members of the Board present were:

John R. Koelmel, ChairmanEugene L. Nicandri, Vice ChairmanDr. Anne M. Kress, TrusteeAnthony J. Picente, Jr., TrusteeTracy McKibben, Trustee

----------------------------------------------------------------------------------------------------------------------------------------------------Gil Quiniones President and Chief Executive OfficerJustin Driscoll Executive Vice President and General CounselJoseph Kessler Executive Vice President and Chief Operating OfficerRobert Lurie Executive Vice President and Chief Financial OfficerKen Lee Senior Vice President and Chief Information OfficerParija Soubhagya Senior Vice President and Chief Risk OfficerJennifer Faulkner Senior Vice President Internal AuditKimberly Harriman Senior Vice President - Corporate and Public AffairsJames Pasquale Senior Vice President Economic Development & Energy EfficiencyKristine Pizzo Senior Vice President Human ResourcesBradford Van Auken Senior Vice President Operations Support Services & Chief EngineerRocco Iannarelli Senior Vice President Corporate AffairsKaren Delince Vice President and Corporate SecretaryJohn Canale Vice President ProcurementThomas Concadoro Vice President and ControllerRuth Colon Vice President - Enterprise Shared ServicesKeith Hayes Vice President MarketingJoseph Leary Vice President Community and Government RelationsJenny Liu Vice President Energy Resource ManagementEthan Riegelhaupt Vice President Corporate CommunicationsScott Tetenman Vice President - FinanceCarol Geiger-Wank Chief of Staff to Chief Operations Officer and Director - LaborEnrico Montesa Director - Fuel Planning and OperationsSteven Gosset Manager - Media RelationsEgle Travis Manager - Pricing and Energy Market AnalysisSilvia Louie Senior Project Manager Executive Office/Public and Regulatory AffairsLorna Johnson Senior Associate Corporate SecretarySheila Baughman Senior Assistant Corporate SecretaryKatherine Rougeux Project Development Analyst IIPeter Prunty Director - InfrastructureJoseph Rivera Network Architect InfrastructureGlenn Martinez Senior Network Analyst InfrastructureStephen Juris Fried, Frank LLPJoshua Roth Baker Botts LLPJoseph Perry Baker Botts LLPLynn Neils Baker Botts LLP

Chairman Koelmel presided over the meeting. Corporate Secretary Delince kept the Minutes.

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Introduction

Chairman Koelmel welcomed the Trustees and staff members who were present at the meeting.

He said that the meeting had been duly noticed as required by the Open Meetings Law and called the

meeting to order pursuant to the Authoritys Bylaws, Article III, Section 3.

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1. Adoption of the September 27, 2016 Proposed Meeting Agenda

Upon motion made by Trustee McKibben and seconded by Trustee Kress, the meeting Agenda

was adopted.

Conflicts of Interest

The following Trustees declared conflicts of interest as indicated below and said they would not

participate in the discussion or vote as it relates to those matters.

Trustee Kress: Datrose and Express Scripts, Inc. (Item #4e i)

Trustee Picente: Emergency Energy Control Center - Town of New Hartford, Oneida County (Item #4f ii);

Chairman Koelmel, Vice Chairman Nicandri and Trustee McKibben declared no conflicts.

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2. Motion to Conduct an Executive Session

Mr. Chairman, I move that the Authority conduct an executive session to pursuant to the

Public Officers Law of the State of New York sections 105(a)(c) and (f) to discuss:

Matters related to a current investigation; The financial, credit or employment history of a particular person or corporation; Matters leading to the appointment, employment, promotion, demotion, discipline,

suspension, dismissal or removal of a particular person and corporation; and Matters which will imperil the public safety if disclosed.

Upon motion made by Vice Chairman Nicandri and seconded by Trustee Kress, an executivesession was held.

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3. Motion to Resume Meeting in Open Session

Mr. Chairman, I move to resume the meeting in Open Session. Upon motion made by Vice

Chairman Nicandri and seconded by Trustee Kress, the meeting resumed in open session.

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4. CONSENT AGENDA:

Upon motion made by Trustee Picente and seconded by Trustee McKibben, the Consent Agendawas approved.

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a. Governance Matters:

i. Approval of the Minutes

The Minutes of the Regular Meeting held on July 26, 2016 were unanimously adopted.

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b. Ratemaking:

i. Increase in New York City Governmental CustomerFixed Costs Notice of Proposed Rulemaking

The President and Chief Executive Officer submitted the following report:

SUMMARY

The Trustees are requested to authorize a Notice of Proposed Rulemaking (NOPR) to increasethe Fixed Costs component of the production rates by $16.6 million or 12.7%, excluding Astoria Energy II(AE II) plant expenses to be charged in 2017 to the New York City Governmental Customers(Customers). AE II plant expenses, although part of the Cost of Service (COS), are not subject to thisNOPR proceeding as recovery of such costs has been agreed to by contract. The proposal is based onAuthority staffs Preliminary 2017 COS.

In addition, the Trustees are requested to direct the Corporate Secretary to file the NOPR with theNew York State Department of State for publication in the New York State Register in accordance withthe requirements of the State Administrative Proce