Purpose

To determine the extent of implementation of the 12 recommendations included in our initial report, Selected Management and Operations Practices (2015-S-20).

Background

On April 14, 2011, the Governor of New York signed into law the ReCharge New York (RNY) power program as part of Chapter 60 (part CC) of the Laws of 2011 (Law). RNY power is to be allocated to businesses and not-for-profits that commit to retain or increase New York State jobs and agree to make capital investments in their businesses in accordance with legislative guidelines. RNY makes available 910 megawatts (MW) of economic development power, 50 percent to be purchased by the New York Power Authority (NYPA) on the open market and 50 percent from its own hydropower.

RNY power is then officially allocated by the action of NYPA's Board of Trustees. Section 2896 of the Public Authorities Law requires NYPA to prepare a report, at least annually, listing all personal property valued in excess of $5,000 disposed of during the reporting period. For the calendar year ended December 31, 2016, NYPA reported $1.6 million in personal property sales. NYPA began energy efficiency programs for its government customers in New York City and Westchester County in 1990. The programs were expanded to State-operated facilities in 1991, Long Island public schools in 1992, community colleges statewide in 1993, and to county and municipal governments in 1994. As of November 28, 2017, NYPA reportedly financed a total $2.1 billion in Energy Efficiency (EE) projects that produced first year savings of $97.3 million.

Our prior audit, issued on August 1, 2016, found that:

• NYPA reported certain information to the public that was incomplete and therefore could lead the public to draw incorrect conclusions about the program. For example, NYPA publicly reports power allocations that it offers to RNY applicants, but not the power they actually accept. NYPA also reported job commitments and included businesses that were awarded a power allocation, but were in pending status because they did not sign a contract. In some cases, these businesses later declined the contracts. In June 2015, this resulted in an overstatement of job commitments reported by 29,795, or 7.7 percent.
• NYPA sold scrap metal and plant equipment without appropriate controls and accountability, and it had poor controls over the disposition of fleet vehicles.
• NYPA's claimed energy efficiency savings were not always properly supported.

Key Finding

We found that officials have made progress in addressing the issues identified in our initial report. Of the 12 prior audit recommendations, two were implemented, seven were partially implemented, and three were not implemented.

Key Recommendation

Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review.