04.28.10

SCHUMER URGES NYPA TO CRAFT LONG TERM ENERGY CONTRACT WITH STEUBEN FOODS; LONGER CONTRACT WOULD ASSIST COMPANY WITH CRITICAL EXPANSION AND JOB CREATION

Despite Recession, Steuben Foods Thriving But Needs Long Term Energy Contract for StabilityCompany Currently Planning Expansion that Would Pump $52M, Add 150 Jobs to Western New York Economy - A Longer Term Contract Would Assist Them In Their ExpansionSchumer: With Comparatively Low Energy Needs, Many Jobs, and Good Prospects to Expand, Steuben Foods Meets All the Requirements For Longer Power Contract

Today, U.S. Senator Charles E. Schumer announced that sent a personal letter to the President and Chief Executive Officer of the New York Power Authority (NYPA), Richard Kessel, urging him to craft a longer term energy agreement with the Western New York based company, Steuben Foods. Currently, NYPA has offered them a 7  year contract, which could hinder their plans for a major expansion. Schumer said that Steuben Foods meets all the criteria put forth by NYPA for a longer term contract, and NYPA should act accordingly. He noted that their power needs are relatively modest, especially in relation to the number of jobs at the firm and its potential for expansion. Schumer made the case that that stable, affordable and predictable energy prices are key to the company's plan for growth in the near and future term.  NYPA is offers energy contracts that last 7, 10 or 15 years.
 
"A long term, stable, and predicable energy supply will allow Steuben Foods to thrive and grow, creating jobs and pumping cash into the regional economy," said Schumer.  "NYPA is in a position to help make this happen, and today I am urging them to do so."
 
"Steuben Foods is proud to call Western New York home," said Thomas Krol, Steuben Foods General Counsel and spokesperson.  "Our company would not be here but for the longterm commitment of hydropower that we received from the New York Power Authority over 25 years ago.  Our allocation of lowcost hydropower enabled us to grow the business and, in turn,  our employment base to nearly 500 employees in Western New York.  Steuben Foods can only continue to grow and create new jobs in Western New York with an assurance of a longterm commitment of hydropower from the New York Power Authority.  We are excited about what appears to be a bright future in aseptic and extended shelf life food and beverage manufacturing.  We now need the support of the New York Power Authority to move into the future."
 
Steuben Foods has been an important part of the Western New York economy since 1985 when they opened their processing facility in Elma, New York. The business has survived through economic boom times and severe recessions and now provides good paying jobs and benefits to nearly 500 people and bolsters the local economy by purchasing New York dairy products and patronizing local vendors. Since 1985, Steuben has made significant investments in its Elma facilities including a $30 million expansion that added 100,000 square feet of space to increase production by 68%  and an additional 150 jobs. Now, Steuben is prepared to embark upon an ambitious new expansion program - they are planning to spend in excess of $52 million to add aseptic plastic bottles to Steuben's packaging options which will add as many as 150 new jobs, and build another 100,000 square feet of new manufacturing space,  increasing production another 50%. Such an expansion will be a huge shot in the arm to Western New York's economy and add sorely needed jobs at a time when many middle class New Yorkers are struggling to find work.
 
A forward looking contract with NYPA will provide the company with the necessary security to continue its planned $52 million expansion because it will provide stable energy prices and a more predictable balance sheet. Growing regional companies like Steuben Foods rely heavily on long term forecasting to make business decisions about expansion and hiring, particularly at a time when credit is still hard to come by. During difficult economic times like these, NYPA actions should be geared toward providing stability and predictability to successful companies, like Steuben, that form the heart and soul of local economies.
 
Schumer has been one of the Senate's most steadfast advocates for developing businesses. Recently, Schumer worked to pass a Hire Now Tax Cut that allows New York businesses to deal with increasing economic demand by hiring more workers at reduced cost to their bottom line. In his letter, Schumer emphasized the need for good paying jobs in the region and the ability of Steuben Foods to serve as the lifeblood of the Western New York economy if it receives long term energy contract that provides for stable energy prices. The full text of Schumer's letter to the NYPA can be seen below:
 
 
Richard M. Kessel
President and Chief Executive Officer
New York Power Authority
123 Main Street
White Plains, New York, 106013170
 
Dear Mr. Kessel:
 
It has come to my attention that New York Power Authority (NYPA) recently proposed to extend its hydropower contract with Steuben Foods for seven years. Because I believe that it is a good investment for the people of the state and a prime job producing company in Western New York, I write to urge NYPA to extend the contract beyond seven years. They consume a relatively modest amount of power when compared with the number of jobs they sustain, and with their potential for growth. This is especially important in the current economic climate and sustained high unemployment rates.  
 
Steuben Foods has been a critical part of the Western New York economy since 1985 when they opened their processing facility in Elma, New York. The company provides good paying jobs and benefits to nearly five hundred people and stimulates the local economy by purchasing New York dairy products and patronizing local vendors. Since 1985, Steuben has made significant investments in its Elma facilities including a $30 million expansion that added 100,000 square feet of space to increase production by 68%  and an additional 150 jobs. Now, Steuben is prepared to embark upon an ambitious new expansion program - they are planning to spend in excess of $52 million to add aseptic plastic bottles to Steuben's packaging options which will add as many as 150 new jobs, and build another 100,000 square feet of new manufacturing space,  increasing production another 50%.
 
Having stable energy costs is a vital component of the long term business plan that will allow Steuben foods to fund their ongoing capital improvement projects and expand their operations. The lack of a longerterm contract with NYPA for affordable energy makes it extremely difficult to predict business expenses, hampering their ability to negotiate contracts with customers, and to continue with their expansion plans. In these economically challenging times, NYPA should be working especially hard to foster local businesses such as Steuben that are planning for significant job growth.
 
Thank you for your attention to this important request. I look forward to working with you to strengthen the economy of Western New York. Please don't hesitate to contact my staff with any questions.
 
                                                                                                                                        Sincerely,
 
                                                                                                        
                                                                                                                                                                                           Charles E. Schumer
United States Senate
 
 
 



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