BESICORP-EMPIRE PROJECT
October 2003 Progress Update Newsletter

October 2003
PROGRESS UPDATE

This newsletter is provided to inform the public of the progress and upcoming activities for the proposed Besicorp-Empire Projects. It is important to us that the public has easy access to information regarding the proposed Projects. If you have any questions, comments or issues you would like discussed, please feel free to contact us at the numbers listed in the Information Sources section of this newsletter.

Project Description
The BEDCO Projects are being developed at the former BASF manufacturing site in the City of Rensselaer, New York. The newsprint recycling facility will recycle old newspapers and magazines to produce clean 100% recycled newsprint. The cogeneration facility, fueled by clean burning natural gas will produce nominally 505MW of electricity and supply the energy for the newsprint recycling facility while also providing additional electric capacity for the region.

BEDCO anticipates starting construction of the Projects in mid 2004, with commercial operation commencing in 2006.

Benefits to the Community
The Empire Projects will bring substantial benefits to the City of Rensselaer and surrounding communities. These benefits come in the form of PILOT (payment in lieu of taxes) payments that go to the school district, city, and county; other contributions and payroll taxes; as well as indirect benefits from employment (payroll), local contracting, purchasing and the environmental remediation of the site of by BASF.

PILOT payments could ease the tax burden to the remaining taxpayers or could allow additional revenue to be utilized by the city and school for programs that they otherwise would not have.

Studies support the effect that increased employment has on a community. Known as an economic "spin-off" effect, the statistics generally show that at least twice the amount of payroll is realized in the area surrounding a facility that generates this payroll, both during construction and during operation.

In addition, the impact and benefit of the site being restored to productive use by remediation cannot be underestimated.

Permitting Process
There are several core permits that are required for the proposed facilities as follows:

Article X/SEQRA
Culminating settlement discussions that began in October 2002 (see the May newsletter), in June of this year a Joint Settlement Agreement ("JSA") was executed by BEDCO, New York State Department of Public Service, New York State Department of Environmental Conservation, New York State Department of Health, the Rensselaer County Environmental Management Council, the City of Rensselaer, the Sierra Club, and Niagara Mohawk Power Corporation. The JSA memorializes BEDCO's agreement with the parties to the settlement on 15 topic areas, including air, water, noise, visual resources, cultural resources, and land use. (See back page) A few examples of the many elements of additional mitigation provided by BEDCO in the JSA include: reduction in maximum permitted annual days of burning oil in lieu of natural gas; use of a cooling tower that will significantly reduce the estimated annual hours of visible plumes from the tower; revision of the building layout at the newsprint facility, construction of a bikeway along Riverside Avenue in front of the facilities, and creation of arevolving loan fund for restoration and enhancement of structures and facades in the City of Rensselaer's Historic Residential zoning district.

The JSA was distributed to Active Parties and filed with the Secretary of the Siting Board on June 18, 2003. A copy of the complete JSA is available for review in BEDCO's Rensselaer office and local libraries. The text of the JSA is also available for review on our website at http://www.besicorp.com/empire/JSAHome.htm .

Now that the JSA has been filed, the presiding NYSDPS and NYSDEC examiners have set a schedule for the rest of the case (see the ruling dated June 20, 2003 on the DPS website at http://www.dps.state.ny.us/fileroom/doc13391.pdf. Hearings on items not finalized in the JSA were held September 17th thru the 19th and September 24th thru the 26th, and the examiners' Recommended Decision is expected in mid-November. Final Siting Board and NYSDEC Commissioner's decisions for permitting of the projects are therefore expected in February 2004.

Article VII - Electric
The Article VII Application for the electric transmission line was filed on April 29, 2003 and was deemed to satisfy the minimum requirement under the Public Service Law 122 on June 13, 2003. Public Statement Hearings were held at 1:00 PM and 7:00 PM on July 14, 2003 at the Rensselaer High School. A schedule has been set by the Administrative Law Judge assigned by the Public Service Commission. BEDCO anticipates the Article VII process will be completed this spring.

Article VII - Gas
The Article VII Application for the gas transmission line is expected to be filed in mid September 2003. It is anticipated that the Article VII process will provide for a decision on the certificate to construct the gas line by February 2004.

Army Corps of Engineers (ACOE)
The Army Corps of Engineers permit application for permission to construct certain components associated with both the proposed recycled newsprint manufacturing facility and the proposed Cogeneration Facility was filed by BEDCO on April 25, 2003. The ACOE application relates to navigable waters and wetlands. Additional ACOE applications for the interconnecting electric and gas lines were filed by Niagara Mohawk Power Corporation on July 3, 2003.

Site Cleanup By BASF
The North 40 refers to the property where existing buildings on the BASF site are located and where the future home of the Recyled Newsprint Manufacturing Facility. The South 40 refers to the undeveloped acreage south of the main plant where the Cogeneration Facility will be located.

North 40
Under a consent order with DEC, BASF is at work implementing interim remedial measures to cleanup the site at the former manufacturing facility. NYSDEC summarized and addressed the comments received on the PRAP in the responsiveness summary section of the Record of Decision (ROD). The Record of Decision (ROD) for the BASF Manufacturing Site was issued by NYSDEC on September 12, 2003. The ROD is the Department's final selection of the remedy for the Site.

South 40
Under a voluntary cleanup agreement, BASF has submitted a Supplemental Investigation Report and a Remedial Action Work Plan to NYSDEC. Once the Work Plan is approved, BASF will perform the remediation to meet the requirements of the work plan. This work will be completed prior to BEDCO commencing construction.

Public Meetings and Upcoming Events

July 14, 2003 - BEDCO attended the Public Statement Hearing on the Article VII Electric Line Application at 1:00pm and 7:00pm at Rensselaer High School. The public was given an opportunity to express concerns or comments in front of the presiding Administrative Law Judge.

September 18, 19, & 20, 2003 - As part of BEDCO's continued commitment to the community, BEDCO sponsored the fireworks display for the Rensselaer Fest/Lucky Duck Derby, as well as an informational booth. The booth gave residents an opportunity to obtain information through handouts and visual aids. Also, several BEDCO representatives were on hand during the event to answer questions that residents may have had.

Above: BEDCO's booth at the 2003 Rensselaer Fest / Lucky Duck Derby.

October 30, 2003 - BEDCO will be holding two Project Review & Update Public Meetings on October 30, 2003 at 4pm and 7pm in the Rensselaer High School auditorium. BEDCO officials will provide residents with informational status updates on the Project process, Permitting process, Joint Settlement Agreement, Gas and Electric Transmissions lines, and other pertinent information.

BEDCO also offers to make presentations regarding the proposed Cogeneration Facility and Newsprint Recycling Facility to any responsible community group.

JSA Agreed Changes Summary

October 30, 2003 Public Meeting Invitation