State PSC approves power line

PHOTOGRAPHER: Stephen Williams

The state Public Service Commission on Thursday unanimously approved plans for a 1,000-megawatt power line that would run underground through the Capital Region from Canada to New York City.

The $2 billion Champlain-Hudson Power Express could provide a significant amount of New York City’s daily power needs, using hydropower from large dams in Quebec.

The project would bury a direct-current transmission line along railroad rights-of-way through the heart of the Capital Region, including Saratoga, Schenectady and Albany counties.

For other sections of the 332-mile route, the cable would be buried under Lake Champlain and in the bed of the Hudson River south of Albany. It is routed over land through the Capital Region to avoid the PCB-contaminated sections of the Hudson.

The commission, which has been reviewing the Hudson-Champlain plans for the last three years, found that the increased reliability and cost-lowering benefits of importing more power to New York City outweigh any environmental harm. There is also environmental benefit, the commission found, since Canadian hydropower would displace the need for new gas- or oil-fired power plants in the city.

“What this is going to do in the long run is replace other power generation that would have had to be built in New York City,” said Mark Reeder, the PSC’s director of regulatory economics.

The project is being developed by Transmission Developers Inc. of Albany.

“It is gratifying to know that this project, having been studied thoroughly and openly, has received this important certificate from the state of New York,” TDI President and CEO Donald Jessome said in a statement. “We look forward to completing the permitting process so we can begin delivering clean, reliable, low-cost power to the residents and businesses of New York.”

At the meeting, PSC administrative law judges Michelle L. Phillips and Kevin J. Casutto summarized their December recommendation that the power line be issued a required PSC permit.

“The benefits are significant and substantial,” Phillips told the commission, which held its monthly meeting Thursday in Albany.

A joint proposal for commission approval was negotiated between the developer, New York City officials, state agencies and some environmental groups.

As part of the agreement, TDI will be setting up a $117 million trust for the enhancement of aquatic habitats and fisheries resources in Lake Champlain and the Hudson, Harlem, and East rivers and their tributaries.

The direct-current line will terminate at a Consolidated Edison station in Astoria, Queens, where it will be converted into alternating current.

The 1,000 megawatts would be the equivalent of 10 percent of New York City’s power needs, PSC officials said.

Commissioners, including Chairman Garry Brown, praised a provision that says New York City ratepayers won’t be held responsible for the investors’ recovery of their capital costs.

TDI is owned by the Blackstone Group, a large New York City private equity firm.

The project will lead to lower power costs in New York City, Reeder said, and could potentially lower costs upstate by decreasing the city’s demand on upstate power sources.

“This isn’t really a solution for upstate,” he said. “But it solves a lot of other problems.”

The project has faced criticism from the Independent Power Producers of New York, an industry group for the state’s power plants. The IPPNY contends the project will be uneconomical without subsidies. The group remains opposed, though it declined to comment on Thursday’s decision.

Central Hudson Gas and Electric, the Sierra Club Atlantic Chapter and Entergy Nuclear, which owns the Indian Point nuclear plant in Westchester County, have also criticized the plan.

When construction will start remains uncertain.

The power line, first proposed in 2009, remains under review by the Federal Energy Regulatory Commission. The company said it hopes to have all the needed approvals by the end of the year.

Backers hope construction will start in 2014 and the line will be operating by 2018. About 300 construction jobs are expected to be created.