Project to bring Canadian hydro, wind power to NYC draws fire in Albany

Source: Hannah Northey, E&E reporter • Posted: Thursday, September 27, 2012

New York state lawmakers, union leaders and operators of coal-burning power plants expressed opposition at a state Senate hearing yesterday to a proposal to ship Canadian hydropower into New York City through an underwater power line.

Senate Standing Committee on Energy and Telecommunications Chairman George Maziarz (R) said the proposed $2.2 billion, 333-mile transmission line from the Canadian border to the city would punish aging power plants that are already struggling from weak demand and cheap natural gas.

“We must adopt policies that incentivize older plants to repower and at the same time update our transmission infrastructure so that power-rich areas upstate can supply power to consumers downstate,” said Maziarz, whose district encompasses all of Niagara County outside the city of Niagara Falls, all of Orleans County and the western portion of Monroe County. “We don’t need an extension cord from Canada; what we need instead is an investment in New York jobs and support for our local communities.”

At issue is the proposed Champlain Hudson Power Express, one of many projects that are being proposed under the “New York Energy Highway” that Gov. Andrew Cuomo (D) is considering to upgrade the state’s aging grid (Greenwire, Aug. 23). The power line would be buried under portions of the Hudson and East rivers and Lake Champlain and connect to a proposed converter station in the New York City borough of Queens.

Donald Jessome, president and CEO of Transmission Developers Inc. (TDI), defended his company’s project and said it would bring more than 1,000 megawatts of clean wind power and hydropower to New York City. He also dismissed assertions from Con Edison that the power line could cost five times as much as TDI has estimated and said the utility provided no “backup detail” for that statement.

“The $2.2 billion is a number we’ve been refining for four years,” Jessome said.

TDI is facing bipartisan opposition from Maziarz and Assemblyman Andrew Hevesi, a Queens Democrat, as well as the state’s unions that operate coal plants in upstate New York.

Maziarz said he plans to introduce a series of bills in the legislative session that starts in January to provide tax credits for power plants that are willing to meet stringent environmental standards outlined in the Power New York Act, which Cuomo signed into law last year.

The upstate lawmaker is also considering legislation to change New York’s Regional Greenhouse Gas Initiative program.

Energy companies would be able to use money set aside for buying carbon credits under the RGGI program to upgrade their plants, use cleaner-burning fuel technologies, or build wind, solar or other renewable energy sources. The legislation would also require the state to review whether generators shipping power into New York should also be charged under the RGGI program.

Maziarz is also pushing for New York to sell power plants that are used sparingly to meet peak power demand, which would raise up to $700 million to help communities that have lost taxes due to plant closures in recent years.

Coal plant operators applauded the senator’s proposals and called for support for in-state generators, as opposed to piping in power from Canada.

Jerry Goodenough, a plant manager at AES Corp. who oversees the Somerset coal plant near Barker, N.Y., said his facility wouldn’t be able to directly connect to the Champlain Hudson Power Express line and the project wouldn’t create jobs in the state.

Goodenough also applauded the senator’s proposal to allow companies to use RGGI money for upgrades and said the focus should be on building transmission for the state’s existing plants. “We have a transmission problem in New York, not a generation problem,” Goodenough said.

In-state generators and transmission developers are also facing stiff competition from a surge of cheap natural gas and low demand.

Thomas Rumsey, a spokesman for the New York Independent System Operator, told the Senate panel that there is currently excess capacity across New York because demand for electricity dropped in 2008 during the economic downturn. The state is still at or below the 2008 levels and can handily meet reliability and demand through 2020, he added.

Although Rumsey would not comment on TDI’s proposal, he said the grid operator is tasked with protecting in-state competition and would review the project.