A proposed 330-mile electric line that will run from Canada to New York City received a special federal permit that will allow for its operation over international borders.
The U.S. Department of Energy issued what is called a presidential permit for the Champlain Hudson Power Express, which will run 1,000-megawatt transmission cables with a 5-inch diameter from Quebec to a new converter station in Astoria, Queens.
Transmission Developers Inc., which is developing the project, has said it will siphon hydro and wind-produced energy from new generator stations in Canada down to New York City metro users.
“Delivering lower-cost, clean power to New York will be extremely beneficial to businesses, residents and the environment, and we are eager to start delivering these benefits to the people of New York,” Donald Jessome, TDI”™s CEO, said.
TDI, which is owned by the publicly traded investment corporation Blackstone Group LP, said it expects the project will cost $2.2 billion. The company said the lines will ultimately save ratepayers as much as $650 million per year while creating an average of 300 construction jobs during the four years it takes to build.
The project has its detractors, though, with some industry advocates and that labor groups saying it will result in local jobs lost and profits sent off to foreign companies and investment firms. As part of the construction, the Canadian government-owned utility Hyrdro-Quebec will build new generator stations to supply the power lines.
Matthew Cordaro, a trustee at the Long Island Power Authority and a former utility industry executive, said “a lot of people have some skepticism” about the Champlain Hudson.
“It”™s not the best project in the world,” Cordaro told the Business Journal. “Definitely from the New York state perspective or for the New York state economy.”
Cordaro and others have questioned if the estimated $2.2 billion cost of the construction is too optimistic. When the proposal first surfaced in 2007, electricity provider Consolidated Edison estimated the cost to be closer to $11 billion. There is also a question if Canadian utilities will create the generator stations quickly enough to produce the current that TDI says the electric line will provide.
Although TDI has said the construction costs would not be paid through consumer rates, Cordaro said increased costs would end up trickling down.
Cordaro said his biggest complaint was that upstate power generators could not plug into the line, which he believed could ease an energy problem downstate, where users consume most of the state”™s power but there is not enough local generation to meet demand during peak-usage periods.
“There”™s surplus capacity in the upstate region and it needs to be unleashed,” he said. “(The Champlain Hudson) goes even further bottling out that capacity in upstate New York.”
Paul Steidler is the director of communications for the New York Affordable Reliable Electricity Alliance, or AREA, an industry advocacy group representing more than 150 businesses, labor unions and other groups. Cordaro is an AREA adviser.
The state recently approved a capacity zone in the Hudson Valley region that allows generators to increase their prices with the intent of incentivizing companies to build new stations in the region. But the Champlain Hudson may discourage investment into generation in the region, Steidler said.
“It”™s going to send some disruptive market signals,” he said. Steidler said AREA”™s analyses estimated approximately 75 percent of the state”™s electrical infrastructure is 40 or more years old. Investment in upgrading the systems should be a priority above building new lines, Steidler said.
“At the end of the day this is about the people of New York paying a lot of money that is going to Canada and the special interests,” he said.
Some labor groups like the AFL-CIO Local 17 have supported the project, while others like the International Brotherhood of Electrical Workers Local Union 503 have opposed it, with the latter saying at Hudson Valley public hearings the Champlain Hudson would mean setting a precedent of relying on foreign energy.
The company won support of several high-profile environmental groups after agreeing to avoid an ecologically sensitive area of the Hudson River. Some residents in the Hudson Valley opposed the route of the lines, which are planned to snake out from underneath the Hudson in Stony Point and pass near Revolutionary War-era Waldron Cementary. Although the lines wouldn”™t go directly through the cemetery, some residents said it showed a lack of respect for the deceased and feared graves would be disrupted during the construction.
TDI also agreed to establish a $117 million mitigation fund for the preservation of aquatic wildlife in waterways as part of an agreement with environmental groups Scenic Hudson and Riverkeeper.
The power express still needs approval from the U.S. Army Corps of Engineers. TDI plans to break ground in 2015 and have the line operational by 2018.
