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PSC approves sending Quebec hydropower to NYC

ALBANY – A $2.2 billion project to bring power from Quebec to New York City passed a key regulatory hurdle Thursday afternoon in Albany. Critics say the project would reduce power sales from upstate power plants.

The State Public Service Commission approved the construction and operation of the Champlain Hudson Power Express, which will carry 1,000 megawatts of power from Canada through two wires stretched mostly underwater beneath Lake Champlain and the Hudson River.

Backers say the plan will bring clean and cheaper hydropower energy downstate, reducing reliance on coal and other energy plants.

Critics, including some lawmakers and union groups, insist it will reduce upstate jobs by importing energy from Canada instead of current upstate producers.

A PSC economist last year said the project could reduce energy prices downstate while boosting them upstate, though officials insisted Thursday that would not be the result.

Gov. Andrew M. Cuomo, who has made the issue of upstate jobs a key policy priority, did not have any comments on the approval by the state agency Thursday, aides said.

“I’m disappointed. I think it’s bad long-term energy policy, particularly for upstate New York, because I think once you start importing energy from out of state, in this situation out of the country, your energy policy is going to be subject to people outside the state,” said State Sen. George Maziarz, a Newfane Republican and chairman of the State Senate Energy Committee. He said the project will hurt upstate power generators and cost jobs.

“I don’t think the battle is over. They’re still have to use eminent domain, and we’re trying to stop them from that,” Maziarz said of the developers’ need to get land to bury the transmission lines.

The plan by Transmission Developers Inc. would carry electricity through a direct-current line for 333 miles from Quebec to Queens, with nearly 200 miles of the line located on the bottom of Lake Champlain as well as the Hudson, Harlem and East rivers before coming ashore in the Astoria neighborhood of Queens to a station that will transfer the DC current to AC current. Officials said it will provide “significant’’ air-pollution reductions and ensure that protections of habitats in the bodies of water are not harmed during the construction and operation of the two lines, which will be six inches in diameter.

The plan, still needing federal approval, is financed by Blackstone Group, the world’s largest private equity firm.

PSC Chairman Garry Brown said he supported the project because it include a broad range of support – including energy buyers, environmentalists and local officials along the line’s route – and also because the developer has vowed not to turn to ratepayers if financial problems develop with the project.

“That shifts an awful lot of risk of cost overruns to the developer and away from the ratepayer,” Brown said.

PSC officials insisted the project will not affect jobs upstate and that, in a statewide system of 40,000 megawatts of power needs at peak periods, there is plenty of room for upstate generators to compete with the new Champlain Hudson project.

The project was first proposed in 2010.

“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,’’ said TDI President Donald Jessome.

Jessome said his group still has other tasks ahead, including two levels of federal approvals, more details about the line’s construction for the PSC and finalizing negotiations with Hydro-Quebec, the power generator and transmission company owned by the province of Quebec that will fill at least 75 percent of the Champlain Hudson power line’s capacity. Jessome added that eminent domain issues will not be a problem, as Maziarz said, because the project will not need such powers for its construction.

Jessome said his group’s projects will leave plenty of room for upstate power companies to supply downstate markets.

“There’s lots and lots of room for competition,” he said.

The plan has been opposed, though, by the Independent Power Producers of New York, whose members generate more than 75 percent of the state’s electricity.

Phil Wilcox, the business representative for Local 97, International Brotherhood of Electrical Workers, in Western New York, said more than 100 jobs have been lost the past two years at the Dunkirk and Huntley power plants because of declining production brought about by lower natural gas prices and logjams in the aging power transmission lines upstate that already make it difficult to get upstate power to downstate.

Wilcox said Cuomo could have used his influence to stop the PSC’s actions Thursday, but he believes the governor is hoping the additional power from Quebec will help with his plans to persuade the federal government to close Indian Point, a nuclear power plant in Westchester County. Moreover, he said the Champlain Hudson project will make it less cost-effective for upstate plants to improve the congested transmission line problem, which is especially acute in the Utica and Albany areas of the electrical grid.

“This threatens the ability to finance our own in-state transmission investments,” Wilcox said.