2 years ago
NEW YORK — New York’s famed skyline sucks up about 52 million megawatt hours of power every year — nearly enough to light up the entire state of Massachusetts. But most of it comes from polluting power plants, including some in Queens.
Faced with a worsening climate crisis and ambitious mandates to slash emissions, New York City has decided to make an expensive bet on Canadian hydropower to clean up its government buildings.
The city is poised to pay billions of dollars more for its renewable electricity over the next 25 years to finance the Champlain Hudson Power Express, a 339-mile hydropower transmission line that will deliver Canadian hydropower to New York City, according to regulatory files reviewed by POLITICO.
Given the city’s overreliance on fossil fuels, the purchase of 1,250 megawatts of renewable power is a no-brainer, city officials argue. But it faces steep opposition from a wide variety of groups, including Indigenous leaders and environmental advocates, who say the hydropower line poses environmental concerns and that better options are available for such a high cost.
Soon, state regulators will decide whether or not to allow the deal to move forward. Comments on the proposal are due Monday ahead of a decision expected in the coming months.
The debate underscores the challenges state and local officials face in greening energy grids, even in blue states like New York that have prioritized fighting climate change. The city has only become more reliant on fossil fuels since the state passed a law requiring it to cut emissions 40 percent by 2030. How it will reverse that trend and clean the grid is an unsettled question.
“We have a choice right in front of us, right now, that we need to be able to say yes to so that we can continue to end our addiction to fossil fuels and not build out any new pipelines,” said Dan Zarrilli, the former chief climate adviser to former New York City Mayor Bill de Blasio, in an interview. “This is the one that's right in front of us. We have to be willing to say yes to this.”
Current New York City Mayor Eric Adams has already budgeted $75 million in 2026 for the project. The city estimates it could cost between $2 billion and $4 billion over the next 25 years — a figure that also includes the cost to fund a separate transmission line to deliver renewables from upstate New York. The state estimates the projects could result in as much as a 10 percent hike on electricity bills for some upstate customers, who won’t directly benefit from the power. Backers of the project dispute it will be a major hit to New Yorkers’ wallets because there’s private demand for the power, which could lower the hit to ratepayers.
What it is
The $4 billion project is being carried out by Transmission Developers Inc., a subsidiary of the Blackstone Group. Hydro-Québec, a Canadian public utility, will supply the power using its existing hydropower dams in Quebec.
The idea has been kicked around for more than a decade. It gained new support under de Blasio, who committed the city to purchasing power from the line at an Earth Day event in 2019.
The city has made major efforts to support the line in recent years. Officials quietly inserted a provision supporting the hydropower project into a local law in May 2019 that requires large building owners to cut emissions or face fines, POLITICO first reported.
That clause allows private landlords to purchase Renewable Energy Credits, or RECs, from the hydropower line. The move is designed to help finance the project and create new demand for hydropower, as the city only needs roughly half of the power delivered by the transmission corridor for its own buildings.
Backers are banking on the private sector to buy up most of the credits the city doesn’t purchase. Don Jessome, president and CEO of Transmission Developers Inc., said there’s interest from “large industry groups” and that, combined with the cheap cost of electricity produced by hydropower, will result in a “very de minimis amount of cost to other consumers.”
New York City estimates the Champlain Hudson project could reduce statewide reliance on fossil fuels by 15 percent in 2030. It is fully permitted, would supply about 20 percent of New York City’s electricity demand and could be operational by the end of 2025. Backers include the New York League of Conservation Voters, Citizens Campaign for the Environment, labor unions and several towns along the route that runs from Canada to Astoria, Queens.
“Not only will they help us meet our sustainability goals — they will also be a boon to our recovery, helping to create thousands of good-paying jobs for New Yorkers,” Adams said in a statement about CHPE and Clean Path. “Unlocking the potential of the green economy is one of my administration’s key priorities, and we look forward to advancing this project in partnership with local and state officials.”
But opposition abounds.
A future without peaker plants?
Among the chief concerns is whether the project will achieve its main goal: to shut down peaker plants, some of the dirtiest power facilities in New York that only run when electricity demand is high.
Gov. Kathy Hochul and CHPE supporters have claimed that the project, paired with the Clean Path line, will help retire the dirtiest fossil fuel plants in New York City.
“In my lifetime, I would like to know that I played a part in taking down these stacks,” said former New York City Council Member Costa Constantinides, an architect of the law that incentivizes the private sector to buy hydropower, in an interview outside the Astoria Generating Station.
But there’s a hitch: The proposed contract for the Champlain Hudson project doesn’t require Hydro-Québec to sell power on the line in the winter months, when demand in chilly Canada for energy is at its peak.
That’s less of an issue now, when the highest demand for electricity in New York comes on sweltering summer days. But as the city and state push forward with electrifying buildings to cut emissions, New York will have its highest need for electricity on frigid winter days when heat pumps kick in to keep homes and offices warm.
So, the grid operator tasked with maintaining a reliable electricity system to keep the lights on from Wall Street to Broadway may not be able to count on the Champlain Hudson project as it procures resources. As a result, polluting peaker plants could get paid to stay online for years to come and be called on to burn gas or oil on the coldest winter days.
“On its face, it seems that transmission that is paid for by New York consumers should be made available year round,” wrote the Alliance for Clean Energy New York, which represents renewable energy developers, in public comments in February raising concerns about the proposed contract for CHPE. ACE represents renewable developers and companies with competing proposals.
Jessome argued the project is better suited than other renewables to supply constant energy when it first comes online. The developers and HydroQuebec have also suggested the line could carry power northward from offshore wind projects when it isn’t needed, thus having reservoirs in Canada serve as giant batteries until the power is needed in the city.
“So, you know, other intermittent renewables, I mean, they have their wonderful technologies, but they generate when the wind is blowing and the sun is shining, we generate 24/7, 365 days of the year,” Jessome said in an interview.
As for a future when more energy is needed in the winter?
“We're just one of many projects,” Jessome said, referencing other plans competing for the RECs. “Those projects are going to be there in the future, they're going to be there for future programs that are going to be built in order to bring that energy in as demand increases.”
That point was echoed by other proponents, like Constantinides, who is the CEO of the Variety Boys & Girls Club — which received a $1.25 million grant from the project developers to build a new science lab. They argue the line has immediate benefits and is just part of the larger landscape of renewable development.
But the costs of subsidizing additional projects would likely be passed on to New Yorkers, and not all of the proposed renewable projects in front of the state are fully permitted. New York’s first offshore wind projects won’t deliver power to the city until at least 2026. Clean Path, the other transmission line the city is supporting that would deliver renewables from upstate, similarly won’t be ready until 2027.
Peaker priorities
Many green groups opposed to the Champlain Hudson Power Express are calling for the selection of a different project. They’ve been largely supportive of the Clean Path line chosen by Hochul, which is powered by in-state generation with intermittent renewables backed by New York Power Authority’s pumped hydro storage plant in Schoharie County.
Hochul has said she selected both projects and said in November they will pave “the way for cleaner air and a healthier future for all New Yorkers.”
The 1,300 MW Clean Path is 175 miles and could be operational by 2027. It’s being developed jointly by the NYPA, renewable developer Invenergy and energyRe, which has ties to real estate powerhouse Related Companies.
Some local groups want to see NYPA commit to shutting down the New York City peakers it owns before the subsidies for the line get final approval. NYPA’s plants are relatively new compared to some of the peaking units, with lower emissions.
“The South Bronx perennially has very poor public health indicators, particularly due to particulate matter from vehicles, industrial and power related activities,” wrote Donald Eversley, executive director of the Greater Hunts Point Economic Development Corporation, in a comment urging the PSC to reject Clean Path’s contract unless NYPA committed to close its South Bronx plants as soon as 2026 if the Champlain Hudson project delivers clean electricity by then.
A competitor to Champlain Hudson and Clean Path has made a pitch to New York City advocates and policymakers that some find far more compelling than Champlain Hudson’s promises.
Rise Light and Power, which operates the largest fossil fuel plant in the city known as Big Allis in Long Island City, Queens along with several peakers, offered to shut down the 2,000 MW behemoth if their 1,200 MW Catskill Renewable Connector transmission line got a state contract.
“They want to retire Ravenswood. It doesn’t get more environmental justice than shutting down the largest baseload [plant] in the city,” said Eddie Bautista, executive director of the nonprofit New York City Environmental Justice Alliance. “That is the kind of foregone opportunity that this CHPE deal is undermining.”
Rise had not previously made this commitment public, but outlined the offer in comments opposing the contract with CHPE.
“The State would have assurance of the shutdown of Big Allis, New York City’s largest fossil-fuel generation unit, winter capacity, further upstate renewable energy generation, billions infused into the State’s economy, and a just transition of the current Ravenswood facility’s workforce,” the company wrote in its comments in February.
Indigenous impacts
Another concern raised about the CHPE line is the impacts the massive dams in Canada have had on Indigenous communities there. The construction of dams inundated traditional hunting lands and burial grounds and caused higher levels of mercury in fish the communities once relied on.
Several First Nations in Québec and Labrador have sued Hydro-Québec, seeking compensation for the construction of the dams on their lands. The lawsuit is pending. Some Innu and First Nation communities have also opposed transmission line deals to bring Canadian hydropower produced from these dams to New York and elsewhere in New England.
“The USA, New Yorkers, etc., they should know the electricity they’re buying is environmentally friendly, yes, probably the most environmentally friendly option, but it’s not ethical,” said Michèle Laforest, a spokesperson for the Innu Nation of Labrador in an interview. “This is the biggest deal in history and it’s on the backs of our ancestors.”
The Innu Nation of Labrador was impacted by the construction of a dam at Churchill Falls, more than 800 miles northeast of Montreal, in the late 1960s. The flooding caused by the construction surprised the Innu, destroying camps where they hunted and burial grounds.
NYC-EJA, Sierra Club and others have cited opposition from the First Nations impacted by the dams that will provide the power as a major concern.
Hydro-Québec has pointed to an agreement with and support from the Mohawk Council of the Kahnawake First Nation for the CHPE line. The transmission line on the Canadian side will pass through their territory and they will be joint owners of that portion of the project.
Hydro-Québec also agreed to purchase the power from a to-be-built 200 MW wind project half-owned by some Innu First Nations in Quebec as part of the CHPE contract.
The New York City contract includes provisions seeking to ensure those two agreements are honored. It also requires consultations with Indigenous communities for construction of any new transmission lines or refurbishments of existing power plants that might change water levels or have other environmental impacts.
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