PSC Recommendations For Transmission Line Projects Draw Critiques

Sep 8, 2014

The comment period on proposed recommendations concerning a New York transmission line project recently ended. An environmental group is calling for the whole process to be put on hold. Others with concerns don’t go as far.

The New York State Public Service Commission Advisory Staff Recommendations are for the procedural proposal process, cost recovery, cost allocation, and risk-sharing for the Alternating Current Transmission Upgrade proceeding; that is, to develop at least 1,000 megawatts of new transmission capacity, with the expansion of more than 150 miles of transmission lines. Ned Sullivan is president of Poughkeepsie-based environmental group Scenic Hudson, part of the Hudson Valley Smart Energy Coalition.  

“We are calling on the Public Service Commission to reject this ill- conceived staff proposal and to terminate this proceeding until it completes a separate, ongoing proceeding that it is conducting that is aimed at developing a blueprint for a 21st century energy system.”

The coalition is focused on portions of the proposed lines that would pass through seven counties and 25 towns in the Hudson Valley, ultimately reaching their destination in Dutchess County. Democratic Assemblymember Didi Barrett’s district includes portions of Dutchess and Columbia Counties. She, too, submitted a comment letter to the PSC.

“Well, I just really feel that we spent a lot of time and our community spent a lot of time sharing our feelings with the PSC and with these developers,” says Barrett. “And this particular set of advisory outline didn’t address any of that.”

She says her region is already feeling the economic impact before anything has happened, with property values going down. A spokesman says the PSC has established a robust public participation and stakeholder input process in this proceeding and that comments will be closely considered as the PSC conducts its review. In response to criticism about need, the PSC spokesman says constraints on the state's electric transmission system are leading to significant transmission congestion and contributing to higher energy costs and reliability concerns, causing consumers in the lower Hudson Valley to pay $280 million annually in higher electric costs, primarily because of this congestion. Again, Sullivan.

“First, there is no requirement for a documentation of need. Second, there are at least four other transmission and generating projects that are farther along in securing permits and priority for dispatch. These are not considered by the staff proposal for the transmission proceeding,” says Sullivan.  “Next, there is no information about to how much weight will be given to Governor Cuomo’s policy directive to keep the transmission lines within utility corridors.”

The PSC spokesman responds by saying it is not clear which projects will be built, and the Commission will consider the effect of all such projects when it makes its determination of the basis of any need in these cases.  He adds that the Commission has from the beginning emphasized the importance of using existing rights-of-way and has asked the developers to refine their original proposals to further minimize impacts to adjacent landowners. Sullivan criticizes recommendations concerning cost.

“And perhaps most disturbing, the staff is recommending that the Hudson Valley, along with New York City and Long Island customers, bear 90 percent of the cost of this project, which could cost as much as $750 million, and that the customers, rather than utilities, bear 80 percent of any cost overruns,” Sullivan says.

The PSC spokesman, in an e-mailed statement, says ordinarily, under Federal Energy Regulatory Commission cost-recovery principles, ratepayers would pay for 100 percent of cost overruns. He says the risk-sharing proposal seeks to minimize these overruns by having developers absorb a share of the cost, giving them a financial incentive to avoid such overruns.

John Maserjian is spokesman for one of the developers – the New York Transmission Owners, which include Central Hudson, Con Edison, National Grid, and others. His group commented as well, suggesting that developers propose cost allocations rather than adhere to one already prescribed.

“We would like the opportunity to suggest or propose cost allocation based on the areas that will receive the greatest benefit,” says Maserjian.

He notes that November 14 is the deadline for filing new and modified proposals, and New York Transmission Owners are looking to further refine previously filed proposals as well as file alternate proposals, the latter to address concerns expressed by property owners.