THE BLOG
05/23/2014 01:42 pm ET | Updated Jul 23, 2014

Meeting NYC's Energy Needs Can't Come at Hudson Valley's Expense

The U.S. Court of Appeals for the Second Circuit has given the Federal Energy Regulatory Commission (FERC) until May 27 to respond to a lawsuit filed to halt the recent implementation of a new "capacity zone" throughout much of New York's Hudson River Valley. The capacity zone results in a five- to 15-percent increase in electric rates for homeowners and businesses, with the windfall -- more than $200 million annually -- filling the coffers of big energy companies.

Intended to provide incentives for energy producers to increase power generation near users in the New York Metropolitan Area, the capacity zone -- proposed by the New York Independent System Operator (NYISO), the agency that oversees transmission lines throughout the state and dispatches wholesale power from generators to meet customer demand -- is on a collision course with Gov. Andrew Cuomo's Energy Highway initiative, which also seeks to increase electricity supplied to New York City. The governor's plan would open up "bottlenecks" in the transport of electricity from upstate and western New York power plants to downstate users by building new transmission lines through the Hudson Valley, one of the country's first Congressionally designated National Heritage Areas.

These competing energy strategies come at a time when electricity demand nationwide has flattened out, meaning utilities are scrambling to find new sources of return for their shareholders' investments. Ironically, the NYISO's board is largely composed of utility insiders, including a chairman whose career includes two decades at New Orleans-based Entergy. Even more curious, Entergy -- whose outdated Indian Point nuclear plant on the Hudson River is targeted for closure by the governor and many environmental groups -- will be a prime beneficiary of the NYISO-sponsored rate hike.

Under the Energy Highway initiative, the state Public Service Commission (PSC) solicited proposals for the construction of high-voltage transmission lines capable of carrying 1,000 megawatts of electricity. Three energy developers submitted proposals to create new utility corridors. Featuring towers as high as 165 feet, their lines would pass through 25 Hudson Valley towns. (A fourth proposal would upgrade existing lines and underground any new ones deemed necessary.)

The utility corridors would directly impact many farms and orchards that provide fresh, healthy produce to valley residents and New York City's greenmarkets, restaurants and soup kitchens. Homeowners along the corridors -- both Manhattan-based weekenders and local residents -- have seen real estate values slashed and transactions scuttled by the potential threat of new towers and fear their land will be taken by eminent domain. The lines also endanger historic sites and scenic vistas essential for sustaining the region's $4.75-billion tourism economy, as well as critical wildlife habitats.

The capacity zone and transmission lines have one thing in common -- they've attracted plenty of opposition. The lawsuit against the FERC was filed by the regional electric utility Central Hudson Gas & Electric Corporation, Dutchess County and the PSC. U.S. Sen. Charles Schumer, Scenic Hudson and other officials also have called on the FERC to reverse its order allowing the May 1 rate hike.

At the same time, Scenic Hudson, municipal officials, farmers, grassroots community groups and local land conservation organizations have formed the Hudson Valley Smart Energy Coalition to formally intervene in the PSC proceeding relating to the new transmission lines and advocate for alternatives that would strengthen the state's energy system without damaging property values and community character. The coalition also has raised questions about the underlying premise that 1,000 megawatts of new capacity will be needed after the implementation of previously approved transmission projects, downstate conservation initiatives and a separate PSC proceeding aimed at developing a new vision for the state's energy system.

In January Gov. Cuomo called on the PSC to expedite transmission projects that stay wholly within existing utility corridors in height, width and length. While this new approach doesn't apply to the pending Hudson Valley proposals, the PSC has encouraged those developers to submit new plans that would strive to stay within current rights-of-way. So far, one developer, National Grid, has indicated its redesign will eliminate the need for acquiring land by eminent domain. But under its $1.3-billion proposal, new towers still will be 40 feet higher than existing structures. The two other developers have yet to withdraw their plans to construct new utility corridors, so a dark cloud continues to hang over properties and communities along all of the proposed routes.

Does meeting New York City's demand for electricity have to come at the expense of the Hudson Valley? Not if the following happens:

The PSC should explicitly require any new transmission lines deemed necessary to stay within the footprint and height of existing utility structures, require undergrounding of new and current lines wherever feasible, and immediately reject all proposals that fail to meet these requirements.

The FERC should indefinitely suspend implementation of the new capacity zone.

Lawmakers and policy leaders should look more carefully at the NYISO, whose policies and pronouncements are shaping the entire energy market -- without apparent accountability.

Finally, federal and state agencies must work together on a comprehensive energy plan that doesn't pit one region of the state against another, that incorporates the latest data on both supply and demand, and incorporates rooftop solar, energy conservation and other technologies that represent the next generation, much as cellphones have replaced rotary-dial telephones in the communications sector.

In April Gov. Cuomo announced his intention to create a "21st century power grid" that will enable New Yorkers to "better manage and reduce their energy costs while protecting and preserving the environment." That's the right goal, but the new capacity zone and current transmission initiative don't put us on a path to achieve it. Both should be scrapped until all key stakeholders can agree upon a plan that will.