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New York PSC approves 1,000-MW Québec-NY City power line

By Scott DiSavino

(Reuters) - The New York Public Service Commission on Thursday approved a plan to build the Champlain Hudson transmission line, which will be capable of moving 1,000 megawatts of hydropower from Québec to New York City.

The project will create an average of more than 300 jobs during the 3-1/2-year construction period and cost an estimated $2.2 billion, Transmission Developers Inc, a privately held unit of Blackstone Group LP, said on its website.

Transmission Developers said it would use high-voltage direct current technology for the line, which the PSC said would be like a giant extension cord from Québec to New York City.

The 335-mile (539-km) line will be built under Lake Champlain and the Hudson River and will run underground along railroad tracks and other rights of way to minimize the visual and environmental impact.

The PSC said the project could provide up to 10 percent of the power used in New York City and would probably reduce power costs there and in the rest of the state.

The project developers, not the state's electric ratepayers, will fund the power line's construction, the PSC noted.

The PSC also said the line would cut emissions by reducing the amount of power the city generates at its oil and natural gas fired plants.

But not everyone supports the project.

New York Affordable Reliable Electricity Alliance, an advocacy group whose members include major consumers, producers and distributors of electricity in the state, sees electricity rates rising because of the project.

"The PSC's decision means New Yorkers will annually send billions of dollars to Canada for a product that we can make less expensively and more reliably in New York," Jerry Kremer, chairman of New York AREA, said in a statement.

Québec's provincial power company Hydro-Québec is expected to contract for 75 percent of the capacity of the line under a long-term agreement. Transmission Developers said it will hold an open season for the other 25 percent of capacity, likely over the summer.

Transmission Developers President and CEO Donald Jessome told Reuters the company still needed a few federal permits, a final engineering, procurement and construction (EPC) contract and a final transmission services contract for the deal.

He said they expect to have the permits by the fourth quarter of 2013 and the transmission services agreement with Hydro-Québec within the next few months. Everything should be done by the first quarter of 2014, allowing the company to start construction in 2014 and complete the project by late 2017.

Hydro-Québec will develop the part of the line located in Québec. The line will connect a Montréal-area substation owned by Hydro-Québec to a substation in Astoria, Queens, owned by Consolidated Edison Inc.

(Reporting by Scott DiSavino in New York; editing by Leslie Gevirtz, Lisa Von Ahn, G Crosse)

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