Cuomo's Regulatory Chief Sets Precedent for Protecting Environment and Ratepayers

New York's Public Service Commission (PSC) recently rejected a proposal to build an energy-intensive and polluting desalination plant on the Hudson River, finding there is no near-term need for the facility to meet Rockland County's drinking water demands. Instead of moving ahead with this project--which would have withdrawn and processed 10 million gallons of brackish water from the Hudson each day and spewed 100,000 gallons of briny wastewater back into Haverstraw Bay, one of the river's prime fish habitats--the PSC directed the private water company seeking to construct the plant to investigate water conservation and other sustainable measures. The PSC also declined to authorize a $60-million ratepayer surcharge the water company sought to recoup its planning costs--before a single shovel hit the ground.

PSC Chair Audrey Zibelman, appointed by Gov. Andrew Cuomo, showed through this decision that she has the courage to stand up to a major industrial company pursuing an ill-conceived project that fails to offer positive benefits and entails high costs, to ratepayers and the environment. This important ruling has implications for another decision facing the PSC--whether to green-light plans to build new high-voltage transmission lines through the Hudson Valley under Gov. Cuomo's Energy Highway initiative.

These lines, expected to rise up to 165 feet, are proposed to cross 25 towns in seven Hudson Valley counties, slicing through farms, homes, businesses, historic sites and spectacular views--the foundation of the region's rebounding economy. For the last year, the Hudson Valley Smart Energy Coalition--a broad-based group of elected officials, businesses and conservation organizations partnered with Scenic Hudson--has advocated for less expensive and more sustainable options to strengthen New York's power grid without damaging our region.

Gov. Cuomo has publicly acknowledged he understands our concerns about the lines' impacts on views, property values and the economy. In his 2014 State of the State address last January, he expressed a preference for having lines built within existing utility corridors. But in the year since, the PSC has failed to make this a requirement of any project that's ultimately approved.

Beyond these concerns, there's a more basic question: Is there a need for the new transmission lines?

Under the planning process of the New York Independent System Operator (NYISO), which oversees the state's electric grid, there are three possible rationales to authorize energy projects--1) to improve the reliability of the grid; 2) to provide economic benefits; or 3) to meet a public policy goal. The proposed transmission lines fail on all three counts.

Let's explore them one by one:

First, reliability--or ensuring the lights stay on: The NYISO recently stated that New York's electrical grid meets reliability standards. According to its latest Needs Assessment, the earliest date more electric capacity might be required is 2022. And just last week, the NYISO withdrew its request for proposal for new projects to meet reliability criteria--issued less than two months ago--indicating the system has sufficient existing facilities.

Second reason, economic benefits: A major goal of the Energy Highway is to reduce electricity costs in New York City and the surrounding Metropolitan Area by increasing transmission capacity to relieve a "a bottleneck" that makes it expensive to carry power from central New York to downstate customers. But congestion costs--the price of meeting consumers' needs based on available electricity--have been decreasing for the last five years, a trend expected to continue. This means that annual expenses to operate and maintain the proposed $1.3-billion transmission lines would very likely be higher than the savings they generate. With ratepayers paying 90 percent of construction costs and 80 percent of cost overruns, the utility developers would be receiving a generous return on investment with almost no risk. Homeowners and businesses would pay the cost with no benefit.

Finally, public policy: There is no policy--no local, state or federal law--that justifies building new transmission lines through the Hudson Valley.

Dr. Gidon Eshel, a Bard College geophysics professor and an expert in data analysis and efficiency metrics, conducted his own, independent study this past summer. He relied on NYISO data and additional factors that could affect future energy demand, including climate change, demographic trends in energy use and different scenarios for continued operation of the Indian Point nuclear facility in Westchester County. Dr. Eshel concluded there is no need for the new transmission lines for more than two decades.

Gov. Cuomo and his PSC Chair have launched a parallel proceeding to the Energy Highway known as the Reforming the Energy Vision, an unprecedented plan to reward utilities that tap power sources close to customers and help them increase efficiency and reduce electricity demand, especially during peak periods. The Cuomo administration's "energy czar," Richard Kauffman, laid the groundwork for achieving this vision by establishing the NY Green Bank. It's attracting private financial partners to invest in clean energy projects, with the first seven projects to receive funding announced last month.

Just as Gov. Cuomo's PSC did the right thing in saying "no" to a desalination plant that would hurt ratepayers' pocketbooks and mar the environment, the PSC should steer the proposed new transmission lines toward the off-ramp of the Energy Highway. Sometime in 2015, the commission should reach important conclusions about the Reforming the Energy Vision--no doubt providing a plan for meeting New York's energy needs while protecting the beauty, integrity and economy of the Hudson Valley.