N.Y. Approves Transmission Line Said to Reduce Ability of Wholesale Suppliers to Exercise Market Power

The New York State Public Service Commission has approved the construction and operation of the Champlain Hudson Power Express Project, a 1,000 megawatt (MW) transmission line stretching 330 miles from the Canadian border to Astoria, Queens, primarily through Lake Champlain and the Hudson River.

"A critical factor in the Commission's decision to approve the project is the fact that the financial risk to ratepayers is minimized since ratepayers will not be required to assume the financial risks to build the project; ratepayers will be protected from construction and operation costs," the PSC said in a news release.

"The addition of a major new supplier would help reduce the ability of various players to exercise market power. New York City is an area with pivotal suppliers having the ability to exercise market power, but suppliers are constrained by federal market rules," the PSC added.

Independent power producers had opposed the grant of a Certificate of Environmental Compatibility and Public Need for the line.

Aside from facilitating the import of Quebec hydropower into New York City, the PSC said that, "[t]he new power line would help reduce strain on the gas transportation system by allowing imports of electricity from outside the city." The PSC noted that demand for natural gas use is increasing in New York City due to increased use of gas for electric generation and the gas conversion needs resulting from New York City's phase out of use of #4 and #6 oils for home and business heating purposes. The increase in gas demand could strain the gas transportation system into and within New York City, the PSC said.

The line is to terminate at a converter station located in Consolidated Edison's Astoria annex. From there, one high voltage, alternating current (HVAC) circuit will connect, via underground conduit, to the nearby substation of the New York Power Authority (NYPA).

From the NYPA substation, another set of HVAC cables will be located under the streets for about three miles to Con Edison's Rainey substation.

Case 10-T-0139