CHENANGO COUNTY – A Toronto-based investment firm – whose partners include the Canadian government at the federal, provincial, and municipal levels – has signed-on to back the $1.6 billion New York Regional Interconnect power line project, NYRI officials announced Thursday.
The firm, Borealis Infrastructure, mainly finances public/private infrastructure projects and manages a government pension fund in Canada. The company reportedly holds over $5.6 billion dollars in assets, investing mainly in transportation, energy, infrastructure buildings, pipelines, water and wastewater projects.
The full extent of the firm’s relationship with NYRI was not disclosed. Officials at Borealis did not return a message seeking comment by press time.
“We are excited about the opportunity of having Borealis Infrastructure join the NYRI Project development team because of their global experience with large projects that serve public need in growing economies,” said Bill May, project manager for NYRI.
Attorney David Smith, a member of the power line opposition in Sullivan County, says the Borealis deal reinforces the fact the NYRI, while listed as a New York state company with headquarters in Albany, is overwhelmingly a foreign project.
“They have a mail-drop in Albany,” Smith said, pointing out that American Consumer Industries, a Delaware holding company that has had controlling interest in NYRI, is actually owned by Toronto-based energy developers Colmac Power. “The entire financial investment behind NYRI is Canadian – it’s foreign.”
NYRI is proposing to construct a 190-mile-long, 1,200 megawatt transmission line from Oneida to Orange County by 2011, claiming it will relieve the electricity bottlenecks in the Hudson Valley and New York City. In response, thousands along NYRI’s nearly 200 mile route have come out in opposition to the project, fearing it would destroy the weakened rural economy and landscape.
Smith specifically questions the motives of Canadian investors that repeatedly claim to have New York’s energy interests in mind, despite the heavy opposition there.
“In an age of energy independence,” he said, “we’re destroying irreplaceable natural environments to profit foreign investors.”
NYRI says the power line would lower utility prices downstate and increase overall energy reliability. However, company officials have also admitted the project would likely cause utility prices to rise upstate, that its benefits to communities hosting the power line would be “intangible,” and, upon questioning last summer, that they were unsure if the proposal was for private interest or public good. In 2006, NYRI also failed to submit a completed Article VII power line review application to the state’s Public Service Commission. Among other infractions, PSC officials ruled the developer failed to prove how its project would increase electricity reliability.
Aside from having financial interest in bridges, tunnels, nuclear power plants, municipal power companies and host of other facilities in both Canada and the U.S., Borealis also invests in and manages OMERS, a Canadian pension fund for municipal workers, firefighters, police, transit workers and hydro workers.
The firm projects that its earnings will grow to $10 billion by 2010.
“The financial capabilities Borealis Infrastructure brings to the investment partner team will allow NYRI continuing resources to develop a successful transmission infrastructure project to meet the growing energy, economic and environmental needs for all of New York State,” May said.
The Toronto investment house also expects to take its financial capabilities well beyond New York state, stating that within the next three years it hopes 40 percent of its total investments will rest outside of Canada, mostly in Britain, Western Europe, and the U.S.
Borealis’ website states that investing in government-regulated infrastructure projects is safer than market speculations.
“Investments, especially in government-regulated sectors, can generate reliable returns that exceed those of the public markets,” the site states.
In June NYRI will be challenging a new law in Albany’s federal district court that blocks its use of state eminent domain to take private property. Also next month, NYRI is expected to re-file its Article VII application with the PSC.
Last month, the U.S. Department of Energy announced that nearly all of New York state, including NYRI’s route, are slated to become part of a National Interest Electric Transmission Corridor that would run north from Virginia. Within a corridor, power line projects can be reviewed and approved by the federal government even if they were denied at the state level.