NORWICH – State Attorney General Andrew Cuomo is urging the federal government to dismiss New York Regional Interconnect’s request for guaranteed profits, according to a letter his office sent out Tuesday.
Cuomo argues NYRI’s petition – asking for a 13.5 percent annual rate of return for three years – is “premature,” “unjustified” and “excessive.”
Power line officials say they’re only following the precedent set by Washington and fellow transmission investors.
“In short,” states Cuomo, “NYRI’s request asks New Yorkers not only to bear the considerable threats posed by the NYRI (power line) to New York’s environment and to New York’s property, but also guarantee NYRI an excessive profit.”
NYRI officials contend their project – a 400,000 volt power line that would run from Utica to Orange County – is the biggest electricity upgrade proposed in the state in 25 years. They claim it would reduce electricity rates in metropolitan New York, prevent future blackouts and open the grid to environmentally friendly power sources, like windmills.
Based on requirements set by the Federal Energy Regulatory Commission, the agency that oversees return rate incentives, Cuomo says NYRI hasn’t proven its project will benefit anything.
“A party applying to FERC for rate incentives for transmission facilities must show, among other requirements, either that the facility will ensure transmission grid reliability or that the facility will lower power prices by reducing transmission congestion,” Cuomo states. “NYRI can’t base the petition on a presumption that its proposal will support transmission reliability and reduce power prices. This presumption is available only if a state siting authority has approved construction. Here NYRI has not even completed its application to the New York siting authority, much less received state approval that would support any presumption before FERC.”
The state Public Service Commission, New York’s power line authority, has ruled NYRI’s permit application deficient for lacking required information three separate times, which is not uncommon, PSC officials have confirmed.
When asked to respond to the Attorney General’s claims, NYRI released this statement: “NYRI’s filing is in full compliance with FERC precedent, and we expect that the FERC will give our request appropriate consideration.”
Under the 2005 Energy Policy Act, FERC can grant incentives, like guaranteed rates of return, to transmission investors such as NYRI. The rates are paid for by wholesale energy customers. This is meant to encourage investment in power line projects nationwide.
So far, 22 requests for rate incentives have been whole or partially approved since July 2006, according to FERC’s Web site. Seven have been fully or partially denied.
When filed in February, NYRI’s petition for a guaranteed rate of return was ruled deficient for lacking information, including a justification for it being 13.5 percent.
Backed by that ruling, Cuomo added that any determination by the feds would prematurely undercut state law and grant “excessive” returns that NYRI has yet to justify.
FERC also has the right to approve power line projects that have already been denied in a state – like New York – that’s inside what’s called a “National Interest Electric Transmission Corridor.” A controversial policy, the corridors were established to fast-track power line investment in what the federal government has called “critically congested areas.”
NYRI’s power line, estimated to be a $2.2 billion investment, would run through 44 miles of Chenango County.
Locally, power line opponents fear the facilities would ruin landscapes, lower property values, weaken the economy and pose serious health risks.
NYRI says it would add millions to the local tax rolls and boost the economy with temporary construction jobs and sales in surrounding communities.