http://www.nytimes.com/2011/03/02/nyregion/02power.html?partner=rss&emc=rss
Deal Is Reached for Line Under Hudson Giving the City a New Source of Electricity
PATRICK McGEEHAN
After being pressed by Gov. Andrew M. Cuomo and other elected officials, New York City has struck a deal that would end months of wrangling over a plan to send electricity to Manhattan from New Jersey, people involved in the negotiations said Tuesday.
Faced with a deadline of Monday to complete a proposed deal for a power cable under the Hudson River, city and state officials negotiated through the weekend to decide how to share its costs. The talks culminated in a telephone discussion between the governor and Mayor Michael R. Bloomberg on Monday afternoon, the people involved said.
In the end, the city agreed to make payments starting at about $2 million annually and rising over 20 years, they said. In exchange, the city will get the benefit of an additional source of electricity that will make its power grid more reliable and provide access to power from new sources, including renewable sources like the wind.
Officials at City Hall, in the governor’s office and at the New York Power Authoritydeclined on Tuesday to discuss details of the agreement because it had not been signed. It must still be approved by the directors of the power authority, who are not scheduled to meet again until March 29, but could hold a special meeting sooner.
Larry Schwartz, an aide to Mr. Cuomo, was involved in the talks through Monday, people involved in the negotiations said. New York’s two senators, Charles E. Schumer andKirsten E. Gillibrand, also expressed support for the project to the mayor, as did the City Council speaker, Christine C. Quinn.
All of those officials were concerned that the city might not have enough power to keep lights and air-conditioners on during periods of peak demand. Some also said they believed the outside power could hold down rates for electricity in the city.
“This project is hugely beneficial to New York City because it brings a significant new source of power to bolster an already strained grid, it will sustain economic growth and it will facilitate more competition to help control rates,” Mr. Schumer said.
The power would come through a seven-mile-long cable connected to the large grid that supplies electricity to New Jersey and other neighboring states. It would end at a Consolidated Edison substation on West 49th Street, in a neighborhood that is among the top users of power in the country.
The cable would be built by a private developer at a total cost, including upgrades to power lines in New Jersey, of about $850 million, said Edward M. Stern, president of PowerBridge, the developer’s parent company. It would deliver up to 660 megawatts of electricity, or about 5 percent of the power consumed by New York City on the hottest summer days.
The project has been in the planning stage for several years, but it has encountered regulatory and bureaucratic obstacles. The current proposal piggybacks on an earlier idea from a different developer that eventually withdrew. That idea, in essence, was to run an extension cord from a power plant in North Jersey to the 49th Street substation.
In 2006, PowerBridge stepped in with a plan to connect the city to the regional power grid. Doing so would allow city and state agencies, like the Metropolitan Transportation Authority, to order power from a variety of sources west of the Hudson. Often, that power is significantly less expensive than electricity generated in the city.
The metropolitan area consumes much more power than it produces, so officials are going to greater lengths to arrange a new supply. Long Island now gets about one-fifth of the power it uses through a cable strung across the floor of the Atlantic Ocean from Sayreville, N.J. That cable, known as the Neptune project, was also built by PowerBridge.
If the power authority’s board approves the agreement, Mr. Stern said, construction could begin in early May. He said that the work would take about 27 months and that the project would employ about 200 people during the period. Power could be flowing to the city in time for summer 2013, he said.
The developer faced a final deadline this week to procure the services of the companies that would make and lay the cable under the river, Mr. Stern said. Had an agreement not been reached this week, he said, the project might have been scrapped.
Once the cable reaches the Manhattan shore, a construction crew will have to thread it under the West Side Highway to 52nd Street, then down 12th Avenue to the substation between 49th and 50th Streets.
“We are delighted that the state and the city have reached agreement,” said Barry S. Sternlicht, chairman of Starwood Energy Group, an investment firm behind the cable project.
He said the project would accomplish three of Mayor Bloomberg’s long-term goals for the city by “lowering the cost of energy, providing greater reliability and energy security and affording New Yorkers access to renewable power.”
A version of this article appeared in print on March 2, 2011, on page A19 of the New York edition.
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