Jan. 6 (Bloomberg) -- Governor Andrew Cuomo will propose cutting the approval process for some new power transmission lines to 10 months from about four years to speed expansion of the grid to meet growing demand in the New York City area.
Under the proposal, which Cuomo will announce during his Jan. 8 State of the State address, New York’s public service commission will create a rule that would expedite approval of plans to build power lines along existing right-of-ways, a person familiar with the speech said. The plan is meant to deliver power generated in northern and western parts of the state, using renewable sources such as wind, to New York City, the person said.
New power lines also would help expand the capacity for the most populous U.S. city as the federal license for a reactor at Indian Point Energy Center, a nuclear plant north of Manhattan, expires in 2015. Indian Point provides about 25 percent of New York City’s power.
“Anything that attracts additional capital and interest is going to be a net positive,” said Paul Steidler, a spokesman for the New York Affordable Reliable Electricity Alliance. “The question is if curtailing the review process is a game changer, and initially I’m skeptical it would be.”
New York is facing a $25 billion tab over the next 30 years to upgrade or replace 40 percent of its power grid, according to a 2012 report by the New York Independent System Operator, an Albany-based nonprofit. The delivery system is already unable to pass to the New York City area some of the power generated by wind farms, and hydro-electric and fossil fuel plants in upstate New York, costing customers $600 million annually, the person said.
Cuomo, a 56-year-old Democrat, has called for an “energy highway” that would connect the two regions, and his proposal could speed that along.
The state also has been working to reduce reliance on Indian Point, which Cuomo has said he’d like to see shuttered.
In October, the public service commission approved three plans to upgrade and extend transmission lines near New York City to boost delivery. They were coupled with an effort to reduce power use by some of the city’s biggest consumers.
Entergy Corp., the second-biggest U.S. nuclear operator, which owns Indian Point, said last month that it expects to get its license renewed.
The U.S. Nuclear Regulatory Commission has said Entergy can keep operating the reactor while the agency reviews the New Orleans-based company’s application for a 20-year license renewal that the state is fighting.
The transmission-line plan Cuomo will propose will require public hearings by the commission, though not legislative approval. The rule would only apply to power lines built along existing transmission paths or on land owned by the state, the person said. Any other proposal would still have to get approvals from communities through which the power line would pass, which can lead to lengthy delays and lawsuits.
James Denn, a spokesman for the PSC, didn’t respond to an e-mail and telephone call seeking comment.
Transmission line construction is done by private industry, and with electricity prices dipping, companies may not want to embark on new, costly projects, said Steidler, whose New York- based group represents business and labor organizations. The focus, he said, ought to be on developing sources of power closer to where it’s being consumed.
“It’s a formidable challenge in terms of cost and engineering to transport energy over long distances,” Steidler said. “You can enhance reliability by producing more power downstate.”
--With assistance from Mark Chediak in San Francisco. Editors: Sylvia Wier, Stephen Merelman