For
Immediate
Release:
Jeff
Lieberson
(Hinchey):
202-225-1265
April 3,
2008
Marion
Read (Arcuri):
202-225-3665
Meaghan
Smith (Hall)
--
202-225-5441
Eric
Bederman
(Clinton) --
212-688-9780
Hinchey,
Arcuri, Hall
& Clinton
Call On
Feds
To Reject
NYRI Request
For
Ratepayer
Subsidy
Washington,
DC --
U.S.
Representatives
Maurice
Hinchey
(D-NY),
Michael A.
Arcuri
(D-NY), John
Hall (D-NY),
and U.S.
Senator
Hillary
Rodham
Clinton
(D-NY) today
sent a
letter
strongly
urging the
Federal
Energy
Regulatory
Commission
(FERC) to
dismiss a
petition by
New York
Regional
Interconnect,
Inc. (NYRI)
requesting
ratepayer
subsidies
for its
proposed
electricity
transmission
project in
upstate New
York. These
rate
incentives
would
guarantee
NYRI's
investors a
high rate of
profit on
their
investment
for their
$1.8-2.1
billion
proposal and
would be
paid by
electricity
consumers.
The House
members and
the senator
said the
rate
incentives
amount to
nothing more
than an
unnecessary
and
exorbitant
subsidy of a
project
that's not
even wanted
or needed by
New York
residents in
the first
place.
NYRI has
petitioned
FERC to set
a project
life-time
rate of
return on
equity (ROE)
of 13.5
percent for
their
proposed
power line
under
provisions
contained in
the Energy
Policy Act
of 2005 that
Hinchey and
Clinton
voted
against.
The House
members and
the senator
declared the
request
unjustified
and
outrageous
and vowed to
fight
requested
ratepayer
subsidies
for the
ill-conceived
project.
"Despite
NYRI's
claims that
its proposed
transmission
line is
vital to the
energy
future of
New York
State,
recent
reports by
the New York
Independent
System
Operator (NYISO)
do not
identify the
development
of new
transmission
capacity
along NYRI's
proposed
transmission
corridor as
either
critical or
advisable to
ensuring
electricity
reliability
for New York
in the
coming
decade,"
Hinchey,
Arcuri,
Hall, and
Clinton
wrote in
their letter
to FERC
Chairman
Joseph T.
Kelliher.
"Faced with
broad and
vehement
opposition
from civic
organizations,
local
communities,
business
associations
and local
and state
government,
NYRI is now
relying on
efforts to
obtain rate
incentives
in order to
attract
financing
for its
failed and
senseless
project and
compete with
more viable
and
practical
alternatives
that can
attract
financing
based on
merit and
demonstrated
need. We
appreciate
your
consideration
in this
important
matter and
hope that
FERC will
summarily
dismiss
NYRI's
request for
rate
incentives
based on the
lack of need
for this
proposed
project and
the
potential
that such
incentives
could
disadvantage
and
undermine
more viable
alternatives."
Hinchey,
Arcuri,
Hall, and
Clinton
continue to
seek ways to
overturn the
Energy
Policy Act
of 2005,
legislation
that was
imposed by
the
then-Republican-controlled
Congress
which
authorizes
the federal
government
to provide
rate
guarantees
for specific
projects as
well as
override the
permitting
authority of
states for
proposed
electricity
transmission
projects.
In addition
to allowing
FERC to
consider and
provide
ratepayer-financed
special
incentives
for private
corporations,
the law also
allows the
Department
of Energy to
establish
so-called
"National
Interest
Electric
Transmission
Corridors" (NIETCs)
-- a
designation
that enables
the federal
government
to permit
transmission
projects and
authorize
the use of
eminent
domain in
states that
have
rejected
power line
projects
based on
lack of need
or public
interest.
Much of New
York has
been
designated
as a NIETC,
which could
enable NYRI
to move
forward with
its power
line
proposal
unless DOE's
authority is
legislatively
repealed or
blocked in
court. New
York State
is currently
seeking to
legally
overturn
this
designation
in federal
court.
NYRI is
proposing to
construct a
190-mile
high voltage
direct
current
(HVDC)
electric
transmission
line from
Oneida
County to
Orange
County, New
York despite
fierce
opposition
throughout
the
communities
through
which it
would run.
NYRI's
application
for a
Certificate
of
Environmental
Compatibility
and Public
Need has
been
rejected
twice as
incomplete
by the New
York Public
Service
Commission,
which has
also opposed
the NYRI
request to
FERC for
rate
incentives.
###
The full
text of the
letter from
Hinchey,
Arcuri,
Hall, and
Clinton
follows:
April 3,
2008
Joseph T.
Kelliher,
Chairman
Federal
Energy
Regulatory
Commission
888 First
Street, NE
Washington,
DC 20426
RE:
Docket No.
EL08-39-000
Dear
Chairman
Kelliher:
We are
writing to
express our
strong
opposition
to the
Petition for
Declaratory
Order for
Incentive
Rate
Treatment
submitted by
New York
Regional
Interconnect,
Inc. (NYRI)
to the
Federal
Energy
Regulatory
Commission
on February
12, 2008.
We
respectfully
urge you to
dismiss this
petition and
reject
NYRI's
requests for
rate
incentives
for its
proposed
electric
transmission
line from
Oneida
County to
Orange
County in
New York.
As you know,
NYRI has
petitioned
FERC to set
a rate of
return on
equity (ROE)
of 13.5% for
the life of
its
transmission
project. As
an
alternative,
NYRI has
requested a
13.5% ROE
for the
first three
years of the
project
along with
ROE basis
point
incentives
after that
time. These
requests for
rate
incentives
under
provisions
of the
Energy
Policy Act
of 2005 are
unjustified
and wholly
inappropriate
in this
circumstance.
NYRI has
failed to
show that
its proposed
project is
warranted
and
necessary to
meeting the
electricity
needs of New
York State
or the
Northeast
region. The
proposed
NYRI project
would in
fact
undermine
State
efforts to
manage and
meet future
electricity
demand in a
rational and
sustainable
manner.
The granting
of rate
incentives
by FERC for
NYRI's
proposed
transmission
line would
advantage
this highly
speculative
and poorly
conceived
proposal in
attracting
financing,
possibly to
the
detriment of
alternative
projects
that would
in fact help
to meet New
York's
growing
electricity
needs more
responsibly
and
intelligently.
Despite
NYRI's
claims that
its proposed
transmission
line is
vital to the
energy
future of
New York
State,
recent
reports by
the New York
Independent
System
Operator (NYISO)
do not
identify the
development
of new
transmission
capacity
along NYRI's
proposed
transmission
corridor as
either
critical or
advisable to
ensuring
electricity
reliability
for New York
in the
coming
decade.
Faced with
broad and
vehement
opposition
from civic
organizations,
local
communities,
business
associations
and local
and state
government,
NYRI is now
relying on
efforts to
obtain rate
incentives
in order to
attract
financing
for its
failed and
senseless
project and
compete with
more viable
and
practical
alternatives
that can
attract
financing
based on
merit and
demonstrated
need.
We
appreciate
your
consideration
in this
important
matter and
hope that
FERC will
summarily
dismiss
NYRI's
request for
rate
incentives
based on the
lack of need
for this
proposed
project and
the
potential
that such
incentives
could
disadvantage
and
undermine
more viable
alternatives.
Sincerely,
Maurice
Hinchey
Hillary
Rodham
Clinton
Michael A.
Arcuri
John Hall