$1.9B Power Project Backers Expect to Begin Work Next Year

The proposed route of the Champlain Hudson Power Express transmission line.

By JOHN JORDAN

ALBANY – After several failed attempts to bring new power resources to the downstate region, a major renewable energy project appears to be making progress. If successful it would deliver two highvoltage electrical underground power cables to New York City from the U.S.-Canada border, stretching some 355 miles.

If approved by federal and state regulators the $1.9-billion Champlain Hudson Power Express project will provide a major benefi t to the trades in the Hudson Valley and particularly in southern Westchester, with construction to begin as early as the fall of 2011, CONSTRUCTION NEWS has learned.

Don Jessome, president and chief executive offi cer of Transmission Developers, Inc., said part of the project will be the construction of a converter/ substation in Yonkers. Mr. Jessome estimated the cost to build the converter/substation facility—at a vacant fi ve-acre parcel at the iPark complex near the Yonkers waterfront—will be approximately $200 million. Transmission Developers, headquartered in Toronto with an offi ce in Albany, is the proposed developer of the electric transmission line project. The Blackstone Group, a leading investment and advisory fi rm, is the lead investor in Transmission Developers and the Champlain Hudson Power Express project.

To put this endeavor in perspective, the Millennium gas pipeline project, which went on line back in December 2008, totals 182 miles and was said to have cost approximately $655 million to build.

Mr. Jessome said there are other similar projects of this size around the world including a transmission project spanning 370 miles that connects Norway to Denmark, a power line that went into service three years ago. “However, this would be the largest submarine transmission project in North America,” he noted.

The Champlain Hudson Power Express project was originally proposed back in February 2010 as a $3.8-billion venture that was to include a leg extending to Bridgeport, CT, but on July 6 the fi rm announced, “Thanks to strong interest expressed by power suppliers willing to make long-term commitments to the New York leg of the project and a lack of similar interest with respect to the Connecticut leg, the project will now focus solely on bringing new renewable power to the New York market.” According to the company’s project timeline, it hopes to obtain all necessary approvals by September 2011 and have the transmission lines in service by 2015. Company officials said the project would employ approximately 200 construction workers during peak periods and will take three years to complete.

The details of the project involve the construction of two 500-megawatt high voltage direct current (HVDC) bipole submarine transmission cables that will transport renewable power (hydro and wind) that will meet New York State’s growing demand. Company officials also stated that among the project’s benefits will be increased security of the electric grid and reduced energy costs for consumers. Unlike the failed New York Regional Interconnect power transmission project, the power cables will be buried for its entire length and will be installed in waterways including: Lake Champlain, the Champlain Canal system, and the Hudson River. Company officials said the lines will also be buried within portions of existing railroad right-of-ways. For example, so as to avoid the PCB clean-up site in the Hudson River, the lines will be taken out of the Champlain Canal North of Fort Edward, NY and buried along Canadian Pacific and CSX rail line right of ways for 73 miles, re-entering the Hudson River south of Albany below Selkirk, NY. Mr. Jessome said there is very little land acquisition required with this project and noted that the firm is currently in negotiations with all affected landowners.

The project was the subject of a number of public hearings held by the U.S. Department of Energy. Hearings were staged earlier this month in Bridgeport, CT, New York City, Yonkers, Kingston, Albany, Queensbury and Plattsburgh. The hearings were conducted as part of the Environmental Impact Statement process in order for the firm to obtain a Presidential permit from the U.S. Department of Energy. The company has also engaged in the Article VII approval process with the New York State Public Service Commission. Mr. Jessome said that hearings in regards to its application with the NYSPSC could begin as early as next month.

“We are working to have all of our permits in place by September 2011 and the reason I say that is because we are also in the DOE Loan Guarantee Program under the 1705 program. One of the requirements is that we have to be shovel ready and have a financial close by September 2011, so we are working very hard to get all of our permits in place by that date,” he added.

The Blackstone Group will be providing all the development financing to obtain all the necessary approvals and $500 million in equity financing for the venture. The Department of Energy’s Loan Guarantee Program can provide up to 80 percent of the debt financing for the project.

Yonkers Project

Mr. Jessome said that his firm is working with the city of Yonkers to finalize details on its proposed converter/substation facility. The facility, which he said would cost approximately $200 million to build, will be built in front of the Kawasaki building at the iPark complex. He added that the nearly five-acre site would be leased from the property owner National RE/sources of Greenwich, CT.

He said that the company is looking to secure a Project Labor Agreement and intends to hire union workers for the transmission line project.

“We are going out for our EPC (engineering, procurement and construction) contracts at the end of the month and that (unionized labor) will be a criteria for the EPC agreements,” Mr. Jessome said. “There will be two main groups that we are going out (to bid) to. The first is the cable manufacturers who will both manufacture and install the cable and second is the converter station manufacturers who will design and build the converter station.”

Suppliers Lining Up

While he would not name the power suppliers with whom he has negotiated, Mr. Jessome said, “We have already lined up customers that we believe will take 100 percent of the line either through the negotiated or open season process.”

The company recently reported it had received a favorable ruling from the Federal Energy Regulatory Commission that allows Transmission Developers to charge negotiated rates for the sale of transmission rights on the proposed line. FERC authorized the company to seek up to 75 percent pre-subscription from anchor customers.

This is part of the July 1, 2010 online edition of Construction News.

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