On April 18, 2013, the New York State Public Service Commission (“NYPSC”) approved construction of the 1,000 MW Champlain-Hudson direct current transmission line.  When built, the Champlain-Hudson line is anticipated to deliver primarily hydroelectric power from Canada to New York City.

As designed, the 330-mile transmission line will be constructed primarily underneath Lake Champlain and the Hudson River, in order to minimize the potential environmental impacts of the line.  Construction of the Champlain-Hudson line is estimated to cost $2 billion.  However, the NYPSC noted that ratepayers are not required to assume the financial risks associated with construction of the line.  Instead, the Champlain-Hudson line is a “merchant” project, and the Federal Energy Regulatory Commission has already approved the use of negotiated rates for the sale of capacity on the line (see July 9, 2010 edition of the WER).

The approval of the Champlain-Hudson line is the result of three years of negotiations between Champlain Hudson Power Express, Inc. and CHPE Properties (“Applicants”), numerous state agencies and cities in New York, and several environmental advocacy groups, and other interested parties (see April 23, 2010 edition of the WER).  The NYPSC hailed the parties’ ability to reach a consensus on the line as a “remarkable achievement.”  With respect to the converter station that the direct current line needs in order to be connected to the alternating current bulk power system, that facility will be located in Astoria, Queens, under the terms of the NYPSC’s approval.

In approving the Champlain-Hudson line, the NYPSC highlighted that the new transmission line will offer significant benefits to New York City.  Specifically, the NYPSC stated that the line will enhance fuel diversity, create stronger transmission ties into New York City, increase the state of New York’s utilization of renewable energy sources, and reduce the possibility of existing suppliers exercising market power.  In addition to the construction of the line, the Applicants agreed to establish a $117.15 million trust for the restoration and enhancement of the Lake Champlain and Hudson River habitats.

On April 23, 2013, the Applicants responded to the NYPSC’s approval of the Champlain-Hudson line and accepted and agreed to comply with all conditions of the NYPSC’s Certificate of Environmental Compatibility and Public Need.

A copy of the NYPSC’s order is available here.