Hinchey, Arcuri, Hall & Clinton Blast Decision by Federal Energy Regulatory Commission

Press Release

Decision Would Force Rate Payers to Subsidize New York Regional Interconnect's Proposed Electricity Transmission Project In Upstate New York

U.S. Representatives Maurice Hinchey (D-NY), Mike Arcuri (D-NY) and John Hall (D-NY) along with U.S. Senator Hillary Rodham Clinton (D-NY) today condemned the decision by the Federal Energy Regulatory Commission (FERC) that would force ratepayers to subsidize New York Regional Interconnect's (NYRI) proposed electricity transmission project in Upstate New York. In April, the four Members of Congress sent a letter to FERC urging the agency to reject NYRI's request for the ratepayer subsidy.

On February 12, 2008, NYRI petitioned FERC to set a project lifetime rate of return on equity (ROE) of 13.5 percent for their proposed power lines under provisions contained in the Energy Policy Act of 2005, which Hinchey and Clinton voted against. FERC released its decision today conditionally approving NYRI's petition for rate incentives, contingent upon approval of the project by the New York Public Service Commission (PSC.) While not specifically setting the final rate of return, FERC granted a rate incentive of 2.75% above a "reasonable return," that has yet to be determined. According to FERC, these incentive rates would help to attract investors to the massive $2 billion project, which faces vehement community opposition and serious regulatory hurdles.

"It is outrageous that FERC has required rate-payers to subsidize a project that is neither warranted nor wanted by the residents of New York," Hinchey said. "This is just another example of how the Bush administration has consistently behaved in ways that are in opposition to the best interests of the American people. This is why we need a new president, one who will operate and make decisions with the best interests of the people in mind, not the best interests of corporations inside this country or as in this NYRI case, outside this country in Canada."

"Clearly this is an attempt to prime the pump for this irresponsible project, and I am baffled at how FERC can arrive at this decision before we have any evidence the project will be needed or useful," Hall said. Furthermore, it doesn't make any sense in the current economy for FERC to vote to put taxpayer dollars on the line to cover another bad corporate bet."

"I find this decision by FERC - and this Administration that supports it - to be an unconscionable and indefensible burden on taxpayers," said Arcuri. "We all know the NYRI project will raise electric rates for consumers in Upstate New York, and to force local citizens to guarantee profits for NYRI's secret shareholders is equally unacceptable. I will continue to fight the NYRI proposal every step of the way."

"Not only does FERC's outrageous decision completely ignore the concerns and wishes of many New Yorkers, it actually forces them to pay for a project they don't want. Throughout this process, NYRI has shown no regard for the communities that will be directly affected by their proposal. I will continue opposing this plan and standing up for New Yorkers, who should have the final word on this issue," said Senator Clinton.

Hinchey, Arcuri, and Hall 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.