Want To Build a N.Y. Power Plant? You’d Better Have Lots of Energy

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The New York Sun

While the city faces a looming electricity shortage, an application for an underground steam and electrical power plant on the East River waterfront in Brooklyn is gathering dust in an Albany office.


The owner of TransGas Energy, Adam Victor, has spent more than five years and $15 million of his own money trying to build the biggest new power plant in New York City in years, and he says Governor Pataki has failed to override local opposition and move the project forward.


“If Theodore Roosevelt was governor, if Rudy Giuliani was governor or mayor, this project would have been under construction already. If there was decisive leadership in the state, the project would already be under construction,” Mr. Victor said. “I am befuddled as to why Governor Pataki does not support it, and the only thing I can think of is that it is not on his radar screen.”


Mr. Victor, who owns and operates a large power plant near Syracuse, says the Brooklyn project would be completely privately financed, bring 1,100 megawatts of power to the system, stabilize energy prices, create a quicker mechanism for restarting the electricity grid if a blackout occurs, and create jobs. He said the facility would be the most environmentally friendly power plant to date.


He also said that because the plant would produce both electricity and steam – a process known as “cogeneration” – it would also provide a backup heat source for much of Manhattan, which relies on an unusual shared steam-heat system that could leave residents stranded in the cold if it failed.


The state has the ultimate authority on power plant siting because of laws designed to lessen the influence of local politicians on decisions about locating the unpopular facilities.


In September, it will be five years since TransGas began the state process, and there has been no movement on the application since July, when after about a year of legal wrangling, Mr. Victor was permitted to amend his application. He proposed putting the power plant underground in an attempt to allay community concerns. In April 2004, state officials recommended rejecting Mr. Victor’s initial application because it would interfere with the city’s plans to develop the Brooklyn waterfront.


Now Mr. Victor said the state is refusing to hold hearings on the amended plan.


A spokeswoman for Governor Pataki, Joanna Rose, said in an e-mail: “The project is under review by the State Board on Electric Generation Siting and the Environment.”


The 8-acre Brooklyn site is owned by Bayside Fuel Oil Depot, and is now home to a rundown oil storage and trucking terminal. Mr. Victor owns an option on the site until 2012. Community opposition to the power plant is strong.


Those opponents, so far, have included Mayor Bloomberg, who according to sources familiar with the project is dead set against the proposed site, which is central to the recently rezoned portions of Williamsburg/Greenpoint where the administration hopes to see booming residential and commercial development in the years ahead.


A spokeswoman for Mr. Bloomberg, Jennifer Falk, said: “The city remains opposed to the location of a power plant at the Bayside Fuel Oil site. Trans-Gas’s proposal presents significant land use impacts, thereby jeopardizing a once in a lifetime opportunity to reclaim nearly two miles of the Brooklyn waterfront, create thousands of new apartments, and over 25 acres of new parkland.”


In January, the New York Building Congress released an energy report that said the city needs to add 6,000 to 7,000 megawatts of new electricity resources by 2025. If not, the president of the Building Congress, Richard Anderson, said the city would face a spike in energy prices that would be devastating for business. He said city and state leaders are fully aware of the problem, but little or no action has been taken to prevent a future shortage.


“In terms of our looming electricity deficit, the TransGas proposal would fill a big proportion of it. It makes a lot of sense conceptually, but it has this location problem. And the mayor is not compromising on it,” Mr. Anderson said.


City officials cite an estimate of future electricity needs prepared by Con Edison in December 2005, which says the city would not need new electricity resources until at least 2012 to meet the expected increase in demand. It suggests the increased demand could be met by increased transmission lines from power plants outside the city.


A year ago, the state put out a request for proposals for a new city power plant. Mr. Victor turned in the Brooklyn proposal and was short-listed. No applicant has yet been selected, but Mr. Victor is pessimistic about his chances. He said the TransGas facility was the lowest bid, but “because of interference from the governor’s office, this offer hasn’t been awarded.”


“I cannot believe the governor is so weak to let a few hundred community activists in Greenpoint prevent him from doing what is right,” Mr. Victor said. “How will he stand up to Al Qaeda if he becomes president?”


A source familiar with the TransGas proposal said Mr. Victor’s prodding of Mr. Pataki, who has not moved the project forward but has not killed it, either, is an attempt to get the project moving before the next gubernatorial administration. Mr. Victor insists that the next governor will be likely to support the project.


The city’s Department of Planning and the City Council have adopted zoning changes that would convert the site into a public park. No matter what is built on the site, environmental remediation would be necessary to clean up from more than a century of industrial use.


In a pre-emptive move to kill the TransGas project, the city went to court last year to try to condemn the property for use as a park. That bid was turned down by a Brooklyn Supreme Court judge in December.


The city proposed another location for the TransGas plant, but Mr. Victor said the project will only work on the Brooklyn site because of its proximity to a Con Edison facility just across the East River in Manhattan. Discussions over another location are ongoing, according to city officials.


Last summer, TransGas made a $700 million bid for the West Side rail yards – by far the highest bid – in an unsuccessful attempt to tie the rail yards bid to a state approval of the power plant project.


Mr. Victor paid a $300,000 nonrefundable state application fee in November 2002 and a $100,000 fee to amend the application.


The rest of the $15 million he has spent pursuing the project has gone to lawyers and design and engineering consultants. In response to initial concerns that the plant would interfere with residential development or be a terrorism target, the plans were revised so that the power plant will be underground, beneath a park.


The New York Sun

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