Shock Corridor

How a Long-Dormant Law Could Spark a Hudson Valley Power Plant Boom

Eight hours into a public hearing at a local high school auditorium last week, the citizens of upstate Athens, New York, were still streaming to the microphone. They had come to speak up about the massive power plant a giant corporation plans to put in their backyard. Some 70 people protested the plant. Ten defended it.

Another 30 signed up to speak, but were gone—home to tend to the kids, probably—before their names were called. All this, when the plant's key opponents fear the project is already a done deal.

"I always maintain optimism," sighs Susan Falzon, leader of Stand Together Oppose Power Plant (STOPP), a local group. "But basically this is between the Public Service Commission, the Department of Environmental Conservation, and the company."

That company is PG&E Corporation, which says it will spend $500 million to build the country's biggest natural-gas-fired electric-generating plant in this small Hudson River town. Athens Generating, once called U.S. Generating, whose 1080 megawatts could power a million homes, will be the first "merchant plant" to be built in New York State—a private facility built for private profit.

It is also the first plant up for approval since the state began deregulating the electric power industry in the 1990s. As a result, it has triggered a long-dormant provision in the state public service law—Article 10, which provides one-stop permit shopping for power companies. Rather than visiting multiple agencies to request multiple approvals, power companies appear before a special Siting Board, which promises to issue or deny a "certificate of environmental compatability and public need" within a mere 12 months. The law describes this process as "unified and expedited," but critics charge it sacrifices a thorough review of environmental issues for speed. So far, says David Gordon, a senior attorney with Riverkeeper, "the state review process has demonstrated itself to be pretty alarmingly one-sided."

And that could have major ramifications, because after two decades in which no new power plants were built, there are now a whopping 27 projects—some brand new and some merely expansions of existing facilities—in the works in New York State. Fourteen of these are already taxiing behind Athens on the Article 10 runway. Five are in New York City. And seven are proposed for the Hudson Valley.

Under Article 10, all proposed large power plants are exempt from the state environmental quality review act, or SEQRA. Power companies thus escape SEQRA's stronger mechanisms for input and control, Gordon says. Moreover, the SEQRA process can trigger environmental impact statements, which may take years to complete. Such lengthy investigations don't mesh with Article 10's fast track. "Here's a riddle: What's the difference between a power plant and a golf course or a warehouse?" said one speaker at the recent hearing. Her answer: Only a power plant can avoid an EIS.

At the meeting, speaker after speaker insisted that the Athens Gen proposal cries out for some serious environmental study. How will this plant's intake and discharge of Hudson River water affect spawning shad? Could pollutants in its steam poison growing kids? Will the "behemoth inferno," as one man described it, lower property values? Will it help or hurt local business? Will the sight of its huge smokestacks discourage tourism?

It's impossible to know which if any of these concerns might be justified. But two examiners appointed by the Siting Board are satisfied that everything will be fine. In September, they recommended that the full board approve Athens Gen. If the supposedly river-loving Pataki administration and the Siting Board have their way, the matter of the Athens plant will be resolved before the end of this month.

Article 10 and its one-year clock have actually been in place since 1993. But when it was written, utilities were regulated, and Article 10 specified that companies couldn't consider new capacity unless they proved there was "public need" for additional electricity. And there wasn't. In 1998, however, PG&E came to the Public Service Commission's judges and asked them to reinterpret Article 10's language—to declare, in essence, that any new merchant plant could be said to meet a public need, since increased competition among power suppliers might one day lower consumer electric bills.

The PSC agreed. "We've now lost one of the key offsets from creating these monstrosities along the Hudson River," says Gordon of Riverkeeper.

Under SEQRA, a number of agencies retain the authority to issue permits. When Article 10 is invoked, however, the Siting Board usurps nearly all of them. That board is dominated by the PSC—the very agency charged with opening New York power markets to competition. The head of the PSC is by law the chair of the Siting Board. The board's staff comes from the PSC. It has five permanent members, plus two representatives from the affected community—whose appointments come courtesy of the governor.

The result? "The Siting Board has a bias that leans toward development," says Congressman Maurice Hinchey, whose district lies just south of Athens.

That bias makes the Siting Board's sweeping authority particularly disturbing. The Athens plant site is zoned "light industrial," but so what? If board members find that unreasonable, they can simply override it. "It feels like eminent domain," says Falzon. "But this is for a private, for-profit corporation."

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