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."

illustration courtesy of Rex Babin/Times Union

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."

Indeed, under deregulation, Athens Gen can sell its power anywhere it likes—even out of state. "Special treatment can't be on the grounds that it's good for New York," says Westchester Democrat Richard Brodsky, chair of the assembly's environmental conservation committee. "These plants are no more relevant to New York than a plant that makes widgets in Nepal."

Last year, PG&E reported operating revenues of $20.8 billion. Athens, with a population of under 4000, lies in Greene County, where the average per capita income is $20,009. "This is not a wealthy community," says Laura Skutch, a part-time Athens resident and leading foe of the plant. "These power companies target areas where people don't have the resources to fight."

Indeed, the most potent weapon in the fight against PG&E isn't in Athens at all—it's on the other side of the Hudson, some five miles south as the crow flies. It's Olana, the spectacular home of 19th-century landscape painter Frederic Church, whose romantic renditions of the river and nearby Catskill Mountains made the Hudson River Valley world famous.

Admittedly, you can't see the Athens site from the Olana grounds at present—trees have grown up on the north slope since Church's day. Still, Olana is fiercely protective of its views: They help make it the second most popular tourist attraction in the Hudson Valley (after the Roosevelt/Vanderbilt site), bringing revenues to the area estimated at $9 million a year.

The perceived threat to Olana has sparked plenty of outcry—not only from environmentalists like Scenic Hudson, Clearwater, the National Resources Defense Council, and the Sierra Club, but from the New York State Office of Parks, Recreation, and Historic Preservation, the National Trust for Historic Preservation, and the Preservation League of New York State. Senator Daniel Moynihan requested a federal review. Even The New York Times weighed in, calling Athens Gen the "right plant" in the "wrong place" and declaring "it is essential to establish the principle that the environment has a claim in these decisions."

Of course, there are those who argue that the plant will ultimately help the environment—indirectly. Newer, gas-fired generating facilities are unquestionably less polluting than their nuclear and coal-fired predecessors. Athens Gen may also be cheaper to run—so much so, supporters say, that it could eventually help put the dirty old plants out of business.

But 'that is exactly what they said about nuclear plants in the 1960s," says Kevin Cahill, a Democratic assembly member from Kingston. And many of the coal-powered plants the nukes were supposed to replace are still running.

Last summer, when the governor's staff pushed a bill slightly amending Article 10 through the legislature, Brodsky and others fought for a provision requiring cleanups at old plants—to no avail. "All they did was allow Athens a glide path through the application process," says Cahill.

Even as the plant worked its way through the bureaucracy, PG&E waged a PR campaign in Athens. The company sponsored fireworks, a Christmas festival, a playground. It promised hundreds of construction jobs, plus an eventual supply of low-cost power that might spur local industry. (The plant itself will employ fewer than 30 people.)

PG&E's reps also schmoozed town officials. "They never had so much attention focused on them in their lives," says STOPP's Falzon. And what leverage did the town have when a state panel could override town laws? Eventually, the town board accepted PG&E's promise of $3 million for a "community trust fund" and promised not to oppose the plant. Last month, the board of Sleepy Hollow Lake, a development near the plant site, followed suit. When PG&E offered $350,000 toward lake improvements, the directors retracted their objections.

As the Siting Board's deadline grows near, opponents are working frantically to derail its decision. They argue that the Siting Board cannot legally issue all permits—that the DEC or Coastal Management or the Army Corps of Engineers may also have jurisdiction and should conduct studies that would slow the power juggernaut down. (Gordon's maneuvers forced DEC to hold the public hearing last week—but the agency seems disinclined to conduct an independent inquiry.)

A PSC spokesperson defends the Article 10 process, praising its environmental reviews as "substantial" and insisting plants are needed, since demand is expected to grow by an average of 1.2 percent a year. Ashok Gupta, senior energy economist for the NRDC, says that need could be met by three or four power plants—or perhaps even fewer, if the state beefed up conservation programs. "We came out against Athens, but will come out for others," he adds.

Whatever happens, the residents of Athens will bear the scars. The Teamsters have circulated a warning that the plant's enemies, well-off outsiders, want to turn tradesmen into "waitresses, domestics, and gardeners." At the hearing, several union men defended their right to jobs at good wages.

One electrician took on Frederic Church and Olana. 'He built himself a house on a hill to have a nice view—sound familiar?" he asked. "It's the wealthy looking down on the rest of us down in the valley." Opponents—natives and not, union and not, affluent and not—stood up to answer such charges. The DEC judge looked on impassively. Falzon blames PG&E for creating this mess. "It's divide and conquer," she says. "Something ugly and evil has entered this community."

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