Behind the Blackout

Thanks to deregulation, Queens merely a pawn in the utilities' board game

Con Ed, of course, puts a different face on the recent Queens debacle. "We did not meet our standards or those of our customers, and we understand their frustration," says spokesman Alfonso Quiroz. "We're going to continue to work on the reliability of our system, but we're one of the most reliable utilities in the country."

Asked whether Con Ed's incentive for maintenance has eroded—a crucial issue for an overtaxed system—Quiroz talks about "customers," saying, "Our incentive is our customers and getting them back in our system. They are our business and we take that very seriously."

The paradox affecting New Yorkers the most is that Con Ed, having effectively gotten out of the generation business under the deregulation plan, simply has to maintain the cables. Under deregulation, new companies are encouraged to purchase or build local power plants and sell the electricity to the local utility, which is to serve as a broker rather than a producer. The 2003 blackout—although it originated from a power surge in Ohio—was the first indication that New York's grid was seriously vulnerable. The Queens blackout shows that those vulnerabilities persist, says Slocum, who adds, "There's plenty of power to go around, but the grid was overloaded."

Queens residents are especially miffed that their borough hosts a disproportionately large share of the city's power plants, which have been the focus of local citizen campaigns around their health impacts. The three major plants in western Queens have all been sold off by Con Ed. The largest is the 1,750-megawatt Ravenswood Generating Station, owned by KeySpan Energy; the 1,090-megawatt Astoria Generating Station is owned by Reliant Energy, and the 1,600-megawatt Poletti Power Plant is owned by the public New York Power Authority (which actually purchased it from Con Ed when it was first built in the '70s).

Trying to keep track of the new network of ownership can seem like watching a game of musical chairs. KeySpan, owner of the massive Ravenswood, is the successor company to the Long Island Lighting Company (LILCO), which was forced to relinquish control of the grid in Nassau and Suffolk counties by state regulators in 1998 as the price of a bailout of its debt-crippled Shoreham nuclear power plant. Relieved of its Shoreham debt, LILCO's new incarnation moved from suburban Long Island to inner-city Queens. KeySpan is now seeking approval from federal and state authorities for its pending $11.8 billion takeover by the British energy giant National Grid.

In June 2000, after a brief blackout on Manhattan's Upper East Side, then City Council speaker Peter Vallone publicly suggested that Con Ed, in connivance with its new deregulation partners, was using power disruptions to pressure the PSC to approve yet more power plants for the city.

Peter Vallone Jr., the former speaker's son, is now councilman for Astoria, the neighborhood at the epicenter of last month's blackout. As a pro bono lawyer for the local Coalition Helping Organize a Kleaner Environment (CHOKE), Vallone fought in state court against the Power Authority during his election campaign in 2002. Under a settlement he won, the Power Authority agreed to phase out the dirty oil-burning Poletti generator in favor of a new, cleaner, gas-burning generator at the site. He still takes a hard line against any new power plants in Queens.

"This blackout had nothing to do with lack of power," Vallone says. "This is a transmission problem. They have a grid down there that was built postwar to handle the demand of a whole different era. And if new plants are needed they shouldn't be in a community that already has more than anywhere on the planet. This isn't about 'not in my backyard'—my backyard is already full. Western Queens was already providing 60 percent of the city's power before they started up Astoria Energy earlier this year. Now it's more like 65 percent."

Vallone had also fought that one, a 500-megawatt plant built by the firm SCS, and succeeded in stopping the state from allowing the use of Liberty Bonds— created for post–9-11 rebuilding—for its construction. Vallone charges that Governor George Pataki "rammed it through" against the wishes of the community. Additionally, the firm NRG has built small "peaking units" near the Poletti plant, and the Power Authority also runs mini-turbines near the 59th Street Bridge. These mini-turbines are supposed to be removed under the Poletti settlement.

When Vallone spoke with the Voice on July 31 he had just returned from hearing Con Ed CEO Kevin Burke testify before the City Council on the blackout. "In 1999 after the Washington Heights blackout," Vallone says, "they said the same thing they said at today's hearing, that they'd spend all this money and take care of the problem. I said at the hearing, 'We have absolutely no reason to believe anything you say to us.' We need a federal monitor over Con Ed."

He also calls for the resignations of the responsible parties at Con Ed. Asked for names, he replies: "The buck stops at Kevin Burke."

Con Ed's Quiroz responds to Vallone's call for a federal overseer by saying: "We understand his frustrations. We plan to continue working with him."

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