2/05/2007

NYRI to sue NY over eminent domain law: Business Week, 2/1/07

By Mark Johnson

The company that wants to build a high-voltage transmission line from central New York to the New York City suburbs said Thursday it will ask a federal court to throw out a state law that would restrict its use of eminent domain to secure land for the project.

Albany-based New York Regional Interconnect Inc. says the proposed 200-mile, $1.6 billion line from the Utica area to the lower Hudson Valley would deliver electricity to an area where power demand is expected to outstrip supply in a few years.

In October, Gov. George Pataki created a major obstacle to the project by signing a law restricting NYRI's use of eminent domain. Without the ability to force property sales, the company would have little chance of securing all the necessary land to complete the line, project manager Bill May said.

In a suit to be filed in federal court in Albany Thursday, NYRI contends the law discriminates against the company and violates its rights under the U.S. Constitution. NYRI also argues that the new law infringes its rights to equal protection and due process.

"The law seeks to individually punish NYRI for a project intended for a public need," May said.

A number of upstate New York public officials have opposed the project. They argue the proposed route through many small upstate communities would affect scenic areas and harm both the environment and local economic development. They also contend upstate residents would see their electric bills rise as more power is directed to the New York City area.

"From a public policy standpoint, a for-profit company should not have the right of eminent domain where they raise the rates of constituents upstate and lower the rates of constituents downstate," said state Sen. John Bonacic, an Orange County Republican.

Bonacic said lawyers for the Legislature and Pataki reviewed the statute and determined it was constitutional.

NYRI, a closely held company, said this week it is looking at some alternative routes to comply with an order from the state Public Service Commission, which oversees utilities. The alternatives include a route that follows the state Thruway, May said.

In just two years, the lower Hudson Valley and metropolitan New York will need an extra 500 megawatts of capacity, either from new transmission, new power plants, or energy conservation, according to the New York Independent System Operator, which controls the state's power grid.

In less than five years, the Hudson Valley, New York City and Long Island will need 1,250 megawatts of new capacity and by 2015 that need will grow to 2,250 megawatts. One megawatt is enough power for about 1,000 homes.


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