Energy Designation May Allow Use of Eminent Domain: New York NY Sun, 10/3/07

By Eliot Brown

A new action by the the U.S. Department of Energy may enable the use of eminent domain to clear the way for a large power line project in upstate New York despite the objections of state officials.

The Bush administration yesterday designated much of the mid-Atlantic region a "National Interest Electric Transmission Corridor," which will allow the federal government to supersede local and state authorities to approve energy projects that might otherwise have been rejected. The energy corridor designation, created by a federal law enacted in 2005, is aimed at relieving congestion on the energy grid and expanding capacity in such high-demand markets as New York City.

The designation, which covers much of New York State, could move forward a stalled project to build large transmission lines between the city of Utica and Orange County, a 200-mile development proposed by a private energy firm, New York Regional Interconnect Inc. The $1.6 billion project has faced considerable opposition from local and state officials, and yesterday's announcement prompted a flood of statements condemning the action.

"This designation will allow the federal government to preempt New York's legitimate oversight and process for reviewing and siting transmission projects within our state borders," Governor Spitzer said in a statement.

At the core of the debate is the potential for NYRI to initiate private land takings to clear a route for the project. While power authorities are allowed to impose eminent domain for public works projects, the stiff opposition from elected leaders and the Spitzer and Pataki administrations has prevented its approval. "States should be in control of their energy outcome," the chief executive officer of the New York State Energy Research and Development Authority, Paul Tonko, said.

The Bush administration has pushed for the ability to move along projects such as the NYRI proposal, diminishing the ability of local opponents to block large-scale projects.

The designation of the area represents a major victory for NYRI, which said its project would decrease transmission congestion and increase the reliable delivery of electricity for New Yorkers.

"Transmission congestion brings about very, very big economic impacts to consumers in New York," the project manager for NYRI, William May, said. "This is a project that not only helps alleviate the cost of congestion, but improves availability."

With the potential for the federal government to now step in and approve the project, Mr. May said the company has invested considerable resources in Washington lobbying efforts, spending about $255,000 between July 2006 and June 2007, according to disclosure reports. The chairman of an energy industry advocacy organization, Jerry Kremer of the New York Affordable Reliable Electricity Alliance, said the new designation could help spark energy production in a state that has seen little new activity despite a growing demand.

"Nothing is happening in New York state, and we felt that it was imperative that somebody intervene to get the ball rolling," Mr. Kremer said.

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