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The Beauharnois generating station. Photo courtesy of Hydro-Quebec
The Beauharnois generating station. Photo courtesy of Hydro-Quebec

Would Quebec-NYC power line benefit North Country?

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The Champlain Hudson Power Express is a proposed underground transmission line that could supply New York City with hydropower generated in Quebec. But opponents say the line won't benefit New York state's energy producers - or communities along the route.

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Inside Beaharnois. Photo courtesy of Hydro-Quebec

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Reported by

Sarah Harris
Reporter and Producer

In Quebec, electricity is cheap. Hydro-Quebec, a state-owned utility, has over 60 generating stations that use the province's rivers to produce power and supply the Quebec load.

One of them is Beauharnois, southwest of Montreal on the St. Lawrence River.

It's a long brick building. Men in jumpsuits and hard hats drive giant rumbling machines that work to generate power.

But hundreds of miles south, in New York City, power is really expensive. A lot of demand, plus congestion on the state's grid, means that the ratepayer's electricity bills are through the roof.

But what if you could funnel the cheap power from Quebec into the New York City market?

Donald Jessome is president and CEO of Transmission Developers, Incorporated. His company plans to do exactly that.

"We're connecting one of the strongest systems in North America in Quebec, to the other strongest system in America which is New York," Jessome said.

TDI's project is called Champlain Hudson Power Express. They want to a run an underground HVDC transmission line from the Canadian border, under Lake Champlain, under the Hudson River, the East River, and the Harlem River, and into New York City.

The line would deliver 1000 megawatts of power – and cost at least $2.2 billion.

The plan is currently under review by the state's Public Service Commission.

American Markets

Canadian power producers often look south, across the border, for business.

"I would say that Canadian producers have the abundance of energy and the lack of load," Jessome said.

But Hydro-Quebec only has one transmission line into the US. It supplies electricity from James Bay, in far northwestern Quebec, to Boston.

So for Hydro-Quebec, the Champlain Hudson Power Express is a big opportunity.

"For us it is going to be an extremely important project because that's really a market we don't have access to right now, New York City, we cannot sell to New York City physically right now," said Maxime Lonctôt, director of wholesale markets at Hydro-Quebec. He explains that the company works to keep prices low in Quebec, and makes their money from exports.

The company is developing major hydro resources in far-flung areas of the province. They won't say that it's expressly for export.

But they have a surplus that they'd like to sell. But does New York state need it?

Gavin Donahue, head of the Independent Power Producers of New York, a trade association, says no.

"We have across the state in upstate New York probably 3000 megawatts in New York state just sitting there every day. So when you come down to does the marketplace need this power? To us it's obvious that it does not."

He says that the Champlain Hudson Power Express puts New York state's power producers at a disadvantage.

"And you do have struggling areas in upstate New York where smaller power plants are trying to make a go of it and this project will certainly take away huge ability of them to prosper in an economic development way. This project is basically an electrical extension cord from Canada just flooding the marketplace in New York."

But Hydro-Quebec faces economic complications as well.

Jean Thomas Bernard, a professor of electricity economics at Quebec's Laval University and the University of Ottawa, says that hydropower is going to face tough competition from natural gas in the marketplace.

"Hydro-Quebec, five or six years ago, was netting about eight or nine cents per kilowatt hour on the export market. Nowadays they have difficulty getting three to four cents per kilowatt hour due to the huge plunge of the natural gas price."

He says the cost for Hydro-Quebec to develop additional resources and built its own transmission line to the border won't be worth it.

"It may go on, but it will not benefit hydro definitely," Bernard said.

TDI says customers in New York City will see lower power bills but won't have to assume any of the cost.

It's not clear yet clear what impact the project would have on electricity customers in other regions.

TDI estimates that transmission line construction will result in 1200 new jobs.

"So even in the North Country, which is far away from the city where we'll actually interconnect, during the construction period there will be economic activity," TDI's Donald Jessome said. "As we lay the cables in Lake Champlain we'll have to build barges, people are going to have to stay there, it's going to be quite extensive for a period of time."

TDI recently signed a memorandum of understanding with the relevant unions earlier this month.

Right now, they're working with Blackstone Group, a major private equity firm, to finance the project.

The draft environmental impact statement for the project will be published this spring.

TDI hopes to have their permits in place by the end of 2013.

Reporting by the Innovation Trail is supported by the Corporation for Public Broadcasting. Visit innovationtrail.org.

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