New York Reassesses Plan to Buy

AN agreement last week between New York State and Hydro-Quebec to postpone for a year a $12.5 billion, 21-year contract to buy power from a giant hydroelectric project in northern Quebec sets the stage for a significant reassessment of energy policy in New York, New England, and Quebec, say energy officials.Several factors have forced the postponement: changes in the economics of the utility business in New York; growing criticism by environmentalists that expanded hydroelectric production in Quebec - requiring a vast grid of roads, dams, and power stations - destructively alters a land mass larger than the state of Delaware; and claims from native Americans that the project spells the end of a way of life for 10,000 Cree and Inuit, who would lose traditional hunting and fishing grounds. If the contract were approved as originally written, Hydro-Quebec would supply the New York Power Authority (NYPA) with 1,000 megawatts of hydroelectric power, an amount equivalent to that of a large fossil fuel or nuclear power plant, starting in 1995. It would also leave surplus energy available to send to New England utilities, especially for peak summer demand for air-conditioning. The "load-diversity" fit is good between Hydro-Quebec and the Northeast United States, says William Sheperdson, spokesman for the New England Power Pool. "They have one [energy] peak in the year - winter. We have two, summer and winter," he says. With natural gas and oil to help in home heating, meeting electrical demand for summer air-conditioning makes Quebec-Hydro a prudent choice as a long-term supplier, he says. The agreement delays for at least a year new construction by Hydro-Quebec on its Great Whale River project. The project is part of the Province of Quebec's plan to expand its hydroelectric operatons, already among the world's largest sources of hydroelectric power. Hydro-Quebec has not changed its long-range goal of building 3,500 megawatts of generating capacity and of using 10 percent of that capacity for export, says Pierre Bolduc, executive vice-president for external markets. The Great Whale project, the second major damming project on the sub-arctic James Bay, "is essential to meet Quebec's future energy needs," he says. Hydro-Quebec is wholly owned by the provincial government. The contract was drawn up before the current recession changed energy-growth forecasts for the region from 1.1 percent a year to 0.5 percent through the year 2,000. Power-authority officials need to weigh more fully the recent dramatic effects of aggressive conservation programs and new, more cost-effective co-generation power plants coming on line, says NYPA spokesman Ed Echstein. "We expect that energy needs will be somewhat reduced." Environmental groups opposed to the Great Whale expansion welcome the opportunity to further study long-term energy needs. "The detriment to the environment is serious, and everyone agrees to this," says Daniel Sosland of the Conservation Law Foundation. "If it can be avoided, why not take the alternatives?" But there are environmental consequences for New York as well if the Empire State does not purchase Hydro-Quebec's electricity. "Environmental considerations were right up there with economic ones when we first considered the Quebec power," says Mr. Echstein. "The consequences are significant in New York City, by not putting more fossil fuels in the air." Most of the 1,000 megawatts NYPA would buy are intended for the New York City area. Three utilities, Consolidated Edison, Long Island Lighting Company, and Orange & Rockland Power Co. would get 80 percent of the load. The rest would go to public agencies such as the New York City subway system. Environmental issues aside, Mr. Sosland sees a decision to import electricity from Great Whale as poor economic judgment. It "just seems to make common sense to aggressively use proven conservation and demand-side measures hand-in-hand with alternative generation than to rely on a quoted future price to deliver electricity that has every likelihood of coming in at a higher and uneconomical rate," he says. "Hydro-Quebec needs the Northeast a lot more than the Northeast needs Hydro-Quebec," says James Dumont, an attorney representing the Sierra Club and native tribes in the James Bay area who want the Great Whale River project canceled. In a novel approach to meeting all parties' needs in the energy/environment equation, his clients have proposed to buy or "pass through" to New York and New England electricity that is conserved from existing Hydro-Quebec output. This, combined with continued energy conservation measures in the US and Quebec, will meet any midterm energy needs, he says.