How a $6B transmission project made it in New York

By Miranda Willson | 03/01/2023 06:55 AM EST

A planned transmission line from Canada to the United States is being called a potential model for the national grid build-out required for large amounts of renewables.

A view of the New York City skyline from the Hudson River in New York, Wednesday, Sept. 14, 2022.

A view of the New York City skyline from the Hudson River. Seth Wenig/AP Photo

When Transmission Developers Inc. announced plans for an underwater power line from Quebec to Queens, George W. Bush was president and Joe Biden was a senator.

Fifteen years later, the Champlain Hudson Power Express (CHPE) is on the way to completion — making it a rare success story in a country where major transmission lines have often stalled.

For the Biden administration to reach its clean energy goals, miles of long-distance power lines need to be built in the next decade to connect new clean energy projects to cities and towns. But getting those lines approved and paid for — and surviving legal challenges from project opponents — has often been a challenge.


That reality is putting renewed attention on CHPE — pronounced “chippy” — as a potential model for New York and elsewhere. New York officials are counting on the project to help clean up New York City’s fossil fuel-heavy grid and enable the shutdown of some of the dirtiest power plants in the state.

If there’s a lesson to be learned from Transmission Developers’ yearslong quest to get its 339-mile power line to the construction phase, it may be that playing the long game pays off.

“In certain respects, [CHPE] is arguably a model. There are aspects of it where you could point it and say, ‘This worked,’” said Justin Gundlach, senior regulatory manager at the Building Decarbonization Coalition, based in New York City. “But it’s worth keeping in mind that it took a very long time.”

Throughout the 2010s, overall investments in the transmission system declined nationwide, making it harder for solar, wind and other energy projects to connect to the grid, the Department of Energy said in a recent report. In New York, 84 percent of the wires and electrical stations that make up the grid were built prior to the 1980s.

Once it enters service in the spring of 2026, CHPE will be the largest transmission line in the U.S. built entirely underwater and underground. Being mostly out of sight may have helped appease potential opponents, observers said.

With a total cost of about $6 billion, the project will transmit hydropower from a network of dams in Canada owned by Hydro-Québec. Unlike solar and wind power that ebbs and flows with the weather, the hydropower will be able to meet the electricity needs of the nation’s largest city at virtually any hour.

“We’re expecting it to provide about 20 percent of New York City’s [electricity] needs, which is pretty substantial,” said Julie Tighe, president of the New York League of Conservation Voters.

That’s significant considering the gap between New York’s clean energy goals and its current energy mix. The state aims to generate 70 percent of its electricity from renewable energy by 2030, and 100 percent of its electricity from zero-emissions resources by 2040. In 2021, less than a third of New York’s electricity came from solar, wind and hydropower.

Yet the experience of Transmission Developers, or TDI, over the past decade and a half offers a cautionary tale about transmission development and the difficult decisions facing states as they try to address climate change. Getting buy-in from New York communities along the project path required years of public meetings, multiple changes to the route and negotiations with communities over compensation packages.

Running the line underwater — specifically, through the Hudson River and Lake Champlain — also spurred ongoing concerns from environmental groups about impacts to fish species.

Burying the line contributed to CHPE’s high price tag as well. The project costs about twice as much as another proposed high-voltage line involving Canadian hydropower, the New England Clean Energy Connect, even accounting for the smaller size of the New England project, according to a research paper released last year.

The project has backing from the Blackstone Group, the private equity giant that is now CHPE’s majority owner. New York’s climate laws also may have helped make the project economically viable. Under a contract that the state approved last year, CHPE will receive renewable energy credits — paid for by consumers across New York State — once it is up and running.

“The costs have increased because they are kind of erring on the side of adopting a plan that will eliminate objection from local communities,” said Ryan Calder, an assistant professor of environmental health and policy at Virginia Tech, who led the research on that paper. “I think [TDI] has seen that when long-distance transmission has been proposed and they try to ignore or steamroll through local opposition, it can ultimately be canceled.”

A 'science experiment'

When TDI co-founders Donald Jessome and John Douglas first envisioned the CHPE line in 2008, they sought to understand why large transmission projects weren’t being built.

“One is that nobody wants to pay for them, and the other is that nobody wants to see them,” said Jessome, who is also the company’s former CEO. “We made the choice very early on to select high-voltage direct currents, because of the fact that you can get it in cable format and you can bury it.”

From the project’s inception, the plan was to lay most of the line in the Hudson River and Lake Champlain. The rest would be buried underground, primarily along former railroad paths.

Today, all 35 communities through which the line passes have enacted resolutions in support of the project, according to Jessome. But it wasn’t always that way.

TDI’s initial plan was for the southern leg of the project to run through the Hudson River. Yet that would have involved crossing an ecologically sensitive area north of New York City called Haverstraw Bay, which is considered critical for fish species.

So the route was changed. The project now includes a 7.7-mile terrestrial portion in suburban Rockland County to skirt around the bay, before dipping back into the Hudson.

For years, that new route attracted fierce opposition in Rockland County and fears about private land takings. Mayors and city councilmembers said the project threatened historic sites and posed public safety concerns. In 2011, three state senators — including one from Rockland — introduced legislation prohibiting electric transmission lines that originated out of state, in a clear attempt to stop the project.

TDI came up with another plan in 2017 for the Rockland County segment, avoiding the historic sites and other areas of concern. The company also hired a new communications officer who began working extensively with county officials, Jessome said.

A cash offer was made to local communities as well. In 2018, five of them in Rockland County signed memorandums of understanding with TDI, in which the company pledged $31 million for capital improvement projects in the region and towns agreed to not oppose the project.

“It was really all about making sure we worked very closely with the community to explain to them the benefits of the project, not the least of which are property taxes and cleaning up the environment, but very specific to that community,” Jessome said.

While the Rockland County community benefits agreement included the largest compensation package, TDI also signed agreements with other towns and counties, he added.

Even so, shortly after TDI won the support of key New York City suburbs, it lost another crucial ally: Riverkeeper, an environmental group focused on the Hudson.

A longtime foe of the now-shuttered Indian Point nuclear plant, the group publicly backed the CHPE project in 2013, in part because it would help the state meet its energy needs without Indian Point. The group had also been assured that CHPE would not lead to new dams being built in Canada.

But in 2019, the same year that New York enacted its wide-ranging climate law, Riverkeeper reversed course. The group had become increasingly concerned about the possibility of Hydro-Québec building new dams, the impacts of existing dams on Indigenous groups in Canada and the ecological consequences of laying TDI’s cable in the Hudson River, said Riverkeeper President Tracy Brown.

“The cable that’s going to come through and emit an electromagnetic field is a big science experiment on the Hudson River estuary,” Brown said. “It’s going to be jet-plowed not terribly deeply under the sediment of the river. And we’re talking about a river that already is under a lot of stress.”

State and federal agencies have been in a yearslong battle against polychlorinated biphenyls (PCBs) in the Hudson. The highly carcinogenic compounds were deposited in the river for decades in the mid-20th century by General Electric Co.

CHPE does not pass through the most contaminated, northern portion of the Hudson. Still, the fear is that PCBs on the bottom of the river could be churned up by the cable and leach into the drinking water of several communities in the Hudson Valley. Approximately 200 miles of the river is considered an EPA Superfund site.

“As we make this rush to renewable energy, we just have to decide which are the trade-offs we can make,” Brown said.

According to TDI, protection of drinking water has been mandated throughout the regulatory process. Some water quality experts also don’t share Riverkeeper’s concerns.

Timothy Mihuc, director of the Lake Champlain Research Institute at the State University of New York at Plattsburgh, said the possibility for sediment disturbance from the project “is fairly well-known” and manageable.

Along with promising to monitor water quality before and during installation of the cables, CHPE is financing a $117 million environmental mitigation fund focused on restoring and protecting fish habitats in both waterbodies, he said.

“I would say the technology to do this is proven,” Mihuc said. “It’s out there. They know how to do this.”

A 'partial solution'

While TDI began construction work on parts of the project last November, state regulators still need to sign off on construction and environmental management plans for individual segments of the transmission line. That process is expected to play out in the coming months and years.

In the meantime, New York regulators in the last few years have approved dozens of new solar and wind farms and offshore wind projects, which are slowly making their way to the construction phase. There is also another major transmission project under development, the 175-mile Clean Path NY.

One advantage for CHPE over the others, however, is that it got a head start. By the time New York enacted its wide-ranging climate law in 2019, the project already had secured a presidential permit from the federal government to cross the U.S.-Canada border, a water quality certificate from the New York Public Service Commission and necessary approvals from the Army Corps of Engineers, among other milestones.

“It was sort of good timing for their entrepreneurship,” said Anne Reynolds, executive director of the Alliance for Clean Energy New York, which represents renewable energy developers in the state.

In addition, hydropower dams in eastern North America provide a consistent, dispatchable source of electricity, compared with the intermittent nature of solar and wind energy. That means that CHPE can directly replace the contributions that fossil fuel power plants currently provide for the state’s grid.

Starting this year, a handful of natural gas- and oil-fired generation units in the New York City area may be unable to comply with new pollution requirements from the state’s Department of Environmental Conservation.

By 2025, about 1,600 megawatts of generation is expected to be “unavailable” as the state further tightens requirements for nitrogen oxide pollution, the operator of New York’s power grid said last fall.

If CHPE does not come online by spring of 2026 as expected, the state may need to retain some of those fossil fuel plants to keep the lights on, the New York Independent System Operator warned in a blog post last month.

“[CHPE] provides a very real, partial solution,” said Gundlach of the Building Decarbonization Coalition. “Assuming it’s timely, and it seems like that’s likely, it’ll make up for what the state and city lose when we close those downstate [power plants].”

Retiring some of New York City’s peaker plants — which provide power for the grid when demand is particularly high — has been a long-standing priority of environmental justice advocates. Disproportionately located in low-income communities of color, the plants emit air pollutants that pose health concerns, advocates say.

“Our project is going to take the equivalent of 14 of the 15 peaking generating plants in New York City, the equivalent of that pollution, out of the community,” said Jessome, the TDI co-founder. “As a developer, as a company, we’re particularly proud of the fact that health benefits in that community will be greatly appreciated.”

Nonetheless, some environmental justice advocates say that CHPE's benefits don’t outweigh the harms caused by Hydro-Québec dams for Canada’s Indigenous groups, known as First Nations.

Numerous studies have documented how the development of dams in Quebec over the past several decades disrupted the traditional hunting and fishing practices of First Nations, some of which remain opposed to transmission solutions like CHPE.

Still, it’s worth noting that CHPE does not involve the construction of new dams, said Calder of Virginia Tech. Instead, it offers a way “to allocate existing generation in ways we can’t do at present day” because of transmission constraints, he said.

Ultimately, his research on the power line has found that the total benefits — including reduced greenhouse gas emissions and improved air quality for power plant communities — are significantly greater than the total costs.

“Anything that increases the access of the New York City area to a renewable energy supply and a non-carbon-based supply will have substantial health benefits,” he said.

Lynn St.-Laurent, a spokesperson for Hydro-Québec, said that the utility has signed over 50 agreements with Indigenous communities over the years to address impacts from its hydropower portfolio.

In a first for a Hydro-Québec project, the Mohawk Council of Kahnawà:ke is a co-owner with the utility on its Hertel–New York interconnection line, which will connect with CHPE at the Canada-U.S. border.

“It’s not always been an easy relationship,” St.-Laurent said. “Our facilities do have impacts, and we have consistently done our best to avoid, mitigate and compensate when needed for those impacts.”

As construction continues on the CHPE line, the landscape is already changing for developers of new transmission projects following last year’s enactment of the Inflation Reduction Act, said Liza Reed, a former research manager of low-carbon technology at the Niskanen Center who now works at the Department of Energy.

In January, the department kicked off a new $760 million program established by the federal climate law to help improve the siting process for transmission projects. In the coming months, state and local governments will be able to apply for grants through the program aimed at shortening the permitting timetable and reducing conflicts over siting.

“If a developer is coming to you with a route, how do you think about that? Now there’s money to help hire a consultant and figure out what you want to do,” Reed said.