State agency rescinds its approval of water-quality permit for Propel project

The state Department of Public Service on Monday rescinded a crucial water-quality permit for the Propel NY Energy project a month before work on the 90-mile cable is set to begin, as opponents filed new papers demanding a rehearing of their arguments against the $3.26 billion plan. 

In a filing late Monday, Jason Zehr, interim executive director of the DPS's Office of Renewable Energy Siting and Electric Transmission, wrote, "I hereby rescind the certification" issued by his office on Oct. 2, when the Public Service Commission also approved the project conditionally. The filing doesn't explain why it was rescinded.

But later Tuesday, DPS in a statement indicated that rescinding of the certificate was administrative, saying it was necessary because the application “had not been filed on the public docket for the project.” The agency said the move “also directed the project applicant to submit its application for the certificate on the public docket,” a move that will “promote transparency in the record.”

One observer viewed the unexpected decision to rescind by the PSC as no small matter. 

"Yikes!" said former PSC chairman and commissioner John Howard, in an interview Tuesday. "For a project of this magnitude it's a big deal." He said the big question is whether the decision is a "project stopper, or do the developers have time to fix it?" 

Susan Craig, a spokeswoman for the New York Power Authority, which is developing Propel with New York Transco, on Tuesday said the developers do not expect the rescinding to impact the construction timeline for the project, which she said she still expects to begin in December. Propel will refile its water-quality permit application and believes the record in the case is complete. 

"We don't believe it will impact the timetable," Craig said. Propel is preparing to announce the construction contractors for the project in coming weeks, though it has not said how much each will be paid. 

Electric customers across the state are already paying for some of Propel's costs through their utility bills. State figures previously detailed the cost to Long Islanders rising from under $1 to $1.59 a month by 2029, a year before Propel is projected to be finished. Propel has said state customers will pay an average $2 a month when it's in service in 2030. DPS spokeswoman Kim Mashke said the $1.59 a month figure previously released by the agency is now "outdated," but didn't provide new figures. 

Christine Panzeca, a Glen Head resident who has led opposition to Propel, said she suspects the latest move to rescind the state permit indicated to her that the state and Propel "may starting to realize they’re probably ripe for a legal challenge and they are not going to be successful in a legal challenge." 

Propel also awaits a critical permit from the U.S. Army Corps of Engineers, also relating to work to be done in water bodies from Hempstead Harbor to Long Island Sound. The federal agency has not commented on when, or whether, it will approve the permit for the project, which originally was designed as an offshore wind export cable of up to 3,000 megawatts. Most of the wind farms that would have fed the line, notably the Empire 2 wind farm, have been withdrawn or canceled.

The project's multiple, high-voltage cables will snake from Western Suffolk and Nassau, through Queens to the Bronx and under Hempstead Harbor and Long Island Sound to Westchester. Proponents say the cable is needed for enhanced reliability for the region at a time of growing constraint, and for a lesser amount of wind power that will be available — about 1,800 megawatts — in coming years. 

But in filing requests for rehearing of their arguments against the project, several parties argued the state's foundation for approving permits for Propel, including the conditional water-quality permit, were founded on errors of law among other things, and largely ignored the serious concerns of homeowners, school districts, conservation groups and a major gas-pipeline company.

In its papers, the Village of Sea Cliff points to "verifiable errors" in the PSC’s conditional approval of the project earlier this month, most notably that the state agency including the Empire Wind 1 wind farm under construction off Jones Beach and its planned 810 megawatt of power as available for transmission to Propel. In fact, noted the village, energy from that plant is specifically slated for Con Edison's New York City grid, with a connection point in South Brooklyn.

Sea Cliff also took issue with the PSC’s assurances that Propel would not have impacts on shellfish, and that "errors" in its decision would have consequences.

"Hempstead Harbor is not [Propel’s] construction corridor," the village wrote. "It is a public and municipal resource used for navigation, shellfishing, fishing, boating, habitat restoration, commerce, and other lawful purposes that have existed for generations."

Village Administrator Bruce Kennedy wasn't available Tuesday to discuss the rescinding of the permit.

In a joint filing, the Syosset, Roslyn and North Shore public school districts called the state order approving Propel "unjust and unwarranted." They charged the order contained "errors of fact and law," overlooked or "misapprehends material evidence, fails to meaningfully address significant issues raised by the school districts," and reaches findings about school-district impacts that are "unsupported" by the record in the two-year PSC case.

"The school districts do not seek rehearing lightly," Christine M. Durant, an attorney for the districts with the firm Ingerman Smith, wrote. "Rather, they have been compelled to seek rehearing because the [PSC order] fails to meaningfully address many of the significant adverse impacts raised throughout this proceeding and, in several instances, appears to completely disregard or ignore unrebutted evidence altogether."

The districts have said they raised "serious concerns with the project’s risks" to the health and safety of over 12,000 students, staff and 70,000 residents.

The PSC, the districts argued, deemed filings by Propel "sufficient" for the record in the case, while testimony by the school districts was "wholly disregarded without explanation."

The Iroquois Gas Transmission System, which had earlier argued in its filings that the Propel pipeline, where it proposed crossing the region’s vital gas lines in Long Island Sound, posed a potential incursion of its property rights and vital gas operations, also filed for a rehearing. The company had previously argued that Propel’s plan to co-locate its transmission lines in two areas where Iroquois has existing gas lines violated its property rights.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.