Officials Reach Queens Waterfront Agreement
Contact Stephen Shoenholz New York Power Authority 914-390-8165 Stephen.Shoenholz @nypa.gov Dan Andrews Queens Borough President's office 718-286-2640
December 19, 2001
FOR IMMEDIATE RELEASE
NEW YORK—Queens Borough President Claire Shulman, New York Power Authority (NYPA) Chairman and Chief Executive Officer Joseph J. Seymour and other officials Wednesday announced an agreement under which NYPA would shut down two small generating units in Long Island City by Oct. 31, 2004, if at least one of two proposed larger power plants has begun operation in Queens and Mayor-elect Michael R. Bloomberg has concluded at that time that the action would be advisable in light of the city’s power requirements.
The agreement, reached after months of negotiations, achieves major energy, economic development and environmental goals established by Gov. George E. Pataki and ends a lawsuit that had sought to block construction and operation of the small, clean generators on Vernon Boulevard along the East River.
"Governor Pataki’s leadership and vision have been essential in reaching a landmark settlement that will significantly benefit the people of Queens and all of New York City," Seymour said. "The governor is to be commended for addressing the need to keep the lights on in the city, and acknowledging NYPA’s important role in doing so, while at the same time recognizing the value of waterfront development and environmental protection."
The NYPA chairman also cited the "indispensable efforts" of Mayor Rudolph W. Giuliani and Borough President Shulman in concluding the agreement, which provides for potential acquisition of the gas-turbine site by Silvercup Studios as part of a plan to add hundreds of new jobs at expanded television production facilities in the area and to develop a residential-commercial complex.
Shulman said, "Our thanks go to Governor Pataki for working with us, through the Power Authority, to bring about this extraordinary agreement that balances our economic and environmental concerns in Queens with the city’s growing power requirements. This settlement would not have been possible without the governor’s persistence and his understanding of the immense potential of our waterfront property. Mayor Giuliani has also been a constant supporter of this effort and has indeed signed on for the future of our waterfront."
Other public officials praising the agreement, and Governor Pataki’s role in bringing it about, are Congressman Joseph Crowley, State Senator George Onorato and City Councilman Walter McCaffrey. All, like the borough president, were parties to the lawsuit.
Seymour said "unique" conditions in Queens, including the Vernon Boulevard site’s substantial potential for development and job creation, made an agreement on the gas turbines appropriate. He noted that Queens power plants account for more than 50 percent of the electricity produced in New York City, a far larger share than in any other borough.
The agreement, signed by Silvercup, calls for the production company to maintain its headquarters and principal studios in New York State for at least 10 years and to increase its current employment in Queens by at least 10 percent.
Silvercup and other plaintiffs had filed the suit to stop installation of the clean, efficient natural-gas-fueled generators, which are among 10 that NYPA completed in New York City in a successful effort to help stave off threatened power supply shortages last summer. The company had contended that noise from the gas turbines would block its plans for expansion at an adjacent site.
Congressman Crowley said, "I am pleased that this agreement was reached with input from the entire community. All of New York City and the State of New York are affected by this energy policy, and I commend Governor Pataki for including a place at the table for those who live and work with these generators in their backyard."
Senator Onorato said, "We appreciate Governor Pataki’s efforts in bringing the parties together to reach a compromise that responds to diverse, but equally important, needs. It promises new jobs and cleaner air in Queens and a reliable power supply for New York City—a winning combination by any standard."
Councilman McCaffrey said, "We are grateful to Governor Pataki for the concern and commitment that he brought to a long and difficult negotiating process. The resulting agreement not only addresses the urgent need to assure an adequate power supply in New York City, but does so in a way that recognizes and responds to important local concerns in Queens."
The agreement calls for the Power Authority to shut down the two gas-turbine generators by the October 2004 date and to "use expeditious efforts" to remove them from the property by the end of that year if either or both of two new natural-gas-fueled power plants planned in Astoria are producing electricity and the mayor, after consulting with the Queens borough president and the City Council member from the 26th District, has determined that the action is advisable.
The potential new plants are a 500-megawatt facility proposed by NYPA for the site of its existing Charles Poletti Power Project and a 1,000-megawatt Astoria Energy unit planned by SCS Energy at the Castle Astoria oil terminal. If the first of the new plants is placed in service after October 2004, NYPA would, with the mayor’s concurrence, stop operating the gas turbines at that time.
In line with the agreement, Shulman and Silvercup pledged to support construction of the new Power Authority plant at the Poletti site. The combined-cycle facility, planned for completion in 2004, would be one of the cleanest and most efficient power plants in New York City’s history.
NYPA said in an introduction to the agreement that it expects to limit operation of the existing Poletti project after the new plant is in service and that overall annual air emissions from the Poletti site would thus be below recent averages.
The introduction also notes that the parties wish "to reach an amicable resolution of their differences" in order to assure an adequate power supply for Queens and New York City while minimizing disruption to the borough’s residents and recognizing the importance both of improving local air quality and of promoting long-term employment opportunities in Queens.
The settlement provides that:
•If the gas turbines are shut down with the mayor’s approval, New York City, under certain circumstances, would reimburse the Power Authority’s unrecovered costs for the project, up to $40 million. The payment would be required if remaining generating capacity in the city is less than 81 percent of the New York Independent System Operator’s then-current estimate of the city’s peak power needs and NYPA has unsuccessfully offered, over a six-month period, to sell the units to an entity willing to operate them at another New York City site. The city would pay the difference, up to the $40 million limit, if such a sale did not fully reimburse the Power Authority for its unrecovered costs.
•If either of the two new plants is operating during the summer of 2004, NYPA is to shut down the gas turbines on Sept. 25 of that year with the mayor’s concurrence.
•Parties to the settlement will "reasonably support" voluntary efforts by the Power Authority to relocate the gas turbines to another site in Queens. NYPA, in turn, will use its "best efforts" to negotiate with KeySpan Energy Corp. to move the units to KeySpan’s Ravenswood facility, where they would help to reduce air emissions in Queens by replacing older plants.
•After the gas turbines stop operating at Vernon Boulevard, the Power Authority would offer Silvercup the opportunity for 120 days to buy or lease the three-acre property. The offer would be conditioned on Silvercup’s agreement to meet its commitments on jobs and retention of its headquarters and studios in the state. Silvercup would also use its "best efforts" to agree with NYPA on installation of energy efficiency features in its new facilities, with the costs to be deducted from the purchase or lease price.
The gas-turbine generators in Queens, along with the others that NYPA installed in New York City, were essential to avoiding power disruptions in the city during a heat wave last August that resulted in record demand for electricity in the city and state. NYPA had completed the units within several months to help avert blackouts and brownouts such as those that plagued California earlier this year. The efforts were initiated last fall and intensified amid reports by the New York Independent System Operator and several state agencies and officials that the city faced a serious threat of power shortages last summer.
The Power Authority has invested more than $5 million at each of the Vernon Boulevard generators and the others—a total of more than $50 million citywide—expressly to install the most advanced available air emissions and noise controls. In addition, the Authority will offset even the minimal emissions from the gas turbines by cutting those from other city sources under an innovative $23 million "zero net emissions" program.
As part of the emissions-offset program in Queens, the Power Authority plans to install two clean fuel cells at Bowery Bay in Astoria, subject to city approval. It will also provide advanced pollution controls on a total of about 1,000 city school buses in Queens and other boroughs in which the gas turbines are located.
