Officials Reach Queens Waterfront Agreement
New York Power Authority
Queens Borough President's office
FOR IMMEDIATE RELEASE
NEW YORKQueens 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 citys 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 Patakis 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 NYPAs important role in
doing so, while at the same time recognizing the value of waterfront development and
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 citys growing power requirements. This
settlement would not have been possible without the governors 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
Other public officials praising the agreement, and Governor Patakis 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
Seymour said "unique" conditions in Queens, including the Vernon Boulevard
sites 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
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 Patakis 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 Citya 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
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 mayors concurrence, stop operating the gas turbines at that
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 Citys 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 boroughs 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 mayors approval, New York City,
under certain circumstances, would reimburse the Power Authoritys 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
Operators then-current estimate of the citys 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
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 mayors 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 KeySpans 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 Silvercups 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 othersa total of more than $50 million citywideexpressly 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"
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.