Dutchess Opposes Tax Breaks for Power Line

Cable under Hudson would supply New York City

Dutchess officials are opposing proposed tax breaks for a $3 billion transmission line that will be buried under 31 miles of the Hudson River in the county as it carries hydroelectric power from Canada to New York City. 

The Blackstone Group, an investment company that says it manages nearly $900 billion in assets, owns 89 percent of the 339-mile Champlain Hudson Power Express transmission line, which is supposed to deliver 1,250 megawatts from renewable sources to New York City when completed in 2025. 

New York State considers the transmission line key to fulfilling the goals of  the Climate Leadership and Community Protection Act, legislation passed in 2019 that calls for reducing greenhouse gas emissions by 40 percent and supplying 70 percent of electricity through renewable sources by 2030.

champlain power route

In this map of the line’s proposed route from Quebec to New York City, the blue sections are underwater and the green sections under land.

The U.S. portion of the line begins under Lake Champlain and passes through 15 counties, 60 towns and 60 school districts, including Beacon’s. The developer, TDI-USA Inc., has applied for tax breaks from county industrial development agencies along the route, including in Dutchess. 

The Dutchess County portion is expected to cost $167 million and pass through the City of Poughkeepsie and six towns: Fishkill, Hyde Park, Poughkeepsie, Red Hook, Rhinebeck and Wappinger. 

Village of Rhinebeck Mayor Gary Bassett, who chairs of a group of seven municipalities that draw drinking water from the Hudson, urged the Dutchess County Industrial Development Agency (IDA) to deny TDI’s request for $105.5 million in property-tax breaks over 30 years, plus $13.6 million in sales-tax relief and $1.3 million in mortgage taxes. 

In a letter dated July 12, Bassett said that the Hudson River Drinking Water Municipal Council fears the plan to bury cables under the riverbed will disperse potentially contaminated sediment toward water intakes. 

In addition to Rhinebeck, the council includes the City of Poughkeepsie and the towns of Esopus, Hyde Park, Lloyd, Poughkeepsie and Rhinebeck. 

Those municipalities unsuccessfully petitioned TDI to route the line overland instead of under the river, said Bassett, adding that he also has asked the company to reduce the impacts of its trenching. 

While some county IDAs, such as Warren-Washington, have approved tax breaks, others are being asked to reject TDI by county and local officials concerned about drinking water and balking at forgoing tax revenue while assisting a project they say largely benefits New York City. 

The concerns of the drinking water coalition were highlighted by the Ulster County Legislature in a March resolution asking its IDA to reject the tax breaks. 

In Dutchess, TDI is applying for the type of tax breaks that require consent from every affected tax jurisdiction, including fire departments, said Assistant County Executive Ron Hicks. County Executive Marc Molinaro said he opposes giving TDI any breaks on county sales taxes. 

“Exempting county sales tax for a project driven by New York State that is likely to proceed without such a benefit, and with concern for drinking-water supply, is not going to happen,” he said. 

Dutchess IDA members were scheduled to take up a resolution approving tax breaks for the project at their July 13 meeting, but Chair Tim Dean announced that a representative for the project had asked that the resolution be withdrawn.

A spokesperson for TDI said on Tuesday (July 19) that “it became clear that additional discussions needed to be held with stakeholders in the context of tax certainty for Dutchess County.”

Construction is supposed to start this fall on the transmission line, which won approval from the Public Service Commission, the state’s energy regulator, in 2013. Along with Blackstone, Transmission Developers, a Canadian company, owns 9 percent, and National Resources Energy owns 2 percent. 

Josh Bagnato, the vice president of development for TDI, told the Warren-Washington IDA last month that the company is awaiting approval from the state for its environmental management and construction plan for the first segment of the line. It hopes to finalize financing this summer and begin construction in Washington County in the fall. 

Under the plan, the transmission line would tie into a grid operated by Hydro-Quebec, a Canadian company that says nearly all its electricity comes from renewable sources, and enters the U.S. through cable buried under Lake Champlain. 

Some sections of the line will be buried on land, but 60 percent of the project will be underwater. Along with Lake Champlain and the Hudson River, sections will run under the Harlem River before the line terminates at a converter station in Astoria, Queens, that will connect to Con Edison’s grid. 

According to TDI, the cable under the Hudson River will bypass a section of river contaminated by General Electric that underwent a cleanup overseen by the Environmental Protection Agency, and a section of Haverstraw Bay that is a breeding and spawning habitat. The company says the machine that carves a trench in the riverbed operates without dispersing large amounts of sediment. 

The company also agreed to spend $117 million over 35 years on restoration and other environmental projects at Lake Champlain and along the Hudson, Harlem and East rivers.

One thought on “Dutchess Opposes Tax Breaks for Power Line

  1. The article assumes CHPE will be built, although this is not certain. The word “will” in the first sentence should be “would” and other similar changes should be made.

    More than 100 miles of CHPE would be buried in two shallow trenches under the Hudson River and another 10 miles laid on the riverbed under cement covers. Dredging the river would release buried poisons.

    If constructed, CHPE would bring up to 1.25 billion watts of Canadian electricity through eastern New York to New York City. Most of the power would come from hydro stations in Quebec and Labrador. Many of the power stations are located at dams that create giant reservoirs (some larger than upstate counties), drowning entire river valleys and destroying formerly spectacular rivers. Immense regions of habitat would be severely altered, wreaking havoc on animal and plant life.

    Dams and reservoirs negatively impact climate: Rotting vegetation cannot remove carbon from the atmosphere and instead release carbon and methane into the water and air. Constructing CHPE might encourage Hydro-Québec to dam additional rivers.

    We do not need CHPE. Hopefully, we are smart enough to meet our energy needs with conservation and efficiency, and appropriately sited and scaled solar and wind power.