Hochul’s green power scheme may raise New Yorkers’ power costs

The green-energy movement has been very good for Wall Street, and not so good for consumers. Energy prices remain stubbornly high because environmentalists control vast swaths of government on both the federal and state levels mandating inefficient windmills, solar panels and other costly boondoggles.

Meanwhile, the Wall Street cash register keeps ringing. Money managers sell high-cost funds investing in environmental causes to unsuspecting buyers, and banks tap into businesses that receive green subsidies.

The latest example of Wall Street’s green cash machine at work: Blackstone’s investment in so-called “clean hydropower” that will bring this allegedly spotless electricity to New York City residents. The project is being sold as a clean and cost-efficient way to put a cap on our skyrocketing energy cost

The reality might be much different.

Gov. Hochul and the state Public Service Commission recently approved a plan that was 10 years in the making. A decade ago, Blackstone, a private-equity firm with $881 billion under management, made a hydro-transmission outfit known as Transmission Developers Inc., or TDI, one of its portfolio companies, with a grandiose vision of making it a player in the state’s utility market.

Now that’s playing the long game, and it gives you an indication of how the people at Blackstone smartly bet that the left’s obsession with everything green would be a huge business opportunity someday.

Hochul has fully embraced clean energy.
Gov. Hochul Commission recently approved a hydro power plan that was 10 years in the making.
Getty Images for Concordia Summi

That day is now. TDI will soon be laying 338 miles of transmission cable lines from hydro stations in Canada through the floor of the Hudson River, all the way to New York City — to provide power to some 1 million homes when the project is completed in 2026.

It’s pretty complex stuff that is made even more daunting given the costs involved. Just a few months ago, the project was slated to run no higher than $4.5 billion. It’s now at $6.1 billion because of the immense amount of infrastructure and manpower necessary to carve cables through hundreds of miles of land.

Doubling investment?

But it’s happening. Financing terms, as Fox Business was first to report last week, will be announced later this month or next. They include Blackstone cobbling together bank loans to cover $5 billion in costs. Blackstone is responsible for another $1 billion, comprising the only equity stake in the transaction.

That’s a lot of money for a private-equity firm that has traditionally prospered by taking private companies in tech or hospitality, fixing their operations, and then selling them at a profit. But Blackstone thinks it’s well worth it. People there privately estimate they will easily double their investment in a couple of years.

One big reason Blackstone is so giddy is New York’s embrace of everything green — virtually guaranteeing it a huge payday. Recall former Gov. Andrew Cuomo’s shuttering of the Indian Point nuclear plant and his plans to slash fossil fuels in the state to be replaced by green substitutes that Hochul has fully embraced.

TDI will soon be laying 338 miles of transmission cable lines.
The plan will provide power 1 million homes when the project is completed in 2026.
dpa/picture alliance via Getty I

That is leaving a huge hole in the state’s power grid. TDI and its transmission line — dubbed the Champlain Hudson Power Express, or CHPE — will become one of the only games in town as city dwellers face surging electricity costs amid shrinking supply.

Yes, a sweet return for doing God’s work on the environment, and I don’t begrudge Blackstone for cashing in. A spokeswoman said “this project . . . will deliver consistent, reliable, clean power to New Yorkers.”

My beef is with New York state officials who have failed to level with consumers over why they want to embrace a Rube Goldberg-like approach to energy when simpler solutions exist (i.e., clean and increasingly safe nuclear and, yes, natural gas, which is cleaner than coal).

Project supporters say while reducing CO2 emissions.
CHPE will lower rates by $17.3 billion over 25 years.
AFP via Getty Images

First: There’s no guarantee that transmission lines running under the Hudson will work as envisioned and reach the near 100% efficiency of Indian Point. Also, the project might not be that environmentally sound. Hydro power sounds clean since it comes from water flowing through dams way up in Canada. Still, some green groups are raising a stink because the construction might endanger fish and cause pollution.

State officials are also not telling New York consumers that this whole effort might do little to stop the spiraling cost of energy, people with direct knowledge of the project tell me. Project supporters say while reducing CO2 emissions, CHPE will lower rates by $17.3 billion over 25 years. Sounds like a lot until you put it through a little logic: The “reduction” will be more than offset by massive increases in energy costs because of the inefficient green push, and Hochul won’t dare increase the supply of energy through more efficient nuclear power or she will face the wrath of the Democratic party base. Ditto for more natural-gas-created electricity.

Blackstone as a green savior also comes with a significant caveat: Hydro-Quebec, the Canadian utility supplying the power to TDI, is allowed to throttle some of its power supply during the winter months. Canadian winters are notoriously harsh and when power is needed closer to home, less energy might flow to New York City. (Hydro-Quebec says it can only throttle “capacity,” which it calls an “insurance product,” and will deliver power all year.)

As we all know, winters in New York are also no bargain. Thus this deal is no bargain — unless you’re Blackstone.

A Hochul rep didn’t return calls and emails seeking comment.