Astoria Lawmakers Blast Power Plant Proposal
In an all-out assault against proposed new power plant in their district, Astoria lawmakers said the area is already inundated with them. They added that the financing for the 1,000-megawatt facility is illegal and goes against the spirit of September 11 recovery plans.
Assemblymember Michael Gianaris has vowed to sue to prevent use of Liberty Bonds to finance construction of the Astoria Energy Facility; Congressmember Carolyn Maloney has asked Governor George Pataki to call an immediate halt to plans to use the Liberty Bonds and city Councilmember Peter Vallone Jr. called on state Attorney General Eliot Spitzer to investigate the Astoria Energy contract to sell most of its power output to Con Edison.
Each legislator’s district includes the site for the proposed power plant, at the foot of Steinway Street. All three denounced the proposal at a City Hall press conference last Friday. Public Advocate Betsy Gotbaum also participated and joining the event were Tony Gigantiello, president of Queens-based CHOKE (Coalition Helping to Organize A Cleaner Environment); Rudy Sarchese, president of the Astoria Ditmars Homeowners and Tenants Civic Association; and a number of concerned Queens residents.
The previous day, the New York Liberty Development Corporation had approved the award of $400 million to Astoria Energy in tax-exempt bonds under the Liberty Bond program enacted after September 11 to help replace commercial space in lower Manhattan.
Astoria Energy, a Massachusetts-based subsidiary of SCS Energy, won approval of the power plant proposal two years ago, but had been unable to secure financial backing for the plan, until now. The plant is estimated to cost $850 million.
Earlier this year, state leaders reportedly helped get Con Edison to enter into a 10-year contract to purchase electricity that will be produced at the facility. Construction is scheduled to start next summer and to be completed by 2006.
Gianaris sounded the alarm about the proposed use of Liberty Bonds to finance the project at a Liberty Development Corporation hearing about 10 days ago. He charged at the press conference, "It is a stunning act of hypocrisy by the governor to award Liberty Bonds for this project. The bonds are being used as a slush fund for the governor’s friends."
Gianaris, like the other two elected officials a Democrat, said that under the terms of the Liberty Bond program, it is a misuse of the bonds to build a power plant in Queens because the program limits use of the bonds to finance construction of commercial space in Lower Manhattan.
Maloney (D), whose district covers parts of Manhattan and Queens, including Astoria, declared, "It’s wrong to divert 9/11 aid from the areas most in need to a distant power plant project widely opposed by the Queens community. This project is way off the mark of what Congress intended for the use of Liberty Bonds. These bonds were meant to help revitalize the areas most devastated by September 11, not to finance yet another polluting power plant in the already overburdened neighborhoods of Western Queens."
There are some 10 power plants located in Astoria and Long Island City. They produce about half of the electric power used in New York City.
At Friday’s press conference, Maloney released a Congressional Research Service memo which states, "It is unlikely that the [Job Creation and Worker Assistance] Act [of 2003] would permit Liberty Bond financing for the construction of a public utility outside the Liberty Zone."
The act was passed in early 2002 and provided up to $8 billion in Liberty Bonds that year.
Charles A. Gargano, president of the Empire State Development Corporation in the Pataki gubernatorial administration, runs the Liberty Bond program. He said the financing for the Astoria Energy project falls under a provision of the law that set aside $2 million of the bonds for commercial projects outside of Lower Manhattan but within New York City.
But, according to the Congressional Research Service memo from which Maloney quoted:
"This language does not explicitly allow for the construction of public utilities that are outside of the Liberty Zone yet still in the city of New York, even with the requisite 100,000 square feet of usable office space. According to the report by the Joint Committee on Taxation, ‘public utility property... located outside the Zone cannot be financed with the bonds.’ Thus it appears that the construction of a public utility outside of the Liberty Zone with Liberty Bonds was intended to fall outside of the definition of a qualified use."
Gianaris had previously stated that this argument would be the basis of the suit he expects to bring to block use of Liberty Bonds for the Astoria Energy project.
Vallone, beside asking the state attorney general to investigate Con Ed involvement in the proposed project, also asked Spitzer to look into the Liberty Bond issue.
Vallone (D) stated, "The air in Queens stinks and this deal stinks and is part of a process that reeked from the beginning. First, the state rammed this plan through the [Public Service Commission] Siting Board against the will of an oversaturated community. Then the state rigged a deal with Con Edison to get this company a 10-year contract in order to finance the project. And now, a state board is attempting to inappropriately use Liberty Bonds to fund this power plant."
Gianaris said the Assembly is also looking into the 10-year contract because future rate payers will pay more for the electricity Astoria Energy will sell to Con Ed.
"Con Ed is paying too much for the power, and there will be other projects that are better for the environment providing cheaper power," Gianaris said.
Vallone added, "In addition to stopping the issuance of Liberty Bonds to fund power plants, we need to know the underlying motives behind these arrogant actions. Serious questions have been raised and we demand answers now."
Gotbaum stated, "Liberty Bonds are a scarce commodity. Therefore we must carefully weigh the costs and benefits of every Liberty dollar we spend. We need to rebuild our streets, build buildings that can house company offices, create commercial areas that will attract out-of-towners to come to town and invest in New York City. The proposed Astoria Energy project would do none of these things and is a violation of the spirit, if not the letter, of the law that authorized the sale of Liberty Bonds."