LIPA's share of Canada-to-NYC power line will cost $810M over 25 years

LIPA trustees on Wednesday approved a measure that will obligate the authority to pay $810 million in annual installments over the next 25 years, starting at the end of 2026, for its share of a $6 billion power line from Canada to New York City.

The 339-mile Champlain-Hudson Power Express transmission line is chiefly a project to benefit New York City with green hydropower, an injection of power that also helps the state and LIPA meet aggressive climate-law mandates.

LIPA’s share of so-called renewable-energy certificates from the Champlain-Hudson power line amounts to about $37 million a year over the contract period, a senior LIPA official said.

Announcement of the $810 million obligation came at a LIPA board meeting at which LIPA also announced it was pausing de-enrollments in its discounted Household Assistance Rate Program and suspending service shutoffs for low- and moderate-income families following the government shutdown’s impact on a related Home Energy Assistance Program, which is indefinitely suspended. LIPA’s program uses HEAP enrollments to determine eligibility for the Household Assistance Rate Program.

Also at the board meeting, PSEG Long Island announced that it advanced to the No. 1 spot among large eastern utilities in the JD Power business customer satisfaction survey for 2025. PSEG Long Island had been 11th in the survey last year.

The Champlain-Hudson power line’s goal is to "reduce New York City’s reliance on fossil fuels by increasing imports of renewable energy from surrounding regions, as a means to displace energy otherwise produced by in-city fossil-fired power plants," according to LIPA board materials. LIPA also could benefit from a reduced summer bottleneck for power that occurs in the downstate region when the new cable is up and running, the official said.

Electric utilities across the state are obligated to help fund the state’s purchase of the certificates based on their percentage of the state’s total power load. LIPA’s share of the statewide electric load is 13%, resulting in $810 million.

LIPA as an independent authority is not directly under the jurisdiction of the state Public Service Commission, which approved the cost-sharing mechanism, but LIPA has a board policy that "requires [it] to participate in the state’s renewable energy goals," according to board material.

The special certificates, called Tier 4 RECs, are "very focused on New York City, [on] bringing renewable energy into the city," said Gary Stephenson, vice president of power supply at LIPA. The line originates in Quebec and terminates at Astoria.

NYSERDA pays the developer for the cost of the RECs then seeks recovery of them based on a utility’s load ratio across the state, Stephenson said. "Big number, of course," he observed.

The contract gives LIPA and any future LIPA board the ability to terminate the payments "for cause."

LIPA in June entered into a similar agreement with the New York State Energy Research and Development Authority, which is also overseeing the Champlain-Hudson certificate program, which also commits LIPA to pay a proportionate share of the cost of NYSERDA’s renewable energy certificates from onshore solar and wind farms throughout the state.

LIPA trustees on Wednesday also approved an agreement that authorizes the utility to enter a new 10-year contract for generating capacity from two small power plants in Far Rockaway that had fallen into disrepair and were slated to be decommissioned. By securing a 10-year, $91 million contract with LIPA, the plants’ owner is able to get outside fund guarantees to help pay for the repairs and keep the plants operating.

LIPA’s agreement with MPH Rockaway Peakers Holdco is for capacity from the Far Rockaway plants known as Bayswater and Jamaica Bay, which were originally built to serve the LIPA Far Rockaway territory more than 20 years ago. Hull Street, which owns the plants, had informed LIPA that it had planned to deactivate the plants "due to the high costs of restoration and maintenance," according to LIPA material.

LIPA’s contract with the plants starts in March and continues through April 2035.

PSEG Long Island secured the top spot in the JD Power 2025 business customer satisfaction study with a score of 627 out of a possible 1,000. In doing so it surpassed other regional utilities, including sister company PSE&G, which scored 623, and Con Edison, which scored 620. Last year, PSEG Long Island scored 734, a higher score, yet was second to last among large eastern utilities. JD Power redesigned the survey this year and prior scores are not comparable, the company said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.