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Queens Chronicle

Gianaris Calls For Inquiry Into Proposed Astoria Energy Plant

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Posted: Thursday, November 13, 2003 12:00 am

Assemblyman Michael Gianaris, who has been a steadfast opponent of the proposed 1,000-megawatt SCS Energy plant in Astoria, is now calling for a state inquiry into whether the company has enough financing to move forward with its construction.

In addition, Gianaris is questioning the process that led Consolidated Edison to land a deal with the company. He led a group of State Assemblymembers who requested the Public Service Commission to hand over the details of the contract negotiations for the power plant.

At the crux of Gianaris’ argument is that there are other energy plants further along in production that would be more economically feasible and better for the environment. The assemblyman, who is a member of the state’s Environmental Conservation Committee, is threatening a subpoena if the Public Service Commission—which regulates the utilities industry—does not turn over the records of the negotiations.

“We are going to need to get more aggressive,” he said.

Con Edison signed a 10-year contract with Astoria Energy—a subsidiary of SCS Energy—in April 2003, to build the facility at the northernmost end of Steinway Street. Astoria Energy received state approval in 2001 to build the 1,000-megawatt facility.

The contract with Con Edison calls for the energy plant to be in service prior to the summer of 2006. However, Gianaris believes Astoria Energy should have already broken ground on construction for the project.

His questions over the construction schedule for Astoria Energy are made even more complicated by his inquiries into the original bidding process.

“The terms in the (request for proposals) made it very restrictive and kept many companies from qualifying,” he said. “Even though (Astoria Energy was) the highest bidder, I wonder whether that project is actually going to get built.”

Gianaris added, “Each day that passes without construction beginning increases the likelihood that the plant will not be ready in time to meet the requirements of the contract with Con Ed.”

However, Chris McGrath, a spokesman for New York Capitol Consultants, which represents SCS Energy, brushed aside Gianaris’ questions about financial problems.

“We have no problem with financing,” he said. “We’re working through the financing issues just as any project like this requires. This is a project that calls for spending billions of dollars, it’s not like you can just take out a home equity loan.”

He indicated that the book on the project is circulating through financial institutions, which are in turn doing their due diligence. McGrath expects SCS Energy to have the financing in place by the end of December, or the beginning of next year.

Construction would begin immediately after the financing is secured. McGrath said that construction would begin in the early part of 2004, and since it is industrial work, would not be dependent on weather issues.

Although Astoria residents have long fought the proliferation of power plants in their neighborhood, even the most ardent opponents conceded that Astoria Energy was attempting to build a cleaner power plant.

“It’s going to be a state-of-the-art facility,” Anthony Gigantiello, president of the Astoria-based Coalition Helping Organize a Kleaner Environment, said in 2001. “It’s going to be a whole new plant.”

CHOKE did not go so far as to support the construction of the plant, but it did sign a stipulation agreement with Astoria Energy to not oppose it. The agreement, which was also signed by then-Borough President Claire Shulman, called for Astoria Energy to give $4.8 million to various public works projects across the city.

Welcome to the discussion.