Six Feet Under
The pair of 10-centimeter-thick cables begins in a building located in New Haven, CT, connects to a set of digital power valves, travels beneath the Long Island Sound—buried under approximately one to two meters of muck—and comes ashore 70 kilometers east of Manhattan to feed an identical set of valves located on the site of the deactivated Shoreham Nuclear Power Station, which stands in eerie silence as a symbol of the public concerns that crippled the U.S. -nuclear-power industry. The $6 billion plant was fully built but had never operated commercially when local opposition, led by then governor Mario Cuomo, forced its closure in the late 1980s. The Cross Sound Cable’s greatest enemy was an equally popular politician from across the sound: Connecticut at-torney general Richard Blumenthal. Like Eliot Spitzer, his better-known New York counterpart, Blumenthal is both an activist attorney general and a likely contender for the Democratic nomination to challenge his state’s Republican governor in 2006. Grilli says that TransÉnergie handed Blumenthal a juicy issue, and the ambitious pol made the most of it. “They got swallowed up,” says Grilli.
The Cross Sound Cable saga began in the late 1990s. Grilli’s operation was desperate for electricity. Demand for power on Long Island grew larger every year, and reserve capacity was getting thin. After summer heat waves in 1999, power supply became a high-profile issue. The authority invited power producers to build new plants on Long Island, but it also wanted to access the relatively cheap power available in New England. Trans-Énergie offered a deal the authority couldn’t refuse: it would create a subsidi-ary, the Cross Sound Cable Company, that would build a line under the sound, at its own expense. The subsidiary, coöwned by Connecticut utility United Illuminating, would then rent capacity on the line to the authority. This would be the first such “merchant” line in the United States, and TransÉnergie knew how to exploit digital switching technology to make it work.
Electricity flows over power grids at the mercy of the laws of physics. As consumption levels shift from moment to moment, electrical energy follows the path of least resistance from generators to users. The result is that a power company’s grid isn’t limited to delivering electricity to its own local customers but can also, at any moment, become the unpaid carrier of power flowing automatically from high-supply areas to high-demand areas outside its own region. That makes building new power lines—which traditionally use alternating current (AC)—a very tough sell for an independent investor, explains -Laurence Kirsch, a transmission expert with Madison, WI-based consultancy Christensen Associates. “When you build an AC transmission facility, lots of people get to use it without paying just because of how power networks work.”
In contrast, TransÉnergie has precise control over the Cross Sound Cable. Those digital switches at the converter stations on either end, designed and built by Swiss power equipment firm ABB, consist of transistors sized for the grid’s kilovolt power levels; acting much like valves, the switches on one end convert a specified quantity of the grid’s AC power into direct current (DC) and send it down the line to be converted back into AC on the other end. The result is that the Cross Sound Cable Company can lease space on its line and then program the switches to deliver the specified kilowatt-hours of electricity. As on a private toll road, there are no free riders: “If people don’t pay, we close the road,” says Donahue.
The Federal Energy Regulatory Commission, which oversees wholesale power markets, welcomed TransÉnergie’s proposal as a boon to competition in the New York and New England power markets. But Blumenthal was convinced that the cable was a bad deal for his state. He charged that the project was “anticonsumer and antienvironment.” He wasn’t far off base: economists generally agreed that the cable would siphon off cheap power, lowering supply and raising prices in Connecticut. And to avoid interference with boat traffic and fishing, permits that were issued to TransÉnergie required that it bury its cables about two meters below the seabed, which meant plowing a trench through cultivated oyster beds in New Haven Harbor.
Blumenthal came out swinging, in both the media and the courts. He challenged a decision made by the Connecticut Siting Council, the state’s overseer of power infrastructure projects, which had ruled in January 2002 that the long-term need to expand electric transmission capacity in the region outweighed any short-term cost to Connecticut consumers and temporary disruption of the oyster beds. Blumenthal also issued a series of press releases predicting that the Cross Sound Cable would cause “irreparable environmental damage while offering no benefit to Connecticut”—a stance that garnered a substantial amount of public support.
On April 9, 2002, a Connecticut Superior Court judge rejected Blumenthal’s request for an injunction against the Cross Sound Cable Company, clearing the way for installation of the cable. But two months later, after technical blunders by the company, Blumenthal was back on top. The Connecticut legislature had passed a moratorium on consideration of permits for cross-sound infrastructure projects. And in May, while burying the cable below the sound, ABB struck rock in the seabed, which kept short sections of the cable shy of the minimum depths specified in the transmission company’s permits. To operate, the company now needed amendments to the permits. But Blumenthal asserted in a legal opinion that granting them would violate the legislature’s newly enacted moratorium. So for the next year and a half, TransÉnergie was trapped: it couldn’t operate without new permits, and it couldn’t get new permits with the moratorium in place.