by Robert F. Kennedy Jr.
This month, New York’s Public Service Commission will decide whether to permit a Canadian holding company, Fortis Inc., to acquire Central Hudson, the electric utility serving 375,000 mid-Hudson homes and businesses. PSC commissioners should consider Fortis’ history and the company’s future profitability strategies, which it ties to shale gas extraction.
In 2000, the Natural Resources Defense Council agreed to help the local opposition to Fortis’ proposed Chalillo Dam — a seven-megawatt hydroelectric project on the Macal River in an ecologically sensitive part of the Belizean rainforest. I represented these groups as a senior NRDC attorney. During the litigation that followed, we learned that Fortis had routinely lied about its proposed dam’s safety and its economic, environmental and geological impacts.
Fortis solemnly promised that the dam would not raise electric costs while concealing secret studies proving the opposite. In 2005, two years after the dam went live, Belize’s electric rates climbed 25 percent. Belizeans paid twice as much for electricity as their neighbors in Mexico and Guatemala. In 2008, when Fortis moved to jack rates another 25 percent, Belize’s newly elected government expropriated the company’s assets.
Fortis digitally removed nearby fault lines from the geological map it provided to regulators to deceive them about dire earthquake hazards at the proposed dam site. Only after the dam won approval and construction began did this become public.
Fortis knowingly lied when it claimed its dam would not harm wildlife. The project destroyed Central America’s last large habitats for endangered jaguars, tapirs and scarlet macaws.
Fortis hid its study showing hazardous levels of neurotoxic mercury in the Macal River, caused by another Fortis dam, until a year after its Chalillo Dam was complete. During that period, Belizeans continued to drink river water and swim, wash, bathe and fish — all activities perilous to their health.
These are only a few examples of Fortis’ willingness to deceive the public and government regulators while profiteering from reckless activities. If it gobbles Central Hudson, Fortis won’t build dams in New York. Nevertheless, the company will monopolize electric and gas delivery services that are both essential and dangerous when poorly managed. An already overstretched PSC will have to research, oversee and monitor Fortis to keep the company honest — with no guarantees of success, given Fortis’ history.
The recent news that we passed a frightening milestone — atmospheric concentrations of carbon dioxide now exceeds 400 parts per million — eclipsed a more heartening local study; New York state could be 100 percent carbon-free by 2030.
New York shouldn’t tie its energy future to a company that bases its future profitability on shale gas extraction. Fortis’ own investor information states that its profitability is linked to “the current environment of low natural gas prices and an abundance of shale gas reserves [that] should help maintain the competitiveness of natural gas versus alternative energy sources in North America.”
It also states that Fortis’ profitability is contingent on “no significant changes in government energy plans and environmental laws that may materially affect … operations and cash flows.”
As the PSC is aware, there is intense public opposition to the proposed deal among Hudson Valley cities, towns, and residents. These New Yorkers want our state to transition to clean energy and do not want Central Hudson sold to a company whose profitability depends on the increasing use of fracked shale gas.
PSC judges, in their recommended decision, concluded that the proposed merger’s detriments outweigh its benefits.
Only two New York utilities remain in the hands of U.S.-based companies: CH Energy (which owns Central Hudson) and Con Edison. Fortis’ proposal to buy Central Hudson represents the worst of globalization. The PSC should deny its application and keep a company, notable for its reckless corporate culture, from taking control of New York’s energy destiny.
Kennedy is senior attorney at the NRDC.