Real Estate and Private Equity Billionaires Set to Profit From NY Clean Grid Investments

By relying on public private partnerships, New York is virtually guaranteeing that wealthy businesses with deep political connections will substantially benefit from state investment.

Real Estate and Private Equity Billionaires Set to Profit From NY Clean Grid Investments
New York Gov. Kathy Hochul

This article by Rob Galbraith was first published at Eyes on the Ties, a news site by

A pair of electric infrastructure projects meant to help New York State meet goals for transitioning off of fossil fuels will also deliver huge benefits to two billionaire-owned firms at the commanding heights of corporate power.

Clean Path New York and Champlain Hudson are meant to advance the goals of the Climate Leadership and Community Protection Act (CLCPA), New York’s ambitious climate legislation passed in 2019. The CLCPA set a goal of reducing the state’s greenhouse gas emissions 85% by 2050. Notably, the CLCPA also requires that at least 35% – with a goal of 40% – of climate investments benefit frontline communities that have been disproportionately impacted by pollution from the fossil fuel industry and are being hit first and hardest by the changing climate.

As the New York Times reported on November 29: “One line, called Clean Path New York, will stretch 179 miles from Delaware County in the Western Catskills to a substation on the East River. Another, the Champlain Hudson Power Express, will run a buried cable from Canada down the Hudson River to Queens. The Champlain Hudson line will be built and owned by the global investment firm Blackstone, while the Clean Path will be controlled by the New York Power Authority and private developers.”

By relying on public private partnerships to meet ecological, racial, and economic equity goals, New York is virtually guaranteeing that wealthy businesses with deep political connections will substantially benefit from state investment. This dynamic has already played out in the case of the Tesla solar panel factory built in Buffalo before the passage of the CLCPA as part of former Governor Andrew Cuomo’s Buffalo Billion economic development plan. In that case, the bid to build a $750 million factory was rigged to benefit a major regional developer and Cuomo campaign donor.

With Clean Path and Champlain Hudson, companies that will build the planned transmission lines and power generation projects are owned by the billionaires Stephen Ross and Stephen Schwarzman and have close ties to the New York State government, especially former Governor Cuomo.

Clean Path New York

Clean Path New York is a partnership between the New York Power Authority, Chicago-based electric power developer Invenergy, and energyRe, a subsidiary of the powerful New York City real estate developer Related Companies. Clean Path plans to build a “1,300MW, 176-mile underground and underwater HVDC transmission line from Delaware County to New York City and 3,800MW of new wind and solar capacity in upstate New York.” According to the Clean Path New York proposal, the project will provide benefits to disadvantaged communities in New York through $1.8 billion in benefits related to project-specific investment, $3 billion in avoided health costs from decreased use of fossil power, and a $270 million community investment fund investing in “workforce development, public health, and community programs to provide a pathway for members of our most vulnerable populations to emerge as a vibrant new green workforce.”

The privately-owned businesses involved in Clean Path will derive significant benefits as well. Forward Power, the joint venture between energyRe and Invenergy, will construct and own 60% of the power supply built through the project (with the remaining 40% to be procured from other private developers) as well as the southern segment of the new transmission system.

The New York Times noted that “Related could benefit from the project because the transmission line will put numerous renewable-energy credits on the market. Related and other building owners can buy the credits to reduce hefty penalties that Related says it will owe, under a new city law, for fossil-fuel energy used by its buildings.”

Related Companies and its energyRe subsidiary are owned by Stephen Ross, whose net worth was reported to be $8.3 billion as of December 10, 2021 by Forbes. Ross also owns the Miami Dolphins NFL franchise as well as the fitness chains Equinox and SoulCycle and the restaurants & pizza, Bluestone Lane Coffee, and Momofuku.

Related has benefited from billions of dollars in subsidies from the New York State government in recent years. Most famously, the firm’s massive Hudson Yards development in New York City received nearly $6 billion in tax breaks and other subsidies. ProPublica recently reported that, though Ross brought in $1.5 billion in income from 2008 through 2017, he was able to avoid paying any federal income taxes over that 10 year period because of losses claimed on his real estate investments.

Ross is extremely influential in New York State politics, and Ross and Related Company executives and corporate entities have been major supporters of former Governor Andrew Cuomo, under whose administration the Clean Path proposal was submitted. From 2005 through 2021, Ross gave at least $130,000 to Cuomo’s political campaigns. Jeff Blau, president of Related Companies and energyRe has given Cuomo at least $124,700. Bruce Beal, a president and partner of Related companies and executive vice president of energyRe, has given Cuomo at least $55,000. Four LLCs that share an address with Related Companies – AGS Ventures II, Improvement Fund, RMLC, and Upper East Lease Associates – have given Cuomo at least $221,100.

Current Governor Kathy Hochul, who announced the selection of the Clean Path proposal in September 2021, benefited from Ross and Related’s support of Cuomo as his lieutenant governor, though Hochul appears to have only received one donation from the firm directly, a $19,700 contribution from Related Sales LLC on the date of the primary election when Hochul became the Democratic Party nominee for lieutenant governor.

Champlain Hudson

Champlain Hudson is a planned 339-mile transmission line that would run from Quebec to New York City to connect hydroelectric power generation in Canada to the New York City grid. The project was initially approved by the New York State Public Service Commission in 2013 and was publicly endorsed by then-Governor Andrew Cuomo in May 2020 before current Governor Kathy Hochul’s September 2020 announcement of Champlain Hudson’s selection for the Tier 4 renewable energy credit program.

The transmission line will be owned by Transmission Developers, a subsidiary of the massive private equity firm Blackstone.

While the project has been pitched by the developer and by backers in government as helping New York to meet its commitments to reducing its dependence on fossil energy, critics of the plan like the Sierra Club have raised concerns that the new line will simply re-route hydroelectric power that is already on the grid without adding any new carbon-free power generation.

Champlain Hudson is also opposed by Indigenous communities in Quebec, on whose unceded lands the state-owned hydropower firm Hydro-Québec has dammed rivers for power generation, resulting in “the forced and brutal removal of our members from their traditional territories and their settlement on reservations that were not and are still not structured to ensure the economic well-being of our populations,” according to a letter sent by a group of Indigenous nations to the US Department Energy.

Blackstone, the owner of Champlain Hudson, is also a major fossil fuel investor and is the second-largest shareholder of Energy Transfer, the firm behind the controversial Dakota Access Pipeline.

Blackstone is chaired by Stephen Schwarzman, whose net worth was $38.3 billion as of December 10, 2021 according to Forbes. The firm has close ties to former Governor Andrew Cuomo through William Mulrow, a longtime Cuomo confidant who is a senior advisory director with Blackstone. 

Mulrow served as chairman of Cuomo’s 2018 re-election campaign, even as he was working at Blackstone. Prior to that Mulrow served as Secretary to the Governor, the top post in Cuomo’s executive chamber. In March 2020, Mulrow rejoined the Cuomo administration after the Governor appointed him to help head up New York’s coronavirus economic recovery.

Hamilton James, Stephen Schwarzman’s second in command at Blackstone, was a Cuomo appointee to the Port Authority of New York and New Jersey Board of Commissioners. James announced he was leaving Blackstone in December 2021.

Blackstone, and the subsidiary behind Champlain Hudson specifically, also have ties to current Governor Kathy Hochul.

TDI-USA Holdings, the Blackstone subsidiary building the Champlain Hudson transmission line, has retained the influential lobbying firm Bolton-St Johns. Karen Keogh, Hochul’s top aide, is married to Bolton-St Johns partner Michael Keogh. Michael Keogh was listed as a lobbyist for TDI-USA until an amendment filed in August 2021, shortly after Karen Keogh was appointed to her executive chamber position.

Another Bolton-St Johns partner, Emily Giske (who is also registered to lobby for TDI-USA), held a maximum $25,000 per plate fundraiser for Hochul in October 2021 for the firm’s lobbyists and clients.

A just transition away from the extractive, fossil-fueled status quo will necessarily entail a transition off of the economic model of wealth extraction and enclosure in addition to a transition in the fuels used to drive the economy. As can be seen in many of the large ventures undertaken in the name of climate action – including Clean Path New York and Champlain Hudson – projects built to suit the extractive economic model will further enrich and maintain the power of the already rich and powerful people even as they assist meeting some pollution and economic justice benchmarks. A truly just transition needs to be rooted in energy democracy, reparative justice and public development that is owned and operated for the benefit of all, not just the ultra-wealthy investors who underwrite the political class.

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