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Bad planning raised Astoria plant costs

In a statement issued on the same day, the authority refuted Hevesi's report, maintaining that cost increases for the 500-megawatt plant under construction "reflect real market conditions which make the estimate of any large construction project imprecise until actual construction bids are received."

Since no giant base-load generators have been built in the city for nearly 25 years, the power authority said it had no comparison for this recent project's cost estimate.

Hevesi's audit released May 12 found the Poletti Power Plant's projected cost has spiked 73 percent to $650 million from its original $375 million due to faulty estimates. The audit suggested that if the authority had made accurate projections, it might have decided to forego the project or pursued other options.

The Poletti Plant is being erected on a 47-acre site in Astoria overlooking the East River. Heralded as one of the cleanest and most efficient plants in the city, the combined cycle generator will burn natural gas. Adjacent to an 875-megawatt plant, it is expected to open sometime next year.

The audit was also critical of the power authority's "PowerNow!" project, a $640 million initiative in 2001 that built six small New York City plants to counter a growing energy shortage. The plants cost 42 percent more than projected and lost $175 million during their first two years of operation, the audit said.

"New York City needs reliable, affordable and clean power, but the need for power is no excuse for wasting valuable public resources," said Hevesi, who is from Forest Hills. "This audit is a red flag that (the authority) is not managing these enormous public assets based on sound business practices. (It) is a textbook case of an authority adrift."

In its defense, the power authority said the plants have prevented a number of city blackouts and brownouts. Power outages are expensive, and the audit failed to take into account the money the plants have saved the city, the authority said.

The authority also said Hevesi ignored the environmental benefits of the new plants, which are cleaner and more efficient than traditional power plants.

Reach reporter Matthew Monks by e-mail at news@timesledger.com or call 718-229-0300, Ext. 156.

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