To those whose homes and businesses would lie in the shadow of 11-story electric transmission pylons, the $1.6 billion New York Regional Interconnection is a project of unimaginable size and complexity.
But the proposed 190-mile-long power line is simply the latest and greatest endeavor of one of Toronto’s premier energy-project financiers.
He is Robert McLeese, and in his home country’s clubby energy circles, his surname conjures images of competency and success.
He is heir to a small but thriving network of niche renewable-energy plants and other investments that span the continent, from southern California to central Pennsylvania to northern Ontario.
It’s an empire that his father, Willis McLeese, forged from a half-century of success in, of all things, the commercial freezer industry. Since at least the 1980s, the younger McLeese has been by his father’s side, sealing ambitious deals in Canada and the U.S.
One of their biggest prizes is a biomass power plant that they built in the early 1990s on a California Indian reservation, where tough state environmental regulations do not apply. It’s a scenario strikingly similar to NYRI’s current effort to win new federal powers that would allow it to bypass the normal state approval process.
In recent years, McLeese has begun to emerge from his father’s shadow. In 1990, he founded Access Capital, a small consulting firm in Toronto’s financial district that claims it has secured financing for more than $1.5 billion in energy projects.
McLeese was also among a small cadre of movers and shakers who turned a loose group of small power generators and banks into a major player in the province’s energy industry, the Association of Power Producers of Ontario.
That role has earned McLeese spots on influential committees and given him access to some of Canada’s most powerful politicians. It’s given him the capital and the pull to make the idea of building a 1,200-megawatt power line across the Empire State seem like a natural next step.
But make no mistake: NYRI is the biggest thing McLeese or his industrialist father has ever tried.
“He’s rolling the dice pretty big here,” says Tom Adams, who heads a Toronto-based think tank, the Energy Probe Research Foundation, and sits on a government-backed energy policy board with Robert McLeese.
“It’s just so huge,” Adams says. “I think he’s capable of it, but this is a project that would be a challenge for a huge corporate conglomerate.”
After all, the mammoth development now known as NYRI nearly collapsed under its own weight three years ago.
At that time, the project was under the leadership of Richard Muddiman, an Ontario energy entrepreneur who first dreamed up the idea of using railroad rights-of-way to get surplus power from the Utica area to New York City.
But the plan – then known as Pegasus – never seemed more than a mom-and-pop operation. It sputtered out after Muddiman yielded to community protests and agreed to bury the power lines through environmentally sensitive areas along the Delaware River.
McLeese jumped in sometime in 2005. The project soon returned with renewed vigor and sophistication. Muddiman stayed on as the company president, but McLeese had clearly taken charge.
The company – rechristened NYRI – announced its existence in March with a slick public relations campaign that touted the power line’s ability to cut downstate electric costs and to provide the transmission capacity needed to foster the development of upstate wind farms.
In its new incarnation, NYRI enlisted some of the most powerful law firms and lobbyists in Albany and Washington to wage the regulatory fight.
The team seized upon an obscure provision in last year’s Energy Policy Act that would allow NYRI to skip state regulators and petition the federal government instead. Opponents to the power line quickly surmised that NYRI was a much more serious adversary this time around.
They were right. The McLeese family, after all, has fought – and won – its share of development battles.
McLeese’s grandfather, Alexander, was a newspaper editor who served as mayor of Oshawa, Ontario, and developed some of the city’s first apartment buildings, according to a 2002 story in the Owen Sound Times that detailed the family’s business history.
Robert’s father, Willis, proved his own business acumen in the mechanical refrigeration business after World War II as horse-drawn ice wagons were fading from use. He worked his way up to president of TransCanada Freezers, which owned dozens of cold storage plants in Canada and the U.S. by the time McLeese sold it in 1982.
That’s around the time the McLeese family took over a Delaware holding company called American Consumer Industries and turned it from an owner of warehouses to a builder of niche power plants.
“If you’re in the cold-storage business, you’re necessarily in the electricity business, because electricity is your No. 1 operating cost,” said Adams of Energy Probe. “(Willis McLeese) kind of fell into it from there.”
With the McLeeses at the helm, American Consumer Industries and its subsidiaries built a handful of small, waste coal-burning power plants in Pennsylvania, Utah and Montana in the early 1990s.
But the family’s biggest regulatory win was found on the tribal land of the Cabazon Band of Mission Indians in Mecca, Calif. That’s where the McLeeses opened a 47-megawatt biomass power plant in 1992, after a seven-year approval fight.
The McLeeses repeatedly rejected claims that they chose the site to skirt public opposition and California’s strict environmental regulations.
However, the locals, who saw the plant as a threat to Riverside County’s tourism industry, didn’t buy it, according to an account in The Toronto Financial Post at the time. They brought the company to court.
The situation has parallels with upstate New York’s current fight against NYRI. So, it’s worth noting that in Mecca, Calif., the McLeeses eventually won.
The family has since gone on to found a renewable energy firm called EcoEnergies. The McLeeses are in the process of building a 1,500-home development on Lake Huron’s Georgian Bay that features a golf course inspired by California’s famous Pebble Beach.
However, for all of the experience Robert McLeese has brought to NYRI, the company’s attempts to sell the project to a skeptical upstate public have stumbled.
Such power lines are never popular with the communities they cross. But NYRI, which would provide little to no benefit to power grids north of Orange County, has drawn more ire than one might expect.
Notably, the project has received only lukewarm support from the community it promises to help most: New York City.
Efforts to play down the company’s Canadian pedigree haven’t helped. The company, for instance, has assumed an Albany address and a name that touts “New York.” A group of hired guns – lawyers, engineers and public relations specialists – has provided the only public faces for the project.
McLeese, for his own part, did not respond to repeated requests for an interview from the Sunday Record. Some feel such tactics have contributed to a perception of secrecy and conjured images of the nameless, faceless developer who comes in and rapes the landscape for profit.
Gavin Donahue, who heads New York’s Independent Power Producers Association, said the perceived secrecy has even helped divide his own membership about NYRI. They’re exactly the constituency one would expect to rally to its cause.
“They haven’t been forthcoming at all,” Donahue said. “It’s kind of hard to build public support for a project when you don’t know who’s behind it.”
By Brendan Scott
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