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New York Cancels Hydro-Quebec Contract

March 28, 1992

ALBANY, N.Y. (AP) _ New York state canceled a $13 billion contract Friday for power from a utility whose hydroelectric project in northern Quebec is under attack from Indians and some environmentalists.

Gov. Mario Cuomo said he had accepted a recommendation from Richard Flynn, head of the New York Power Authority, that the contract be canceled for economic reasons.

The governor said the state no longer needs the Canadian power from Hydro- Quebec.

″Circumstances have changed dramatically since this contract originally was signed in 1988,″ Cuomo said.

Flynn said he had attempted to negotiate a better deal for the power from Hydro-Quebec and that the contract was scrapped because those negotiations had failed.

Opponents of the $62 billion project said the cancellation could put its second phase in doubt because New York was to have been a major customer.

″I think the whole project’s going to collapse if New York doesn’t have a contract to buy the power,″ said Judith Enck of the New York Public Interest Research Group.

New York officials had said the power sold to the state would have come from the entire Hydro-Quebec system, and not necessarily from the controversial project. A spokesman for Hydro-Quebec, which is owned by the Quebec government, said New York’s action would not affect the second phase, known as the Great Whale project.

″It has no effect on the ongoing process or the realization of the project,″ said Jacques Guevremont. ″Maybe some environmentalists will understand now there is no relation between the contract and the project.″

The project, which involves three phases of construction, has been a centerpiece of Quebec Premier Robert Bourassa’s economic development plan, but U.S. and Canadian environmentalists and the 10,000 Cree Indians of northern Quebec have persistently fought it.

If the entire project is completed, it would divert three rivers and flood an area of 1,600 square miles, half again as large as Rhode Island.

The Crees, one of the Earth’s last remaining hunter-trapper societies, contend the first phase, already completed, has disrupted nature, poisoned fish with mercury, ruined traplines and threatened their traditional way of life.

In September, a Canadian judge ordered the Canadian federal government to carry out a new environmental assessment.

Hydro-Quebec opponents also have urged Vermont not to buy electricity from the project.