Judge Hellerstein Makes Port Authority Pay for Con Ed Station Destroyed by Demolished Building 7

Con Edison Wins $17.5 Million Ruling on Trade Center Attack

By David Glovin

July 28 (Bloomberg) -- The Port Authority of New York and New Jersey must pay Consolidated Edison Inc., owner of New York City’s utility, and its insurers $17.5 million stemming from the destruction of a substation in the 2001 terrorist attacks on the World Trade Center.

U.S. District Judge Alvin Hellerstein yesterday ordered the Port Authority, owner of the trade center site, to make the payment. His ruling came in a 2002 lawsuit that New York-based Con Edison and its insurers brought against the agency, which operates the New York-area’s bridges, tunnels and airports.

The Port Authority had already paid $20 million on the claim and Con Edison was seeking $17.5 million more to cover the replacement value of the substation. The judge rejected the Port Authority’s claim that it shouldn’t have to pay the additional sum until it receives full proceeds from its own insurers.

“The Port Authority shall make available to Con Edison, without further delay, the remaining insurance proceeds,” Hellerstein wrote in yesterday’s decision.

“We are reviewing the decision,” Steven Coleman, a Port Authority spokesman, said yesterday.

The trade center collapsed after terrorists who’d commandeered two passenger jets slammed them into the twin towers on the morning of Sept. 11, 2001. Another building in the complex, 7 World Trade Center, caught fire in the attack and collapsed, destroying Con Ed’s substation.

The Port Authority had leased a parcel of land to Con Edison in 1968 to build an electric power substation. In the 1980s, 7 World Trade Center was built atop the substation.

The case is Con Edison v. The Port Authority, 02-cv-7188, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in Manhattan federal court at dglovin@bloomberg.net.

Last Updated: July 28, 2009 00:01 EDT