I also was thinking, wouldn't it be cheaper in the medium-run to move the 25Hz break rather than extend third-rail & build DC substation(s)?
New Haven Line rolling stock (M8s) can only run off of 60Hz AC; their transformers do not accept 25 Hz. Therefore, they're running on 700VDC LIRR-style from the phase break to NYP.
That's why the DC extension is necessary