Standoff Between National Grid and New York State Over Gas Pipeline is Impacting Homeowners and Businesses
November 18, 2019
In May 2019, National Grid – the utility company that provides natural gas to approximately 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island – announced a moratorium on the processing of applications for new gas service. The moratorium was imposed following a May 15, 2019 Decision by the New York State Department of Environmental Conservation’s (DEC) denying a water-quality permit for a portion of a proposed 23-mile underwater gas supply pipeline, known as the Northeast Supply Enhancement (NESE) Project. Since that time, National Grid has denied about 2,600 requests for gas service from new residential, commercial and industrial customers.
According to National Grid, the region’s demand for natural gas is expected to rise by 10 percent over the next decade and, without the NESE, its existing infrastructure simply does not have the ability to handle this increased demand. The NESE seeks to expand the existing 10,000-mile Transco pipeline system that currently serves the northeastern and southeastern states. The NESE would deliver an additional 400 million cubic feet a day of fracked natural gas from Pennsylvania, through New Jersey, and beneath Raritan Bay and Lower New York Bay, to an existing connection located three miles off the coast of Rockaway, Queens. If completed, National Grid says the pipeline would increase the company’s capacity by 14 percent. In July 2019, National Grid’s residential customers received an email stating that it would not be able to expand gas service unless the NESE pipeline is approved, and urged customers to sign a petition “to express support for this critical energy project” that would be sent to Governor Andrew Cuomo, the DEC, and federal, state and local elected officials.
Some opponents of the pipeline, including Governor Cuomo and New York City Mayor Bill de Blasio, argue that it would further the region’s reliance on fossil fuels and is incompatible with the state’s goals to shift to renewable energy in the coming years. Other opponents claim that the pipeline will have significant adverse impacts on the environment. In a May 15, 2019 Press Release announcing its decision to deny the permit application for the NESE, the DEC said that “construction of the proposed project would result in significant water quality impacts from the re-suspension of sediments and other contaminants, including mercury and copper” and “would cause impacts to habitats due to the disturbance of shellfish beds and other benthic (bay-bottom) resources.” Many have been critical of National Grid’s actions, claiming that the moratorium is nothing more than a political ploy to get the pipeline approved.
As the standoff between the State and National Grid continues, residents and businesses, and even the region’s economy, are suffering hardship from the inability to connect to natural gas service. According to Vision Long Island, a nonprofit smart growth advocacy group, the moratorium is having an economic impact on downtowns and small businesses that has gone mostly unreported. The LI Herald reported back in June that the Mayor of the Village of Lynbrook has said that there are multiple businesses in the village that are ready to open, but can’t do so without gas service, causing “a tremendous hurt to the village.”
Large-scale developers of residential, mixed-use and civic projects are also experiencing significant financial hardship from the moratorium. This is particularly true where projects were under construction prior to the moratorium and reasonably expected to connect to gas service. These projects either sit unoccupied waiting for the moratorium to end, or have incurred the additional expense of converting their heating, cooking and back-up generator systems, to alternative energy sources, such as electric, oil and propane, which are all more costly and produce greater greenhouse emissions. For example, the recently completed 30-unit Blake Hendrix affordable housing project in Brooklyn was denied a gas hook up in June, and now the project sits vacant causing the developer to lose about $30,000 per month. In Commack, the developer of a nearly completed 64-unit assisted living facility that previously received a gas availability letter from National Grid, but did not submit a complete connection application prior to the moratorium, was forced to make a last minute conversion to propane, rather than have its building sit unoccupied. The developers of a new arena at Belmont Park have made similar contingency plans to have the project served by propane if a natural gas connection is unavailable.
While the moratorium remains in place, National Grid began restoring service to over 1,100 customers who previously disconnected from the system after Governor Cuomo threatened in October to impose millions of dollars in fines against the company. It is not, however, taking actions to provide new service connections. On November 12, 2019, Governor Cuomo issued a letter to National Grid giving notice of the State’s intent to revoke the utility company’s certificate to operate its downstate gas franchise. The Governor also threatened National Grid with legal action if the gas provider doesn’t find a way to take on new customers.
As the months-long wrangling continues, residents and local businesses are stuck in limbo and will continue to endure significant financial hardship until the fate of the region’s gas supply is determined. In light of the Governor’s recent actions, and National Grid’s commitment to restore service to its previous customers, those still affected by the moratorium are hopeful that this standoff will come to an end soon.