In the face of mounting government pressure, National Grid has agreed to lift its self-imposed moratorium on new natural gas service for Long Island, Queens and Brooklyn for the next two years and pay a $36 million fine to the state.
Gov. Andrew Cuomo had threatened to pull Natural Grid’s downstate franchise earlier this month if the utility continued to refuse new service.
National Grid said it will connect customer applications that were put on hold due to the moratorium that it imposed in May and start processing all new applications. In addition, the company will offer $7 million in customer assistance to address hardships as a result of the moratorium, according to a National Grid statement.
National Grid has also agreed to $8 million for new energy efficiency, gas conservation measures designed to relieve stress on the system and reduce peak-day gas usage during this two-year period.
“We understand the frustrations of everyone who experienced a delay in service during this period and regret that we did not provide more notice or explanation to our customers about the moratorium,” Badar Khan, interim president of National Grid U.S., said in the statement. “We appreciate the opportunity to work with the governor’s office and the Department of Public Service to address these challenging issues.”
National Grid has been pushing for the Northeast Supply Enhancement Project, a $1 billion pipeline expansion by Williams-Transco, that the company says would increase natural gas capacity in the area by 14 percent, delivering 400 million cubic feet of natural gas per day. The utility insists that without it, a natural gas shortage is likely this winter, which is why it enacted the moratorium in the first place.
However, Cuomo asserted there was no legitimate need for the moratorium and that the company’s only plan for future supply was based on the “speculative” and “risky” pipeline expansion project.
Opponents of the pipeline expansion say broadening the availability of fossil fuels like natural gas runs counter to the drive to convert to renewable energy sources. They also claim that companies like National Grid are overstating the need for increased supply of natural gas because of the rise of renewables and improvements in energy efficiency, and some say the self-imposed moratorium is unnecessary and nothing more than a bargaining chip for utilities to use to get the project approved.
National Grid said it will present options within the next three months to meet New York’s long-term supply needs to the communities it serves. The company has committed to present the findings of its analysis through a series of public meetings in Brooklyn, Queens, Nassau and Suffolk counties, “designed to facilitate a dialogue with customers, residents, advocates, business leaders and local elected officials.”
An independent monitor will be appointed by the Department of Public Service to oversee National Grid’s compliance with this agreement.
Economic development officials praised the lifting of the natural gas ban.
Long Island Association President Kevin Law was thrilled with the agreement.
“It is terrific news for the Long Island economy that the moratorium is being lifted and important projects can move forward again and thus we commend the governor and National Grid for resolving this short term crisis and encourage all stakeholders to plan for a longer term solution to meet the region’s natural gas needs,” Law said via email.
Kyle Strober, director of the Association for a Better Long Island said Thanksgiving just got redefined for the Long Island business community.
“With this announcement our region’s executives can now move ahead with projects, investments and plans, that had been on hold, confident that their request for natural gas will be approved by National Grid,” Strober said via email. “Governor Cuomo must be commended for confronting this issue head on and forcing an end to a moratorium that would had a devastating economic impact had it been allowed to continue. There couldn’t be a better item on the menu this holiday.”