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Cuomo Threatens National Grid: Provide Gas or Lose Your License Cuomo Threatens National Grid: Provide Gas or Lose Your License
(32 minutes later)
Gov. Andrew M. Cuomo and a utility that provides gas to New York City and Long Island have been locked in a standoff since May, when New York regulators blocked the construction of a $1 billion natural gas pipeline that would have run from Pennsylvania to New Jersey and New York.Gov. Andrew M. Cuomo and a utility that provides gas to New York City and Long Island have been locked in a standoff since May, when New York regulators blocked the construction of a $1 billion natural gas pipeline that would have run from Pennsylvania to New Jersey and New York.
The utility, National Grid, says the pipeline is crucial to meeting the rising energy demand in the region and has imposed a moratorium, refusing to activate gas hookups for both new and returning customers.The utility, National Grid, says the pipeline is crucial to meeting the rising energy demand in the region and has imposed a moratorium, refusing to activate gas hookups for both new and returning customers.
On Tuesday, the fight took a sharp turn after Mr. Cuomo threatened to revoke National Grid’s license to operate in the southern part of New York.On Tuesday, the fight took a sharp turn after Mr. Cuomo threatened to revoke National Grid’s license to operate in the southern part of New York.
Mr. Cuomo, in a letter, accused the utility of “mishandling” its gas supply system and recklessly disregarding its obligations as a public utility when it issued the moratorium.Mr. Cuomo, in a letter, accused the utility of “mishandling” its gas supply system and recklessly disregarding its obligations as a public utility when it issued the moratorium.
The utility’s fundamental legal obligation “was to plan and provide for future needs,” the governor wrote. “You failed by your own admission.”The utility’s fundamental legal obligation “was to plan and provide for future needs,” the governor wrote. “You failed by your own admission.”
National Grid, which supplies gas to 1.8 million customers in New York City and on Long Island, said it would review Mr. Cuomo’s letter and respond accordingly.National Grid, which supplies gas to 1.8 million customers in New York City and on Long Island, said it would review Mr. Cuomo’s letter and respond accordingly.
“We continue to work with all parties on these critical natural gas supply issues on behalf of all our customers in downstate New York,” the utility said in a statement.“We continue to work with all parties on these critical natural gas supply issues on behalf of all our customers in downstate New York,” the utility said in a statement.
The moratorium has left some people in Brooklyn, Queens and Long Island in flux. Developers have been unable to provide gas to new buildings, business owners cannot obtain requested upgrades and homeowners have had to fight to get suspended gas service restored. Mr. Cuomo’s letter, sent to two National Grid executives, essentially boiled down to an ultimatum: either the utility would supply gas to all those requesting it, or the governor would seek to revoke its license in two weeks.
“At this point, a number of projects are in limbo because of uncertainty over the energy supply,” said Kathryn S. Wylde, the president of the Partnership for New York City, an influential business group.
Mr. Cuomo’s letter essentially boiled down to an ultimatum: either National Grid would supply gas to all those requesting it, or the governor would seek to revoke its license in two weeks.
“I’m not going to allow New Yorkers to be extorted,” Mr. Cuomo said in an interview on NY1 on Tuesday morning.“I’m not going to allow New Yorkers to be extorted,” Mr. Cuomo said in an interview on NY1 on Tuesday morning.
“They’re not the only utility in the world, and a lot of companies would like to have this franchise,” he added.“They’re not the only utility in the world, and a lot of companies would like to have this franchise,” he added.
Mr. Cuomo did not say whether he had spoken to other utilities about the future of National Grid’s downstate operation. It was unclear what steps, if any, the Public Service Commission, the state agency that regulates utilities, would take in response to Mr. Cuomo’s letter. A spokesman did not immediately respond to a request for comment.
The letter gave National Grid 14 days to provide a satisfactory plan to meet its customers’ demand for gas. Otherwise, the governor would direct the Public Service Commission, the state agency that regulates utilities, to begin proceedings to revoke National Grid’s license. Environmental groups have opposed the pipeline, arguing that it would destroy fragile ecosystems and undermine efforts to reduce New York’s dependence on fossil fuels.
Natural gas consumption in the United States increased 31 percent between 2009 and 2018, according to data from the United States Energy Information Administration. The increased demand was driven both by pricing and environmental concerns, analysts said.
“Natural gas is a lot cheaper and a lot cleaner than oil,” said Samuel Andrus, an industry analyst with the data firm IHS Markit.
The available supply of natural gas has also increased considerably in the last decade, but most of the production occurs far from New York, Mr. Andrus said. The existing pipelines are nearing capacity, and utilities are worried about their ability to supply gas when temperatures drop.
“When it gets to zero degrees, and it’s snowing and blowing like crazy, can you keep the furnace and the power and the lights on?” Mr. Andrus said.
The pipeline sought by National Grid was fiercely opposed by environmental activists, who argued that it would destroy fragile ecosystems and undermine efforts to reduce New York’s dependence on fossil fuels.
National Grid imposed its moratorium days after the pipeline plan was blocked, saying it could not guarantee a future gas supply for all its potential customers. In the months since, it has refused at least 2,000 requests for service.
“It made a lot of people unhappy, and it obviously made the political world go crazy,” Ms. Wylde said. “I don’t think it helps anybody’s cause to declare a moratorium. But perhaps it was the only way to communicate how dire the situation was.”
Last month, Mr. Cuomo ordered National Grid to restore gas to customers who had either moved to a new home or had temporarily turned off their service. He also said the utility could face millions of dollars in penalties and ordered an investigation.Last month, Mr. Cuomo ordered National Grid to restore gas to customers who had either moved to a new home or had temporarily turned off their service. He also said the utility could face millions of dollars in penalties and ordered an investigation.
In his letter, Mr. Cuomo said National Grid had “improperly denied service to over 1,100 households.”In his letter, Mr. Cuomo said National Grid had “improperly denied service to over 1,100 households.”
He also criticized the utility, saying it linked its future to the pipeline, which he called “risky at best,” and failed to explore other short-term or long-term options to provide gas from other sources.He also criticized the utility, saying it linked its future to the pipeline, which he called “risky at best,” and failed to explore other short-term or long-term options to provide gas from other sources.
“The choice was never between the pipeline or an immediate moratorium,” he wrote. “There were, and are, certainly other short-term solutions.”“The choice was never between the pipeline or an immediate moratorium,” he wrote. “There were, and are, certainly other short-term solutions.”
Among the alternatives Mr. Cuomo suggested were having gas delivered by truck or barge, increasing the use of renewable energy sources and finding ways to encourage customers to use less gas. National Grid also operates in upstate New York, where it provides both gas and electric service. Mr. Cuomo’s letter did not address the utility’s services there.
Critics of the governor have said those alternatives are not practical and have accused Mr. Cuomo of bowing to pressure from environmental groups without providing practical alternatives.
John J. Flanagan, the leader of the State Senate’s Republican minority, said in a statement that Mr. Cuomo’s letter showed “his failure to lead for the people of this state, and his willingness to cater to extreme environmentalists who have no real plan to solve this crisis.”
National Grid is not the only utility in New York to impose a moratorium in the New York City region. In March, Con Edison stopped new gas hookups in a large swath of Westchester County, saying its existing pipelines could not meet rising demand.National Grid is not the only utility in New York to impose a moratorium in the New York City region. In March, Con Edison stopped new gas hookups in a large swath of Westchester County, saying its existing pipelines could not meet rising demand.
In April and May, Con Edison said it had reached an agreement with two pipeline operators that would provide it with an increased supply of natural gas. But the company said that under the deals, it would not get additional gas capacity until 2023. In April, Con Edison said it had reached an agreement with a pipeline operator that would provide it with a fresh supply of natural gas. But the company said that under the deal, it would not get additional gas capacity until November 2023.
Mr. Cuomo has publicly sparred with other utility companies. Over the summer, he denounced Con Edison after a major blackout in Manhattan, threatening fines and suggesting the utility could be replaced.
In March 2018, after a winter storm knocked out power in the Hudson Valley, he also suggested the licenses of utilities there could be revoked. He also last year attacked Charter Spectrum, the state’s largest cable company, for not building out high-speed internet in rural communities.