National Grid says no new NYC gas customers until state approves pipeline

Dive Brief:

• National Grid announced on Friday a moratorium on processing new natural gas service applicants in its New York City and Long Island service territory until the Northeast Supply Enhancement (NESE) gas pipeline receives its necessary permits.
• New York’s Department of Environmental Conservation (DEC) denied a permit for the $1 billion project on May 15, ruling that it could harm aquatic life. National Grid said the added capacity was necessary to serve additional residential, commercial and industrial customers in Brooklyn, Queens and Long Island.
• Transcontinental Gas Pipe Line Company, the project developer and a subsidiary of Williams Companies, resubmitted the water quality certification permit application on Thursday, May 17. National Grid expects the NESE project will be in service by the winter of 2020-2021.

Dive Insight:

New York has been undergoing several decarbonization efforts in the transportation, heating and power sectors. However, while utilities have been encouraged to focus on non-pipeline infrastructure solutions, slowing down the conversion of customers to natural gas heating means fewer customers transitioning from dirtier heating fuels, such as oil.

That slowdown has been driven, in part, by the difficulties in building new gas infrastructure.

“There appears to be a pattern of New York… denying state permits for sorely needed energy infrastructure projects which have already received all required federal permits,” Karen Harbert, president and CEO of the American Gas Association, told Utility Dive via email. “If pipelines are not built in the Northeast, then customers cannot switch to natural gas from heating oil which impacts air quality and greenhouse gas emissions.”

Consolidated Edison also announced a gas moratorium earlier this year north of New York City, which went into effect in March. Con Edison shares gas infrastructure with National Grid to serve the New York City Area.

Its moratorium continues to be in effect with no plans to lift it. The utility is separately pursuing longer term capacity additions by November 2023, from the Tennessee Gas Pipeline to its Westchester service area and from the Iroquois Gas Transmission System to its NYC territory.

Con Edison said in April the capacity from the Tennessee Gas Pipeline would be enough to lift the Westchester moratorium. The utility will continue processing the applications for new natural gas customers it received before the moratorium for the next two years, according to Allan Drury, Con Edison spokesperson.

Con Edison and National Grid have both faced a lot of opposition from clean energy and environmental advocates when it comes to increasing natural gas capacity. Groups that called for the DEC to reject the NESE pipeline in comments on the permit application asked for non-pipeline solutions to address fuel constraints.

“Utilities like National Grid should be required to proactively plan clean heating and cooling investments and other non-pipe solutions so as to avoid the need for new gas supply infrastructure,” Kimberly Ong, senior attorney for the Natural Resources Defense Council, told Utility Dive via email. “And New York should build on the recent promising Westchester response by the Cuomo administration — to scale-up energy efficiency and heat pumps, allowing us to avoid locking in future fossil fuel dependence.”

Con Edison proposed a $223 million gas efficiency program, which regulators approved shortly after the utility announced the Westchester moratorium. The utility is implementing the program for customers who are interested in alternatives to gas heating, to weatherize homes and update HVAC controls or to apply incentives to electrify heating systems and install geothermal heat pumps.

The DEC has denied several water quality certificates of proposed natural gas pipelines after determining that the projects were non-compliant with water quality standards. The denials have prompted litigation, some of which is still underway.

The state’s environmental agency has rejected permits for projects that were approved by FERC, alleging that federal regulators failed to take into consideration the environmental and health impacts of the pipeline.

The DEC is currently reviewing the new revised application received from Williams to determine its completeness, according to the state agency. The DEC had first denied the permit for the NESE project on June 30, 2017.

NESE is an expansion to the existing Transcontinental pipeline, which stretches from South Texas to New York City to provide natural gas to states in the Southeast and along the Atlantic Seaboard. The project will also require environmental permits from New Jersey to proceed and National Grid expects having more information on the project’s permitting process by the end of June, according to the utility.

“We remain cautiously optimistic that the project will proceed on schedule and be in service for Brooklyn, Queens and Long Island customers by the winter of 20/21,” the company said in a statement.