Checkmate? Cuomo issues ultimatum to National Grid

“These utilities believe they have a license granted by God. They don't.”

November 12, 2019 Mary Frost

National Grid headquarters in Downtown Brooklyn. Eagle photo by Mary Frost

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Gov. Andrew Cuomo gave National Grid 14 days notice on Tuesday that New York State intends to revoke the company’s certificate to operate its downstate gas franchise.

National Grid has been refusing to supply gas hook-ups to new customers in Brooklyn, Staten Island, parts of Queens and Long Island since May 15, after the state denied its application to build a controversial $1 billion gas pipeline. The company says it needs the pipeline, officially called the Williams Northeast Supply Enhancement Project, due to increased demand in the downstate service area. The company has 1.85 million customers in New York City and Long Island.

The company’s refusal to turn on the gas has stunned customers and driven some new businesses in Brooklyn towards bankruptcy. Bensonhurt restaurateurs Charles Linksman and Peter Lee said in September they stood to lose their entire investment in a new Vietnamese restaurant, Pho 86, because they were unable to get the gas turned on.

In his letter to National Grid CEO John Pettigrew and President John Bruckner, Cuomo said National Grid has mishandled the gas supply system downstate, failed to provide the required “adequate and reliable” service and failed to plan for future supply needs.

“National Grid has made clear that its only plan for future supply was based on a single, speculative project: construction of a private pipeline through New Jersey and New York,” Cuomo said. “The plan to build such a pipeline was risky at best. The pipeline required multiple regulatory approvals in both states, faced multiple potential legal challenges and construction hurdles.”

He blamed National Grid, which enjoys a legal monopoly in New York State, for not coming up with a contingency plan, such as short-term options to contract for gas from other sources.

Cuomo told NY1 host Kristen Shaughnessy on Tuesday, “These utilities believe they have a license granted by God. They don’t. They have a license granted by the people of the State of New York. And the people of the State of New York can revoke that license. And that’s where we are.”

National Grid spokesperson Karen Young said on Tuesday, “National Grid is in receipt of the letter from Governor Cuomo and will review and respond accordingly within the timeframe outlined in the letter. We continue to work with all parties on these critical natural gas supply issues on behalf of all our customers in downstate New York.”

Interns working at National Grid’s Brooklyn headquarters told the Brooklyn Eagle on Tuesday that the company had not yet officially informed employees about the governor’s statement, and did not know how it would affect customers.

The state ordered National Grid in October to turn the gas back on for more than 1,100 former customers who were also caught in the moratorium limbo. National Grid has said they are doing so.

The 37-mile natural gas pipeline project, which would cut across 23 miles of lower New York Bay, was rejected by New York’s Department of Environmental Conservation in May due to concerns that it could contaminate New York Harbor. The pipeline would increase National Grid’s gas capacity by 14 percent.

Comptroller calls for public takeover

NYC Comptroller Scott Stringer applauded Cuomo’s action on Tuesday and suggested that the city and state explore the feasibility of a public takeover of the natural gas system.

“It is time to recognize that National Grid and Con Edison’s business models are premised on digging us deeper into the climate crisis. We can’t leave our climate future in the hands of utilities who only want to line their pockets by preserving the status quo,” he said.

New York City Public Advocate Jumaane Williams in September called the company’s denial of service a political ploy to have the Williams Pipeline built. “This is a privately owned company holding everybody hostage,” he said.

Last month, a Public Service Commission investigation reached a preliminary conclusion that National Grid failed to follow Public Service Law.

Stop The Williams Pipeline Coalition said in a statement on Tuesday, “National Grid’s attempts to expand fracked gas and lobby for the Williams NESE Pipeline was never in the public’s interest, and has always gone against climate science and the health and safety of our communities.”

In April, National Grid filed for a rate hike.

The Public Service Commission’s monthly meeting takes place Thursday.