National Grid agrees to end gas moratorium after governor’s ultimatum
Facing the loss of their certificate to offer natural gas service in downstate New York, National Grid said on Monday that it has reached an agreement with the state to immediately resume connecting gas customers in Brooklyn, Queens and on Long Island.
On Nov. 12, Gov. Andrew Cuomo gave National Grid 14 days notice that the state intended to revoke the company’s certificate to operate its downstate gas franchise if the company did not resume connecting new customers.
National Grid had been refusing to supply new gas hook-ups in these areas since May 15, after the state denied its application to build a controversial $1 billion gas pipeline.
The utility company said in a statement that it will start connecting customer applications previously put on hold and start processing all new applications. In addition, National Grid will offer $7 million in customer assistance to address hardships as a result of the moratorium. Gas service will continue for roughly the next two years.
“This agreement is a victory for customers,” Cuomo said in a release. “National Grid will pay a significant penalty for its failure to address the supply issue, its abuse of its customers, and the adverse economic impact they have caused. The company is also working to address the long-term supply problem and will present options in the coming months to the people of Brooklyn, Queens, and Long Island, letting them choose the best way forward for their communities.”
National Grid said it has agreed to $8 million for new energy efficiency, gas conservation measures designed to relieve stress on the system and reduce peak-time gas usage during this two-year period. The company will also invest $20 million in clean energy projects and businesses in New York.
National Grid said that it will present at public meetings options to meet New York’s long-term supply needs in Brooklyn, Queens, Nassau and Suffolk counties within three months.
“Every decision we make is driven by National Grid’s commitment to provide safe and reliable service to our customers, including the decision to implement the moratorium. 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 a statement.
In Brooklyn, the company’s unexpected refusal to turn on the gas had stunned customers who, in some cases, had put their life savings on the line to start businesses. Bensonhurst 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.
Councilmember Robert E. Cornegy, Jr. said in a statement Monday, “This is a huge win for Brooklyn and the small businesses in my district that were not able to open because they could not get a natural gas hookup, and could not afford the tremendous capital costs associated with going electric.”
National Grid has said 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.
Cuomo, however, blamed the company, 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.
An independent monitor will be appointed by the Department of Public Service to oversee National Grid’s compliance with this agreement.
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