Environmentalists stage a protest to coincide with a fundraising event by U.S. President Barack Obama on May 13, 2013 in New York City. | John Moore/Getty Images
New York’s utility regulator should require natural gas companies serving customers in the state to make detailed long-term plans to meet demand for the fuel — and include an option that would avoid the construction of any new infrastructure.
The repeatedly delayed proposal by Department of Public Service staff was released on Friday. It calls for all gas utilities to offer long-term plans subject to public input and scrutiny by policymakers.
Why it matters: A more robust planning process for gas utilities will be essential if the state is serious about reducing emissions. More buildings are hooking up to the gas system now as new homes and offices go up or existing ones switch off more expensive fuels, like oil.
As demand grows, utilities are often proceeding with business-as-usual solutions: new pipelines, trucking in more gas or additional compressor stations. While that’s begun to shift, the DPS proposal suggests a wholesale rewiring of utility planning and offers the public and regulators a window into long-term challenges and solutions.
Environmental advocates say a new infrastructure buildout can’t continue and have called for phasing out heating and power generation fueled by gas. Gov. Andrew Cuomo’s administration has also dealt with moratoriums on new gas hookups due to limited supply and other constraints by utilities.
The details: The staff proposal, which was initially due in August, according to a March 2020 PSC order, proposes utilities file long-range plans every three years.
These plans would provide demand and supply forecasts, proposals to meet any gaps and include a “no infrastructure” option relying entirely on energy efficiency, heat pumps and demand response to avoid large construction projects.
The no infrastructure option would also have contingencies in case utilities do not meet their demand reduction goals. They could rely on trucked-in gas or other peaking services, if needed.
An independent consultant should be retained to evaluate utility proposals, according to the DPS staff. The proposal then suggests an extensive opportunity for public scrutiny and engagement, followed by PSC action to approve, modify or reject the plan.
Utilities would be able to recover costs of alternatives to traditional pipeline or other infrastructure buildouts. Staff suggest they offer a joint proposal on the recovery mechanism and potential incentives.
The staff says plans should be filed in a staggered manner by utilities over the next three years, with Con Edison, National Grid downstate and St. Lawrence Gas in year one; NYSEG and RG&E, Corning and Orange & Rockland in year two; followed by National Grid upstate, Central Hudson and National Fuel Gas in year three. Annual reports would also be required from each utility.
The proposed long-term planning is reminiscent of the requirements placed on National Grid for its downstate service area after the backlash over the utility’s abrupt moratorium on new hookups in 2019.
In that case, National Grid lifted its moratorium on Long Island and in New York City after intensive negotiations with the Cuomo administration. It was required to propose alternatives to a pipeline blocked by the Department of Environmental Conservation and is pursuing the buildout of some gas infrastructure to continue to meet forecasted demand growth in that region.
Moratoriums: A 15-page staff proposal also lays out requirements for utilities before they can block new customer gas hookups. The plan comes after outrage from local officials and state lawmakers over a moratorium imposed in Westchester County by Con Edison and the Grid debacle.
Despite utilities repeatedly warning regulators in filings that moratoriums were possible and some public statements from Grid executives, officials and members of the public were blindsided by those announcements.
The proposal, if approved by the PSC, would require gas utilities to file within 90 days their plans for when a moratorium could be imposed and how it would communicate and implement a moratorium.
Utilities should also explain how they would prioritize customer classes for gas service and the metrics for lifting a moratorium, the proposal states.
Con Edison’s moratorium remains in place in parts of Westchester County.
What’s next: A blockbuster forum will be held to gather input and discuss the proposal in more depth on March 25. Initial comments are requested by May 3 and reply comments by June 4.
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