Consumers Will Be Hit Hardest In New York Utility Clash

By Irina Slav

Utility Clash

New York Governor Andrew Cuomo has threatened National Grid to revoke its license in two weeks if the company fails to convince the state authorities it was right to stop connecting new users to its grid citing capacity constraints.

The move is the latest escalation in an ongoing dispute between Cuomo and the company. It began earlier this year when, following Cuomo’s rejection of a new natural gas pipeline that would have added 400 million cubic feet daily to the state’s energy supply.

The New York Department of Environmental Conservation said in its reasons for the rejection of the Williams project that “Construction of the proposed project would result in significant water quality impacts from the re-suspension of sediments and other contaminants, including mercury and copper.”

Meanwhile, demand for energy has been on the rise and so have electricity bills, and not just in New York. In January, FreightWaves.com reported that residents of the Northeastern states are being increasingly burdened by high electricity bills coupled with unreliable supplies, the root cause of which is the lack of enough natural gas pipeline capacity to bring in the fuel needed for power plants.

It was this insufficient supply infrastructure and the resulting supply caps that, according to National Grid, motivated its moratorium on new customers, which the company announced in May.

Cuomo, however, has lashed out at National Grid for its perceived failure to provide “adequate and reliable service”. Further, the Governor said, the state motive for the moratorium, namely Cuomo’s rejection of the pipeline, was evidence of National Grid’s failure to ensure New York’s future gas supply.

“There are only two theories to explain National Grid’s actions. Either National Grid was grossly negligent in relying exclusively on the speculative construction of a private pipeline to meet the demands that it was statutorily required to provide; or, National Grid deliberately defrauded the people of the state by not developing or pursuing existing supply options to force approval and reliance on a private pipeline to further their business interests at the cost of the consumer,” Cuomo said in a statement.

It seems the two sides in the argument are speaking different languages, which does not bode well for the outcome, which in any case will hit consumers the hardest.

By Irina Slav for Oilprice.com

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