National Grid Faces Threat of License Cancellation in New York Over Gas Supply Issues

Democratic Governor Andrew Cuomo notified National Grid plc of the state’s intent to revoke the company’s license to operate its gas franchise, following its inability to provide reliable natural gas supply, according to a Nov. 12 press release. The company’s failure to plan for supply needs is evident from its own explanation that it denied service to thousands of customers because of a lack of supply, the letter noted. The utility has 14 days to respond with meaningful and remedial actions to address its gas connection moratorium. 

The move is the latest in the wrangle between the state and the utility over the approval of a gas pipeline. In May, the company announced that it stopped processing applications for new or expanded gas service in Brooklyn, Queens and on Long Island following the New York State Department of Environmental Conservation’s decision to deny a water permit for Williams Co.’s Northeast Supply Enhancement project, which would provide service to National Grid. 

The company “was grossly negligent in relying exclusively on the speculative construction of a private pipeline” to meet the demands or “deliberately defrauded” customers to force approval of a pipeline to further its business interests at the cost of the consumer, according to the notice. 

Cuomo said that the “moratorium is either a fabricated device or a lack of competence,” pointing to existing short-term options to contract for non-piped gas from other sources. National grid should have explored whether gas could be trucked, shipped, or barged; or proposed other infrastructure or additional unloading facilities. Electric service, demand response, heat pumps, and renewable resources should have been considered before denying gas service. National Grid’s “oil to gas conversions” increased gas demand, disregarding the need for a future plan to meet the demand it was creating, the notice said.