National Grid Issues Report Providing Solutions for Gas Supply Constraints in New York

National Grid released a report on May 8 supplementing its long-term capacity analysis issued earlier this year on natural gas capacity constraints in Downstate New York and available options for meeting long-term demand. The supplemental report incorporates feedback received from six public meetings, as well as the changing conditions caused by the COVID-19 pandemic.

The analysis is required under a November 2019 settlement under which National Grid agreed to lift the moratorium on gas service in Long Island, Queens, and Brooklyn. The settlement requires an analysis of long-term options, including renewable energy sources, a new pipeline, liquefied natural gas, compressed natural gas facilities, and conservation strategies. The company imposed the moratorium in May 2019 following the Department of Environmental Conservation’s decision to deny a water permit for Williams Co.’s Northeast Supply Enhancement project, which would provide service to the utility.

The new report updates Downstate New York’s natural gas demand forecast, demand-supply gap, an update to solution options, expanded analyses of cost, environmental and risk considerations for the options, and recommended solution choices for consideration. National Grid said that the report provides two recommendations namely, a non-pipeline solution and an infrastructure solution. The report provides an assessment of cost, deliverability and reliability risks, and considers a broad range of criteria, including customer feedback.

In November 2019, National Grid reached a settlement to lift the moratorium on gas service, following Democratic Governor Andrew Cuomo’s notification threatening to revoke the company’s operating license over its inability to provide reliable supply. The utility committed to short-term supply mechanisms to meet demand for about two years, providing gas to customers who were denied service and granting pending applications. The company also agreed to pay $36 million to compensate affected customers and support energy conservation and clean energy initiatives.

Under the settlement, National Grid agreed to present an analysis of long-term options within three months, subject to a public review process. The Public Service Commission staff will work with the utility, communities, and elected officials to determine the best long-term option by June 2020 and ensure it is functioning in Fall 2021. As part of the deal, the state will appoint a monitor paid for by National Grid to oversee its operations and report to the state and the commission.

The company imposed the moratorium in May 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 the utility.