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Gas utilities, environmentalists bring big sticks to NY pipeline brawl

The political battle over natural gas pipelines in New York has intensified. Gas utilities are saying they will have to reduce services over a lack of new pipeline capacity, environmental advocates released a report saying pipelines are not needed, and the state is pursuing a gas-free vision.

The escalation comes as few pipeline projects still stand in the state. Gov. Andrew Cuomo has tried to move New York toward renewable energy and away from fossil fuels, including a plan to transition the state to 100% carbon-free power grid and economy by 2040. The New York State Department of Environmental Conservation has denied or withheld Clean Water Act permits for gas pipeline projects such as the Williams Cos. Inc.-led Constitution pipeline, which had already obtained federal approval. The industry has fought back with lawsuits and complaints to the Trump administration and its allies in the U.S. Congress.

The New York State Department of Environmental Conservation is expected to rule within weeks on key permits for William's Northeast Supply Enhancement natural gas transportation project for the New York City area. The project has attracted opposition from environmental groups and elected officials. In January, Federal Energy Regulatory Commission staff said the pipeline project would not have significant environmental impacts.

Environmental group 350.org released a report March 19 that concluded the Northeast Supply Enhancement project is unnecessary. Among other arguments, the group said gas demand in the area is flat because of energy efficiency efforts and increased use of renewable energy.

"The public deserves better scrutiny of this pipeline project," Suzanne Mattei said in an email accompanying the report's release. Mattei is an attorney, a consultant with Lookout Hill Public Policy Associates and a former regional director of the New York State Department of Environmental Conservation, according to the statement.

"The arguments from Williams and the utility don't make sense, and the numbers don't add up," Mattei said. "New York's energy future depends on our government making the right decision."

Height Securities LLC energy and utilities analyst Katie Bays said consumers throughout New York and New England are paying higher prices for gas and other fuels as a result of "Andrew Cuomo's dogmatism towards natural gas infrastructure."

"The New York governor decided a long time ago that climate change is a sacred cow, and he's willing to sacrifice common sense and a lot of other people's money to show his green credentials," Bays said in a March 20 interview.

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In the last couple of months, large gas utilities have linked the Cuomo vision to effects on their business and their customers. In January, Consolidated Edison Co. of New York Inc. announced a planned moratorium on new oil-to-gas conversions for customers in a subsection of the utility's base, which will prevent some customers from replacing fuel oil for heating. The company said limitations on pipeline capacity into its Westchester service territory north of New York City have constrained the gas supply.

National Grid USA notified larger customers that it will not be able to provide some new gas services if Williams' 400-MMcf/d Northeast Supply Enhancement project is not built. National Grid said midsize commercial projects, small businesses and residents could be impacted if the state helps stop the project. National Grid would be a major customer of the expanded pipeline capacity provided by Williams' project.

National Grid and Williams representatives stood by the market forecasts behind the pipeline project. "It is a fact that the current pipeline infrastructure is operating at capacity, and the utility company responsible for providing reliable natural gas service to 1.8 million consumers across New York City and Long Island has determined that capacity needs to be enhanced in order to keep pace with future demand and avoid gas supply constraints," Williams spokesperson Christopher Stockton said in a March 20 statement.

New Yorkers for Affordable Energy, a group interested in expanding gas supply, expressed concerns over gas scarcity and high gas prices brought on by limited pipeline infrastructure.

New York oversees the utilities as well as pipeline projects. On March 15, the New York Public Service Commission gave ConEd 45 days to respond to allegations that it failed to inspect work done by contractors and allowed workers without the proper qualifications to perform the work. The commission's inquiry uncovered 644 alleged violations. The commission is investigating a National Grid utility over similar alleged violations.

Williams pipeline company Transcontinental Gas Pipe Line Co. LLC applied to FERC for the Northeast Supply Enhancement project in March 2017. The project, estimated at the time to cost almost $927 million, had a target in-service date of Dec. 1. It would consist of 10 miles of 42-inch-diameter pipeline loop in Lancaster County, Pa.; 3.4 miles of 26-inch loop in Middlesex County, N.J.; 23.5 miles of mostly offshore 26-inch loop in New Jersey and New York; a new compressor station in Somerset County, N.J.; and modifications to an existing compressor station in Chester County, Pa.