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NY governor moves closer to stripping National Grid of license with new demand

Gov. Andrew Cuomo demanded regulators furnish information that could pave the way for New York to strip National Grid USA of its operating license amid an ongoing dispute over the utility's downstate natural gas service moratorium.

Cuomo took the New York Public Service Commission to task for a potential gas shortage, accusing commissioners of failing to assure National Grid developed supply alternatives to a controversial pipeline project. In an Oct. 24 letter that raised fresh concerns for National Grid, he ordered the PSC to account for its performance overseeing the utility.

"I also want to know when and how we eliminate an abusive utility from the state to protect consumers," Cuomo wrote. "To that end, I want the specific explanation of potential grounds for revocation of National Grid's license and its liability for the damage that has already been incurred and future damages which will be incurred over the following 12 to 18 months."

"I would also like the specifics necessary to appoint a monitor to oversee National Grid's operation on an intense and constant basis to guarantee consumer protection," the governor said in a letter to PSC Chairman John Rhodes.

The letter moves the state incrementally closer to a historic standoff that Cuomo set up in August when he first raised the possibility of replacing National Grid. At the time, Cuomo ordered the PSC to investigate reports that National Grid had refused to reconnect customers who suspended service prior to its decision in May to halt new gas hookups in New York City and Long Island.

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The PSC verified the claims and ordered National Grid to immediately reconnect 1,157 customers and submit plans to accommodate thousands more applicants. National Grid subsequently outlined plans to moderate demand among existing customers and secure marginal gas supplies, but the utility warned that these were only stopgap measures. It said it must keep the moratorium in place for the sake of providing reliable, safe supply until the state approves the long-stalled Northeast Supply Enhancement pipeline project.

That assertion sparked the latest series of threats from Cuomo.

"This is an admission that National Grid knew that it had a serious supply issue and could not meet its region's energy needs," Cuomo said. "Indeed, this was not a startling insight: the looming shortage has been discussed for years with many options for additional gas supply put forward over the years. There is no doubt that the preferred option for National Grid's self-interest is a pipeline, effectively guaranteeing its future business model."

Cuomo demanded to know why National Grid and the PSC did not protect customers by exploring alternatives to the pipeline, which his administration has refused to permit. He accused National Grid of allowing a crisis to develop and extorting the state to approve the Williams Cos. Inc. project.

The governor further asserted that it was reckless to rely on the pipeline as the exclusive option for gas supply, given the risk of delays caused by construction, weather, litigation or failure to obtain permits from other states.

Cuomo directed the PSC to "expeditiously demonstrate that you have fully analyzed the existing supply needs and alternatives to natural gas pipelines." That includes the availability of propane, liquefied natural gas and renewable energy, as well as the impacts of securing those alternatives on the economy, environment and ratepayers.

"The PSC Chair shares Governor Cuomo's concerns about the seriousness of this issue. We are collecting the requested data and will be responding quickly," said James Denn, spokesperson with the New York Department of Public Service.

National Grid spokesperson Domenick Graziani said the company is committed to "working with all parties to address these critical supply constraint and customer connection issues" and continues to reconnect customers as ordered by the PSC.