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EIA: Con Edison had 1,600 applications for gas service prior to moratorium

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EIA: Con Edison had 1,600 applications for gas service prior to moratorium

Many New York residents applied for natural gas utility service in the months before a subsidiary of the largest utility provider in the state, Consolidated Edison Inc., placed a moratorium on oil-to-gas conversions in one service territory because of the state's restrictions on new interstate pipelines.

The U.S. Energy Information Administration highlighted the demand for gas service as it looked at "pipeline constraints into [the] New York City area" in a May 22 "Today in Energy" article. The EIA said between the time Consolidated Edison Co. of New York Inc. announced the moratorium in January and the effective date of the moratorium on March 16, Con Edison received about 1,600 applications for firm gas service in the affected area, which included most of Westchester County, N.Y., outside of New York City.

"Demand for natural gas in the New York City area has increased in recent years, leading to concerns about reliability of service," the EIA said. The federal agency said the demand has outstripped the strong growth in gas production in the Northeast.

Utilities have expressed concerns over gas reliability after the state of New York denied permits for several pipeline projects over the lasts few years as part of its shift away from fossil fuels.

"Time and time again we are seeing politics overrule pragmatism," American Gas Association President and CEO Karen Harbert said in a May 16 statement after a state agency turned down a permit application for Williams Cos. Inc.'s 400-MMcf/d Northeast Supply Enhancement project. "Lack of natural gas infrastructure in the Northeast means people are expected to rely on other sources of energy, driving costs and emissions up and denying New York families and businesses, and others across the region, access to the benefits American natural gas can provide."

Pipeline opponents said the gas utilities and pipelines have exaggerated the impacts of turning away new gas transportation infrastructure.

"ConEd and [National Grid USA] are proposing a moratorium on natural gas hookups as a way of trying to blackmail the people of New York to approve a pipeline that they do not need," said Jeff Tittel, director of the New Jersey Sierra Club, in a May 22 statement.

"There is plenty of natural gas available in New York for both franchise areas," Tittel said. "This is all about using the public as hostages to force government agencies to grant them projects that they should be turning down. The utilities are acting like spoiled brats because they are used to getting everything they want. With all of the opposition and the facts on our side, they are concerned state agencies are turning them down, like New York did with the Northeast Supply Enhancement."

SNL Image

Major interstate gas pipelines converge at New York City.
Source: U.S. Energy Information Administration

In January, ConEd announced a planned moratorium on new oil-to-gas conversions for customers in a subsection of the utility's territory. The company said limitations on pipeline capacity into its Westchester service territory north of New York City have constrained gas supply.

National Grid followed suit by notifying larger customers that it will not be able to provide some new gas services if the Northeast Supply Enhancement project is not built. New York regulators denied the permit application filed by Williams' subsidiary Transcontinental Gas Pipe Line Co. LLC for the project on May 16. As a result, National Grid announced it would not provide gas distribution service to new customers in Long Island and New York City service areas until the state reconsiders its decision.

ConEd has been looking for ways to alleviate the pipeline constraints around New York City, including encouraging the use of electricity for heating and cooking, providing energy efficiency rebates, and creating demand response programs, as noted by the EIA.

The utility has made agreements with pipeline companies to add incremental gas transportation capacity by upgrading compressor stations rather than building new pipelines. ConEd and Tennessee Gas Pipeline Co. reached an agreement in April for a pipeline expansion that might let ConEd lift its restrictions on gas service. Under the agreement, Tennessee Gas, which delivers gas to ConEd facilities in Westchester County, N.Y., would upgrade compressor facilities outside of New York state to yield an incremental capacity increase of up to 110,000 Dth/d. ConEd expected the incremental capacity could be placed in service by November 2023.

ConEd also made a deal with Iroquois Gas Transmission System LP "to develop and permit a rational solution that would provide needed incremental natural gas capacity to the Bronx and parts of Manhattan and Queens, N.Y.," according to a May 9 press release. Iroquois Gas would upgrade compression facilities on its system. As with the Tennessee Gas project, ConEd expected the additional capacity to be in service by November 2023.