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NY regulators blast National Grid over gas service denials

National Grid USA faced withering criticism from New York regulators during a contentious state Public Service Commission meeting, the latest flare up in an ongoing dispute over the utility's natural gas moratorium in New York City and Long Island.

Four of five commissioners voted during an Oct. 17 meeting to adopt an order that paves the way for fines against National Grid over its denial of service to more than 1,000 customers. The order, issued Oct. 11, also requires National Grid to submit reports on how it plans to provide reliable service and accommodate disconnected customers.

The order stems from an investigation into National Grid's alleged refusal to reconnect customers who suspended service before the company put in place the moratorium in May. National Grid has said it will not process any new applications for downstate gas hookups unless New York approves a gas pipeline project to address supply constraints.

The alleged denials of service drew the ire of Gov. Andrew Cuomo, prompting a threat to strip National Grid of its franchise to provide service in New York — a precipitous escalation in the feud.

Commissioners take aim at service denials

Commissioner Tracey Edwards said the service denials caused her to lose trust in National Grid during the Oct. 17 meeting. She accused the company of carrying out an "intentional," "chaotic" and "confusing" strategy that put customers in the middle of the dispute in order to pressure the state to approve the pipeline project.

"We will get to ... how big our capacity issues are. We will get there," said Edwards, a former Verizon Communications executive. "But doing this and flipping a switch to say, 'No, no' ... My grandchildren used to hold their breath, and that didn't work either."

Commissioner John Howard said he previously had sympathy for National Grid's position in light of the capacity shortages it faces, but the company's behavior and public relations strategy has changed his opinion.

"Rather than comprehensively reaching out to regulators and customers, both current and prospective, to engage in meaningful short-term solutions to mitigate impacts, the company poured large amounts of resources into a lobbying effort to influence a regulatory proceeding," Howard said. "This behavior greatly fueled public distrust, leaving customers and the broader community not believing Grid's statements on its supply resources."

National Grid announced Oct. 14 that it would reconnect 1,157 customers, as the commission ordered. It said it was securing gas on the spot market and contracting with compressed gas providers to address supply constraints in the short term.

National Grid defends its record, requests cooperation

The company responded to the Public Service Commission's order in an Oct. 15 filing. The company said it "strongly disputes" the commission's allegations in the order. Much of the five-page document addressed gas supply constraints in New York, the need to approve the Northeast Supply Enhancement pipeline and National Grid's reasons for implementing the gas moratorium.

National Grid asked the commissioners to acknowledge that the moratorium is necessary and requested they do not issue any more orders to reconnect customers. It also asked the commission to release a report on gas supply constraints completed in June and work with the company to develop "aggressive demand response and energy efficiency programs" and "marshal the resources of other state agencies to execute these plans."

Commissioner Diane Burman lodged the sole vote against adopting the order. She expressed concern that the New York Department of Public Service staff's investigation into the gas moratorium is still ongoing, and stressed the commission was not yet concluding that National Grid is guilty of allegations in the order.

"It seems like we're condemning the company and yet we're telling them, 'Don't worry, you have an opportunity to respond,'" said Burman, a former counselor for the New York State Senate Republican Conference.