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Cuomo continues to criticize National Grid over moratorium

Gov. Andrew M. Cuomo on Tuesday continued his criticism of National Grid and its handling of a purported natural gas shortage in the region, even raising the prospect of revoking the company’s franchise to operate in the state.

A National Grid official expressed “disappointment” at Cuomo’s comments, asserting the company warned the state of supply constraints and the need for a new pipeline years ago.

Cuomo has ordered a Public Service Commission (PSC) probe of the London-based company, which operates the natural gas distribution system in the downstate region, including for about 600,000 Long Island customers. Last week, after finding the company improperly failed to connect around 1,000 customers through a moratorium in effect since May, Cuomo accused the company of acting “in bad faith.”

National Grid on Monday said it had enacted an emergency plan to make sure most of those customers get gas service by mid-November, and took the unprecedented step of asking some commercial customers to curtail their gas service to help fill the need.

Cuomo appeared unimpressed. “They can be penalized — they can be fined. And by the way, they can have their franchise revoked,”  he told radio host Jay Oliver Tuesday morning. “Now, they think it would be so disruptive that the Public Service Commission would never do it because you'd have to get a new utility company, but I don't care — I don't care how disruptive it is.”

Cuomo cited National Grid’s loss of the contract to operate the Long Island Power Authority Grid as an example. PSEG Long Island took over that contract in 2014 after a competitive bidding process.

“If they [National Grid] believe they have an irrevocable license, that they have a franchise that cannot be removed, then the consumers are at their whim. So no, worst case scenario, their franchise could be revoked,” Cuomo said. “And by the way, we went through it with LIPA and all sorts of configurations on Long Island, so it can be done.”

In an interview Tuesday, John Bruckner, president of National Grid New York, responded to Cuomo’s comments.

“I’m clearly disappointed about it,” he said, noting that the state has had long notice of the need for the new pipeline to supply the region through National Grid applications and filings. “We’ve been closely working with the PSC on this issue for a very long time.”  

The problems could get worse, Brucker said, noting that one of the company’s “major” suppliers to the region recently informed it of a gas pressure problem that will have an impact on future supply. He declined to name the supplier or the specific volume impact, but said National Grid is sharing the information with the PSC and working to determine the impact through modeling.

In his radio interview Tuesday morning, Cuomo took issue with companies that have effective monopolies in their regions, and vowed to keep up the attacks.

“Look, these utility companies, they literally have consumers in a vulnerable position because they can turn your heat on, they can turn it off,” he said. Citing National Grid’s campaign for a new gas pipeline for the region that the state has twice rejected, Cuomo raised questions about the company’s motives and tactics.

“National Grid wants the pipeline because they’re in the gas business and they say, ‘We have to have the pipeline and if we don’t have the pipeline then we’re running out of gas and we’re going to turn off the gas,’” he said. “… And now you have this whole explosion of people, pardon the pun, saying I can’t get gas. Maybe it’s a coincidence, but I’m a little skeptical.”

National Grid has said it needs the $1 billion 24-mile pipeline from New Jersey to address a real shortage of natural gas in the region. It has declared a moratorium on new gas hookups for residential customers since May, but other business accounts had been warned of the limitations months before. Cuomo expressed doubts about the veracity of its claims.

Bruckner noted National Grid has provided all its forecasts and modeling information to the company that is conducting an independent review of its supply constraints. He said he believes the final report will vindicate the company. The PSC has yet to release the report.

“We believe we’ve been fully transparent,” he said, and “we believe that report when issued will demonstrate the validity of the moratorium. We await the results of that study.”  

He noted the PSC “did not refute any of the information we provided.”

Cuomo on Tuesday said that even with approval of the pipeline today, the new supply of gas from it would still be 12 months to 18 months away.

“Where was National Grid’s plan to provide gas for the next year or 18 months?” Cuomo asked. “How did they not prepare for this situation? And that was their fiduciary responsibility … How could you be turning off all these people when you were never going to get the gas in time anyway, even if the pipeline was built?”

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