Homeowners, Businesses Suffering From National Grid Gas Moratorium

New York City home- and business-owners are experiencing hardship over National Grid’s moratorium on new gas connections, which the company says is necessitated by supply constraints, but which elected officials allege is the company “holding customers hostage” as it seeks approval for a new gas pipeline.

The utility, which provides gas to customers in Brooklyn, Queens, Staten Island and Long Island, announced in May a moratorium on new gas installations, following the state Department of Environmental Conservation’s rejection of its request to build a natural-gas pipeline known as the Northeast Supply Enhancement Project (NESE).

NESE would bring natural gas from Pennsylvania through New Jersey and into New York City. The Department of Environmental Conservation denied the permit for the 17.4 miles of pipeline that would be within New York waters, saying the NESE “would likely have significant water quality impacts” including “from the resuspension of sediments and other contaminants, including mercury and copper,” and “would cause impacts to habitats due to the disturbance of shellfish beds and other benthic resources.”

The moratorium applies to all prospective new customers – residential and commercial – whether new buildings or those seeking to convert from other energy sources such as oil. “New installation” is defined as any structure that has not had a gas connection during the past two years.

National Grid is a public utility with a monopoly on natural gas in the areas it services. Customers denied National Grid gas installations have no choice but to install more costly oil or electric energy.

The company says that without the new pipeline, “To add additional service would pose a risk to the integrity of our system and compromise natural gas use for our existing firm customers.”

“To make up the supply gap, National Grid has been purchasing additional gas supplies through short-term spot market contracts. These supply contracts are not guaranteed year-to-year and are dependent on market availability. NESE, on the other hand, ensures the long-term supply we need to guarantee service to new customers. This short-term measure is not a sustainable operational solution for providing reliable and long-term natural gas service to customers. When we sign customers up, we are committing to providing them with an uninterrupted supply of natural gas. Without NESE, we can’t make that firm commitment to new customers or those looking to expand their current service.”

The company has urged those seeking new gas installations to lobby their elected officials for approval of the pipeline.

Some politicians have harshly criticized the moratorium.

“National Grid is disgustingly holding their customers hostage as a political ploy to get a pipeline approved,” Assemblyman Simcha Eichenstein told Hamodia.

Assemblyman William Colton said, “It is absolutely outrageous that our community has to suffer through this disgraceful demonstration of corporate greed by a company that is entrusted with supplying an essential service.”

Eichenstein, Colton and five other Assemblymembers from Brooklyn sent a letter last month to the chairman of the state Public Service Commission, requesting “an immediate investigation into [National Grid’s] actions.”

The Commission has indeed undertaken an investigation, but Eichenstein is urging them that “we need an immediate solution, not just a report.”

Colton has gone further, asking the Public Service Commission to issue an order to National Grid “to stop it from arbitrarily denying new service orders until there is a public hearing to determine whether there is sufficient gas supply or a deficit that would justify not opening new accounts.”

“I have not heard of any independent projection of gas usage for the next ten years which would justify their action,” said Colton.

Some officials have taken a more measured response.

“While opposition to the pipeline on the basis of environmental concerns should be taken seriously, it is also important to weigh the long-term effects that this could have on New York City’s economy, on affordable housing, and on small businesses,” said City Councilman Chaim Deutsch. “I urge Governor Cuomo to sit down with National Grid and his Department of Environmental Conservation and work together to develop a solution that ensures that New Yorkers do not continue to fall victim to this moratorium. State legislators must make this a priority, before this crisis becomes even more widespread.”

Compounding the anger of customers and elected officials at National Grid, the company has filed a request with the Public Service Commission for a rate increase, amounting to more than five percent for the typical Long Island and Far Rockaway customer, and more than 10 percent for a typical customer elsewhere in New York City.

“National Grid’s rates are already among the highest in New York State and the nation,” said Assemblyman Robert Carroll. “Many of the people I represent are currently struggling to pay their utility bill, and if the Public Service Commission approves the Company’s request, my constituents will have even greater difficulty paying their bills. I urge the Commission to reject the company’s request for a rate increase.”

Assemblyman Eichenstein said, “A company that secretly reduces service access while increasing rates cannot be allowed to continue operating as a monopoly in the borough of Brooklyn.”

As political battles rage over pipelines, residents and businesses are suffering.

Sheepshead Bay resident Issac Lati has spent three years renovating a property, but has now been refused a gas connection. “I don’t know what to do – it’s affecting me in every way,” said Lati. “I’ve been a National Grid customer all my life and we never knew anything about this deadline. What am I supposed to do with the house now? Everything will crack over the winter without heat, and the money I’ve spent will be wasted.”

Sruli Eidelman, owner of the popular Crown Heights restaurant Izzy’s Brooklyn Smokehouse, opened another restaurant, Izzy’s Taqueria, in February. Having rented an existing storefront with electric energy, Izzy’s Taqueria tried converting to less-costly gas in May, but National Grid denied them.

Eidelman is in the process of opening a third restaurant, Izzy’s Fried Chicken, but has been stymied by the gas moratorium. The location, 262 Kingston Ave., was previously a clothing store with no gas lines. Due to the gas moratorium, Eidelman had to add electric capacity; he will use electricity for power and oil for heating. The cost of installing electric power and equipment is in excess of $50,000, said Eidelman, in addition to the higher monthly costs of using oil and electric power.

“We’d have been ready at the end of May, but for the moratorium,” said Eidelman. “I am paying rent and paying employees, and it’s just insane. I took out loans, and borrowed from family and friends, with the expectation that we’d be up and running. But we’re not running, and the costs are skyrocketing.”

Eidelman knows that when the moratorium is lifted, he’ll have to re-outfit the restaurant for gas, which will mean further expenditures, but in the meantime he is continuing his electric installations, and hoping to open Izzy’s Fried Chicken by mid-September.

“We’re going ahead,” he says. “I can’t be held hostage.”

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rborchardt@hamodia.com