In January, New York energy utility company Consolidated Edison Inc (Con Edison) told New York State regulators, New York Public Service Commission that it would impose a temporary moratorium on new natural gas service in parts of Westchester County due to limited capacity on existing pipelines. It now plans to stop accepting new applications for service on March 15 2019. ConEd says that this will be until gas demand is aligned with gas supply.
There is debate on the planned moratorium: whether it is the result of the state’s continued blockade on gas pipeline construction (the view of a spokesperson from New Yorkers for Affordable Energy) or whether it is the result of a significant spike in demand for gas (the view of State regulators).
The negative impact of the moratorium
It is significant news due to the impact the moratorium will have on its population. Westchester County borders New York City to the south, Fairfield County, Connecticut, to the east, Long Island Sound and the Hudson River. Roadways, bridges and mass transportation have seen much of the county become nearly as densely developed as New York City. This means that following the moratorium residents in Westchester will not be able to switch from oil to natural gas, nor developers obtain natural gas service for new construction projects.
But whatever the reason for the imbalance between supply and demand, the moratorium threatens to slow the regional transition from heating oil to more environmentally-friendly, cleaner-burning gas.
Other energy firms have tried for years to propose the construction of gas pipes from the Marcellus shale in Pennsylvania to New York, but regulators in Albany have denied some of those projects for environmental reasons. National Grid for example still needs the approval and permitting of the Northeast Supply Enhancement Pipeline Project. This is currently scheduled to be in service by December 2020 and designed to deliver additional gas supply to its system. Its possible that National Grid may have to do the same and impose a moratorium if the pipeline it needs is not approved.
If this tightened gas supply trend continues, New York State’s population will be left vulnerable and without reliable, affordable heat.
Financial implications of the moratorium
There are financial implications for existing residents in Westchester county and for those seeking to develop in it.
Westchester is one of the most affluent parts of New York State where almost 1M residents have a median household income of $90,000. It is also a fast-growing area with a high demand for gas. The moratorium will make it harder and more expensive for its residents to heat their homes. Many consumers using oil want to switch to gas for heat not only because it is cleaner but because it is cheaper to burn. Demand is surging as local governments phase out high-polluting fuel oil units amid low gas prices and as ConEd customers rush to switch to gas to save money. According to the Energy Information Administration, the average US Northeast household was expected to spend just under $750 to heat with gas, just over $1400 for electricity or just over $1,500 with oil this winter, according to federal estimates. Residents denied access to natural gas will therefore have to pay twice as much or more to heat their homes. This is perceived by some to be a hidden political tax on their energy options, by others a step in the right direction towards environmental protection, as long as oil usage can be avoided.
County officials say that they cannot afford for development in the county, including ironically, Cuomo administration projects, to terminate. Westchester County, projects that the construction of 16,000 homes could be suspended, including affordable housing initiatives, and another 2 million sq ft (190,000 sq m) of retail and commercial space could be affected, according to a preliminary economic analysis.
Solutions available for Westchester residents and developers
Due to the rejection of permits by the State's Governor Andrew Cuomo for most new gas pipeline projects in recent years, pipeline developers have shied away from proposing projects in the state.
Instead of investing in new gas pipelines, the State has encouraged companies to put more money into energy efficiency and renewable energy projects. The Commission called on ConEd to promptly find and develop clean energy solutions to ensure system reliability.
Clean energy solutions promoted by ConEd
The $233 million ConEd program is designed to lower gas demand through energy-efficiency measures and the deployment of ground-source heat pump technology and other non-pipeline alternatives to maintain reliability for existing customers, according the regulator, the Commission. It is a conservation plan that includes getting low to moderate income customers and others to cut back using innovative ways to meet their customers’ heating and cooking needs.
The energy utility company is continuing to pursue non-pipeline solutions, that reduce reliance on fossil fuels through renewable technologies. These include:
- electric heating options, such as heat pumps
- taking interruptible service for commercial projects (which requires an on-site fuel supply when the gas system is constrained, usually oil)
ConEd says it will continue to work with its customers to help them find clean energy alternatives and cut costs for them. It is also exploring an oil-to-electric conversion pilot.
The Commission has indicated that it will monitor the utility’s interactions with customers to make sure they are aware of the alternatives.
During this unsettling time in the run up to the moratorium, professional support is at hand. New York based MEP engineers familiar with energy and electrical system projects, including conversions, particular equipment specification and installation issues, can assist you in assessing evaluating your options through value-engineering prior to and following the moratorium and during implementation of any changes.