On February 13, 2019, I appeared and spoke at a Public Service Commission (“PSC”) hearing on the Con Edison Natural Gas Moratorium. Many of our public and private clients are greatly impacted by Con Edison’s sudden announcement of the moratorium on January 18, 2019, which is to go into effect one month from now, on March 15th. My comments are not on behalf of any particular client, but rather in my individual capacity as an attorney with 25 years experience in the real estate and development industry in the Hudson Valley.
It is concerning that a public utility can unilaterally announce a moratorium. When a municipality wishes to adopt a moratorium with respect to its zoning ordinance or any of its infrastructure such as capacity for water or sewer expansion, it is required by New York State law to hold a public hearing, set forth the length of the moratorium and provide a mechanism for hardship relief. Con Edison’s moratorium has none of those elements. Given the Governor’s 2030 energy program and the building boom that is occurring in various parts of New York State, I strongly urge the PSC to adopt regulations governing when and how a public utility can adopt a moratorium on new service connections. There are clearly examples when a moratorium has to be implemented quickly, such as in Massachusetts and Rhode Island, when there was a safety concern regarding over pressurization of the gas lines. The regulations can provide for exemptions for emergency situations. However, as I will discuss briefly in a moment, Con Edison’s moratorium was not unexpected and in those cases, there should be a requirement by the PSC that there be a public hearing and advance notice to 1) the PSC itself; 2) to the legislative bodies of the County and Local communities; and 3) the Utilities’ customers. None of that occurred here and as you must recognize, the development community was caught off guard as were the local public agencies such as municipalities and school districts. The PSC has the ability to regulate imposition of moratoriums by public utilities and it should consider that rule making promptly.
I next urge the PSC to investigate when Con Edison knew a moratorium was necessary and why it only provided seven weeks advance notice. Though I am still learning more, it is my understanding that when NYSEG imposed its moratorium in the Town of Lansing it provided a year’s advance notice. Why did Con Ed only provide seven weeks’ notice? That needs to be investigated. Additionally, I am troubled that in Con Edison’s September 28th filing with the PSC it stated “a temporary moratorium on new gas customer connections remains a possibility.” Yet, last week, when the PSC was voting on Con Edison’s September 28th application, Commissioner Burman asked Con Edison if the “Smart Solutions” Program is put into action if the moratorium would still be necessary? Con Edison responded and I quote as follows: “EVEN IF ALL OF THE SMART SOLUTIONS COME TO FRUITION, IT IS UNLIKELY THAT CON EDISON WOULD BE ABLE TO LIFT THE MORATORIUM.”
Con Edison must be required to explain what changed between September 28th and January 18th that resulted in the imposition of the moratorium. To summarize, Con Edison stated four (4) months ago that a moratorium “may be necessary” and then three months later, imposed a moratorium and now last week, stated that even the measures it was proposing would not provide relief from the moratorium. It strikes me that Con Edison knew well in advance of January 18th that a moratorium was necessary and would be required. That is not fair to the regulated community, especially when Con Edison only provided 7 weeks advance notice to the real estate community who has reinvested millions of dollars in Westchester County. Notions of fairness and fundamental due process require otherwise and Con Edison must be held accountable.
My third point is that the PSC must require Con Edison to evaluate the impact of no longer providing natural gas to its customers and encouraging alternative energy sources that require electricity. Specifically, what will the impact be on Con Edison’s existing electricity infrastructure? For example, are we to expect an electrical moratorium in the coming years? Has Con Edison adequately invested in upgrading its electrical infrastructure to account for its inability to supply natural gas to its customers which will force customers to use more electricity? I understand this is an issue that should not be unfamiliar to the PSC as the Town of Lansing has these same concerns about NYSEG’s electrical infrastructure. Let’s not wait to announce an electrical moratorium until 7 weeks before it is necessary, but let’s be proactive and ask the obvious questions now. I strongly urge the PSC to do so and not wait until its report to be issued on July 1st. It is obvious this will be needed and the residents of Westchester County deserve such assurances.
My fourth and final point is that the PSC should direct Con Edison to push back its unilateral and arbitrary moratorium deadline of March 15, 2019, the Ides of March. Con Edison only provided the development community 7 weeks advance notice of the imposition of the moratorium. Why not 10 weeks, why not 3 months? Con Edison has stated that it might deny applications submitted before March 15th, based upon its ability to supply the gas, so then why have such a short time period? Why not extend it to a more reasonable time period to allow the community to submit its applications with the understanding that it is on a rolling first come, first serve basis based upon availability, but at least that would allow for everyone to be treated fairly and for a wait list, if you will, to be established.
Our firm, Keane & Beane, has held meetings with the development community and prepared written legal alerts notifying our clients of the Con Edison moratorium. We can all readily acknowledge, however, that there will be those developers, those homeowners, those public entities who are caught off guard, who remain unaware, who don’t fully understand the ramifications. There is no reason to have an arbitrary March 15th deadline and as the County Executive has urged, that date should be extended. As evidence of same, I want to read to you a response I received from one of our clients when I alerted them to the natural gas moratorium. This individual stated as follows: “I would be interested in learning the time frames and reality of the March application deadline vis a vis location. I have to believe some locations are ok still for Con Ed and some not.” The word is not getting out and to the extent it is, it not being fully understood.
Con Edison needs to do better. Con Edison should be going to each of the affected municipalities and appearing before not just the legislative bodies, but the planning and zoning boards, the public agencies that deal with real estate development. Con Edison should also be meeting with building inspectors as well as the development community. I know Con Edison has done some outreach, but there are opportunities to do it better and to do more. Con Edison should also develop more substantive frequently asked questions. Right now it reads as though its FAQ stands for a “Few Asked Questions.” For example, Con Edison could have a Q&A regarding natural gas connections which I understand are allowed for emergency generators, but that is not stated on Con Edison’s FAQ. Likewise, Con Edison doesn’t explain how this will affect a new restaurant that wants to open where there is no existing natural gas connection. It is my understanding that no new restaurants have opened in the Town of Lansing since NYSEG’s natural gas moratorium.
Con Edison can, must and should be held accountable to do better. Con Edison and the PSC must have a “Smarter Solution” than what has been proposed.
If you have any questions, contact Nicholas M. Ward-Willis