On January 18th, Con Edison issued a statement that effective March 15, 2019, Con Ed will not accept new longer be accepting applications to allow connections for natural gas service in much of Westchester County. Important insights into the possible impacts from the moratorium in Westchester County can be obtained from a similar moratorium that were imposed in parts of the Town and Village of Lansing in upstate New York.
In February 2017, New York State Electric and Gas Company (NYSEG) instituted a moratorium on new natural gas connections in parts of the Town/Village of Lansing due to inadequate infrastructure to provide a sufficient amount of gas to existing and new customers. The reason NYSEG was unable to provide a sufficient supply of as was due to NYSEG’s inability to install a new gas pipeline that could provide additional natural gas due resulting from the efforts of a number of local environmentalists who were able to block the installation of the new pipeline.
After speaking with elected officials and local engineering and planning consultants, it is clear that there have been a number of direct impacts from the moratorium in the Town and Village of Lansing, including the following:
- A medical facility in the Village of Lansing was unable to proceed with an expansion that would have created 100 new jobs, resulting in the entire facility leaving the state and the loss of 200 jobs.
- The Lansing Cayuga Power Plant located in the Town of Lansing was unable to switch from coal to natural gas.
- No new restaurants have been developed due to the inability to connect to natural gas.
- The School District is considering conversion from natural gas to an electric sourced HVAC system or geothermal heating, requiring an increase in taxes.
- Many new single family homes have installed propane tanks at a higher cost and will still require the delivery of natural gas supplies by truck.
- Multi-family residential developments have been required to install heat pumps at higher cost that use electricity that costs more.
- It is likely that there will need to be an upgrade to the existing electrical distribution infrastructure since use of electricity will likely exceed what the existing infrastructure can support.
In order to address the moratorium, the New York State Public Service Commission is proposing that NYSEG consider non-pipeline alternatives, including:
- Installation of a compressor pump solution to address supply during cold whether;
- Requests for proposals for other energy sources to support the local gas distribution system;
- Virtual pipelines – trucking in natural gas to increase supply.
However, none of these alternative solutions will result in removal of the moratorium because existing natural gas customers will not switch to other energy sources. The same will likely be true in Westchester County. We will continue to monitor the situation in the Town/Village of Lansing in order to evaluate other possible impacts and solutions.
More information can be obtained by contacting the real estate attorneys at Keane & Beane. For more information, contact Eric L. Gordon at egordon@kblaw.com. You may also request to be added to future Legal Alerts on this topic.
