National Grid Halts New Gas Service Until Williams Pipeline Approved

(P&GJ) – National Grid, which supplies power to more than 20 million people in the U.S. Northeast, said it will not accept any new natural gas customers in its New York City and Long Island service areas until state regulators approve permits for construction of Williams' Northeast Supply Enhancement (NESE) pipeline.

source: Energy Web Atlas/P&GJ

The announcement by National Grid followed the denial last week of Williams' application for water quality certification by the New York Department of Environmental Conservation (DEC).

"While we continue to receive applications for new and expanded firm gas service ... none will be processed until the permits are received and (NESE) is allowed to proceed," National Grid said in a statement. 

The $1 billion NESE would be a 400,000-Mmcfd, 24-mile subsea pipeline extending from the New Jersey shore across Raritan Bay and interconnecting with Williams' existing Transco pipeline into New York.  It would connect National Grid to additional natural gas supply from the prolific Marcellus Basin.

The pipeline was approved by the Federal Energy Regulatory Commission on May 3.  New Jersey regulators have until June 5 to decide on the project

The New York DEC, in denying the permit, said the project “fails to meet New York State’s rigorous water quality standards” and “would cause impacts to habitats due to the disturbance of shellfish beds and other benthic resources.”

Williams spokesman Chris Stockton said the DEC “raised a minor technical issue” with its application for water quality certification.

”Our team will be evaluating the issue and resubmitting the application quickly,” Stockton said. “We are confident that we can be responsive to this technical concern, meet our customer’s in-service date and avoid a moratorium that would have a devastating impact on the regional economy and environment.”

National Grid says the project is crucial because existing pipeline infrastructure is at capacity and natural gas demand is projected to rise 10% in the next decade in the New York City region.  The utility serves about 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island.  It has been converting about 8,000 customers per year to natural gas from heating oil.

The rejection by New York's DEC continues a pattern of repeatedly denying pipeline projects on environmental grounds over the past several years. New York Governor Andrew Cuomo wants utilities such as National Grid to invest more in renewable power and energy efficiency rather than fossil-fired projects.

National Grid, which serves about 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island, has said it was converting about 8,000 of those New York City-Long Island customers per year to gas from heating oil.  Demand for natural gas has grown significantly in recent years due to the heating-system conversions and to economic growth, with developers preferring natural gas in new buildings.

In March, another New York City-area utility, Consolidated Edison Inc, imposed a moratorium on new gas customers in its Westchester County service area due to a lack of new pipeline infrastructure. Westchester is located north of New York City.

Con Edison warned in April it may be forced to impose a moratorium in its New York City territory in the future if NESE is not built since it shares some gas infrastructure with National Grid.

Con Edison reached an agreement in April with Tennessee Gas Pipeline, which supplies gas to Westchester County, to increase to Con Ed’s distribution system in Westchester by upgrading compression facilities on the transmission system outside of New York State. approvals, the incremental capacity could be placed in service by November 2023.

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