Governor Issues Letter to Public Service Commission Chair Regarding National Grid

Governor Cuomo issued a letter to Public Service Commission Chair John Rhodes regarding National Grid’s natural gas moratorium.

The full text of the letter is available below:

Dear Mr. Rhodes,

Upon receiving a number of reports that National Grid was using a moratorium to justify suspension of natural gas service to existing customers in portions of New York City and on Long Island, my Administration directed you to investigate whether National Grid was doing so improperly. In response, the Public Service Commission has in fact found that more than 1,100 customers that were improperly denied service should be connected without delay, and the Commission commenced a penalty action against the company. National Grid’s wrongful action denying these customers was outrageous given the number of complaints and customer outrage that had been raised.

I now have a second issue. National Grid has asserted that a natural gas moratorium in the region is necessary unless a new multi-state natural gas pipeline is constructed. This is an admission that National Grid knew that it had a serious supply issue and could not meet its region’s energy needs. Indeed, this was not a startling insight: the looming shortage has been discussed for years with many options for additional gas supply put forward over the years. There is no doubt that the preferred option for National Grid’s self-interest is a pipeline, effectively guaranteeing its future business model.

First, why did National Grid — and your agency for that matter — not better protect customers and consumers by exploring the alternatives to mitigate this obvious supply issue when it was first raised? Why did National Grid allow a crisis to be created that suits its benefit where it essentially extorts the State saying it is either approval of their natural gas pipeline or putting critical development on Long Island in serious jeopardy?

Second, reliance on the pipeline plan as the exclusive option is reckless. The pipeline was never anticipated to be in place before at least 12 to 18 months, and that is barring unforeseen circumstances and many common issues that delay a complicated multi-state project. If other states don’t approve the pipeline or if there is a construction delay, or litigation, or weather and other conditions that slow the project — all probable scenarios — does development on Long Island grind to a halt? Given the uncertainty of such a project — including necessary multi-state approvals and previous community opposition to similar projects — this situation clearly demonstrates the importance of utilities having a diverse portfolio of solutions to meeting its customers’ needs. To put it bluntly: what was the plan if there was a delay and why weren’t alternatives developed?

As the regulator of critical service for residents in the State, it is incumbent upon you to immediately analyze the existing supply needs and provide alternatives to the pipeline and in the event the pipeline project is undertaken and not completed on time. Therefore, I direct you to expeditiously demonstrate that you have fully analyzed the existing supply needs and alternatives to natural gas pipelines including:

(1) The primary alternatives available to meet consumer and business needs while ensuring the reliability of the natural gas system (e.g. oil, propane, shipping of liquified natural gas, renewable sources, demand side energy reductions); and,

(2) Environmental, community, ratepayer, and economic impacts for delivery of alternative sources (e.g. by barge or trucking) to meet demand and ensure reliability.

National Grid consciously failed to develop alternative supplies both as an alternative to the pipeline and as a contingency to a stalled pipeline. Therefore, I would also demand a response to your agency’s performance of its oversight duty in this case. National Grid’s lack of preparedness for the looming supply shortage, failure to explore options, over reliance on a highly complex and controversial pipeline project and extortive behavior wrongfully terminating customers and halting development, were open and obnoxious hostile actions to customers and your agency failed to adequately anticipate, respond, or prevent this harm which was your regulatory duty. I also want to know when and how we eliminate an abusive utility from the state to protect consumers. To that end, I want the specific explanation of potential grounds for revocation of National Grid’s license and its liability for the damage that has already been incurred and future damages which will be incurred over the following 12 to 18 months as development is delayed for additional projects is needed. I would also like the specifics necessary to appoint a monitor to oversee National Grids operation on an intense and constant basis to guarantee consumer protection.

The overall Long Island economy will be effected as well as tax revenues and additional project costs caused by National Grid’s actions.

The fact that National Grid has consumers in a position whereby National Grid gets what it wants or consumers are punished is unconscionable. A utility does not have license to harm customers because it believes it has an irrevocable franchise and is immune from effective regulatory oversight. I will not allow that situation to continue.

I expect an immediate response.

Sincerely,

Governor Andrew M. Cuomo