Con Ed Gas Moratorium for Westchester in Effect; State Offers New Clean Energy Plan

John Jordan | March 2019

WHITE PLAINS—The day business, political and real estate leaders have dreaded has arrived—on March 15 most of Westchester County was included in a new natural gas connection moratorium imposed by utility Con Edison.

Amid charges by many that the moratorium will delay and perhaps kill billions of dollars in new development projects and thousands of construction jobs, New York State extended a lifeline of sorts. However, most see the state’s 11th hour announcement as a first step in what will have to be a multi-pronged approach to deal with the energy crisis now facing the region.

Within hours of Con Edison imposing a moratorium on new natural gas connections on most of Westchester County, the state offered funding for clean energy projects to soften the moratorium’s impact.

Con Edison’s new natural gas connection moratorium, which was announced on Jan. 18, went into effect officially on March 15, impacting new development projects in the pipeline in cities such as Yonkers, New Rochelle, Mount Vernon and White Plains. A Con Edison spokesman said that since the utility notified the state Public Service Commission of its intent to impose the moratorium, Con Edison has received more than 1,300 applications from properties for natural gas. For those applicants that are granted natural gas connection permits, they have two years from that date to have their projects ready to accept natural gas. Many industry observers say that deadline is impossible for some projects still engaged in municipal approvals.

Less than nine hours from the time the moratorium was put in place by Con Edison, the New York State Energy Research and Development Authority, the Department of Public Service (PSC) and the New York Power Authority announced a “Westchester Clean Energy Action Plan” to provide relief to Westchester County businesses and residents affected by Con Edison’s natural gas connection moratorium.

The New York State Public Service Commission held hearings last month in White Plains and is currently reviewing Con Edison’s claims of a shortage in natural gas supply. The PSC is scheduled to release the results of its investigation on July 1.

Con Edison has blamed a large spike in consumer demand for the more inexpensive natural gas, as well as a state regulatory environment that has thwarted a number of natural gas pipeline projects from bringing natural gas to sections of Westchester County for the decision to impose the moratorium. A swath of Northern Westchester County, including the City of Peekskill, is not under the newly imposed natural gas connection moratorium.

In the interim, the state is advancing the $250-million Westchester Clean Energy Investment Program to provide local investment in clean energy alternatives, such as electric heat pumps, high-efficiency appliances, equipment and building materials that will lower energy costs for consumers and reduce demand in order to accommodate new customers.

Business, municipal and political leaders have called the Westchester Clean Energy Investment Program “a good first step” in attempting to solve the crisis affecting the Westchester County economy.

Specifics of the $250-million Westchester Clean Energy Investment Program include: $165 million in grants from the Smart Solutions package that the Public Service Commission recently directed Con Edison to deploy toward heat pumps and increasing gas efficiency for residential, multifamily and commercial and industrial customers. Other program components include an additional $53 million in clean energy incentives and investments that NYSERDA will provide to Westchester customers; $28 million of which will be used for grants for new customers, including low-to-moderate residential developments waitlisted by Con Edison for natural gas to use alternative heating and cooling systems and adopt energy efficient solutions. The remaining $25 million in NYSERDA funding will be used to provide grants to improve energy efficiency in Westchester and reduce overall and peak energy demand from existing customers in the region to free up capacity.

An additional $32 million in low-cost NYPA financing will be earmarked for its Westchester customers to retrofit heating systems with clean energy alternatives.

The state agencies in a joint announcement stated that the funding is targeted directly to the Westchester area and in zones where investments can have the greatest impact in reducing demand constraints and are estimated to reduce energy consumption equivalent to the amount of gas needed to heat more than 90,000 homes.

NYSERDA, NYPA, and Westchester County will support expanded contractor training in Westchester to ensure there are sufficient trained professionals to deliver these solutions in a timely manner.

Alicia Barton, president and CEO, NYSERDA, said, “I’m pleased NYSERDA can be part of the solution and support accelerated deployment of clean energy programs and incentives to customers in Westchester County. We are committed to ensuring that all New Yorkers have access to affordable, safe, clean and reliable energy sources and that we can support energy upgrades in a way that drives economic growth.”

John Rhodes, CEO, Department of Public Service, said, “We are advancing initiatives to dramatically improve energy efficiency, scale demand response programs and expedite the transition to electrified heating systems, such as state-of-the-art heat pumps, all of which will offset demand for natural gas. The PSC is also pushing utility companies to use existing infrastructure more efficiently while ensuring consumers have access to affordable and reliable energy.”

Westchester County Executive George Latimer said of the new state funding in connection with the moratorium, “The deadline imposed by the abrupt announcement to place a moratorium on gas hookups throughout most of Westchester is now here. This is serious and threatens important development projects in Westchester County including affordable housing, mixed use housing, retail and commercial developments, transit-oriented development, business expansions, and more.”

Latimer, who requested Con Edison and the PSC delay the moratorium until Aug. 1, added, “I am grateful for these state agencies coming together with a $250-million action plan for Westchester. I thank Gov. Andrew Cuomo for recognizing the seriousness of this situation and taking steps towards preventing the detrimental impact of this moratorium. This fight is far from over.”

Senate Majority Leader Andrea Stewart-Cousins said, “Utilizing state funds to invest in clean energy and higher-efficiency equipment is a common sense-way to improve New Yorkers’ quality of life and combat climate change. I am especially pleased that funds are being set aside to help Westchester energy consumers who will be impacted by Con Edison’s actions.”

State Assemblywoman Amy Paulin (D-Scarsdale), characterized the state’s Westchester Clean Energy Action Plan as “a good first step in providing consumers with immediate options and clean energy solutions to heat their homes more affordably. The recently announced moratorium on new natural gas service in Westchester County underlined the need for urgent, creative solutions for expediting our clean energy future. We must collectively come together to advance the clean energy economy in a way that protects both our communities and our environment.”

Mayor Thomas Roach, White Plains, said of the state’s efforts, “Conservation saves money, benefits our environment and helps bring us closer to moving away from fossil fuels entirely. I applaud the cooperative actions announced today by NYSERDA, DPS, and NYPA to develop the $250-million Westchester Clean Energy Investment Program. This program represents a vital first step in ensuring our residents have access to safe affordable and reliable energy now and in the years to come.”

John Ravitz, executive vice president and COO of The Business Council of Westchester, stated that the organization supports the state’s recent funding for the Smarts Solutions Program, However, he warned that “the reality is that in order to make sure that Westchester County has the capacity to support the exciting and important new development projects that have been planned in our urban centers, which will create hundreds of new jobs and build new affordable housing units more answers need to be developed. It is time to honestly address how we are going to increase our gas capacity.”

The BCW has formed a task force to address Cod Edison’s gas moratorium. The task force will look to find both short- and long-term solutions, he noted. “The BCW hope that the state and county stakeholders will be open to a solution that includes the many facets of the Smart Solution Program and the expansion of existing supply pipelines.”

NYSERDA will sponsor sustainable and clean energy community workshops in Westchester beginning on April 24 with a workshop in Tarrytown in collaboration with Westchester County. NYSERDA will also provide free screening for electrification options for large customers and expand contractor training in the area.

John Jordan
Editor, Real Estate In-Depth