Con Ed Reaches Deal to Expand Pipeline That Could Lift Westchester Natural Gas Moratorium in Four Years

John Jordan | April 2019

NEW YORK CITY—Con Edison has proposed a major project that could bring sufficient natural gas to sections of Westchester County impacted by the utility’s moratorium imposed last month. The only problem is the remedy won’t be online for four-and-a-half years at the earliest.

Utility Con Edison reported on April 24  that it reached an agreement with Tennessee Gas Pipeline to increase capacity in its existing natural gas pipeline that connects to Con Edison’s distribution system to Westchester County.

The deal, if approved, would upgrade and enhance the capability of the existing pipeline to transport additional natural gas for Con Edison and provide the incremental capacity to enable Con Edison to lift the moratorium on new natural gas connections in most of Westchester County it imposed on March 15. The utility said the new natural gas capacity from the Tennessee Gas Pipeline could be in service by November 2023.

No financial terms of the agreement between Con Edison and Tennessee Gas Pipeline were disclosed at press time.

Tim Cawley, president of Con Edison

“This project offers a reasonable, sensible approach to allow an orderly transition to the renewable energy future we all desire,” said Tim Cawley, president of Con Edison. “The solution provides the time needed to improve non-pipeline technology and make it widely available. The additional natural gas capacity will continue to support economic growth in our region, while reducing reliance on heating oil and the need for locally delivered compressed and liquid natural gas.”

Con Edison reported that it is continuing to implement the company’s $223-million Smart Solutions program for customers interested in alternatives to natural gas, including incentives to electrify heating systems, upgrade HVAC controls, install geothermal heat pumps or weatherize their homes. The increased gas capacity plan, which was approved by the New York State Public Service Commission earlier this year, allows more time for technologies to advance, and for customer adoption to increase for alternative heating and cooking solutions, the utility stated.

Con Edison reports that it received 1,600 applications for natural gas service in the moratorium area from the time the company first announced its intent to impose the moratorium in January and its imposition on March 15.

The utility notes that demand for natural gas in New York City and Westchester County has grown significantly in recent years due to conversions of heating systems from oil to natural gas, as well as economic growth, with developers preferring natural gas in new buildings. At present, the utility has not imposed a natural gas connection moratorium for its service area in New York City.

The Business Council of Westchester, which has formed a task force to deal with the impact the natural gas moratorium might have on development projects in the affected areas, said the agreement between Con Edison and Tennessee Gas Pipeline “offered a ray of hope for our increasingly energy-starved region.”

However, the Business Council in a prepared statement, added, “Unfortunately, this potential increase to the available supply requires its own set of approvals. Con Edison characterized it this way: ‘The incremental capacity could be placed in service by November 2023.’ That’s four and a half years, if the approval goes smoothly, and at least four and a half years more of the moratorium on new gas hookups in most of Westchester.”

The Business Council of Westchester states that it is planning to hold an energy conference on May 10 to discuss the natural gas moratorium and its potential impacts on proposed development projects in Mount Vernon, New Rochelle, Yonkers and White Plains, that are part of the region under the natural gas connection moratorium.

Earlier this month the mayors of New Rochelle and White Plains said that the impacts of the natural gas moratorium, at least initially, were not as bad as first feared and that no developer has pulled their projects from consideration due to the natural gas connection moratorium. At the BOMA session, Yonkers Planning and Development Commissioner Wilson Kimball said it is too early to tell the impact the natural gas connection moratorium will have on development projects in the pipeline in the city.

One project that could be impacted by the moratorium, she said at the meeting held at 360 Hamilton Ave., is a project to redevelop the Chicken Island property near City Hall in Downtown Yonkers.

In another pipeline expansion-related deal, Con Edison announced an agreement on May 9 with Iroquois Gas Transmission System, L.P. to develop and permit a rational solution that would provide needed incremental natural gas capacity to the Bronx and parts of Manhattan and Queens.

Under the agreement, Iroquois Gas would provide increased natural gas capacity to Con Edison’s distribution system that serves New York City by upgrading compression facilities on the Iroquois system. These upgrades will enhance Iroquois’ capability to transport much needed natural gas supplies to Con Edison customers. Subject to the necessary permits and approvals, the incremental capacity could be placed in service by November 2023.

John Jordan
Editor, Real Estate In-Depth