Experts Say Westchester Natural Gas Moratorium is a Long-Term Problem
Real Estate In-Depth | March 2019
WHITE PLAINS—A real estate attorney speaking before a group of Westchester County commercial brokers said the moratorium on new natural gas connections slated to go into effect on March 15 “is here to stay.”
Officials with Con Edison—the utility that is imposing the moratorium—who participated in the discussion did not disagree.
More than 100 attendees of the Hudson Gateway Association of Realtors’ Commercial Investment Division meeting on Feb. 28 were given an hour-long dose of the harsh reality that now exists for Westchester’s real estate market—a quick remedy to the problem is not available.
The roundtable program held at the HGAR offices in White Plains included attorneys Nicholas M. Ward-Willis and Patrick J. O’Sullivan with the law firm Keane & Beane P.C., Christine Cummings, general manager, gas, Con Edison and John Ravitz, executive vice president and chief operating officer of the Business Council of Westchester. CID President John Barrett moderated the program.
Ward-Willis told the gathering that the announcement by Con Edison on January 18 of the moratorium that begins on March 15 should not have come as a surprise.
He said the moratorium that impacts lower and middle Westchester County is “the new reality—this is the new norm.” He later added, “We need to recognize that this moratorium is here and in my opinion is not going away.”
O’Sullivan shared that the Town of Lansing, NY since February 2017 has been under a new natural gas moratorium imposed by NYSEG. The impacts in this small upstate town have been severe and have included: the loss of a new medical facility that would have created 100 new jobs; the inability to switch the Lansing Cayuga Power Plant from coal to natural gas, no new restaurants proposed due to the inability to connect to natural gas, single family homes having to install propane tanks at higher cost and multifamily residential developments required to install high-cost heat pumps that use electricity rather than natural gas.
Con Edison’s Cummings explained the reasons behind the moratorium and noted that the issue is not a question of insufficient natural gas supply, but not enough connections to bring the natural gas to Westchester County.
Those who file for natural gas connections prior to March 15 will have two years to have the property ready to receive natural gas.
She added the recently approved Smart Solutions program by the New York State Public Service Commission will increase supply by implementing a host of non-pipeline and renewable programs. However, the benefits of the Smart Solutions program will not be enough to enable the utility to lift the moratorium.
That combined with the intense opposition that has been marshalled against proposed natural gas pipelines, makes the natural gas shortage issue a problem that will not be solved quickly.
“We’re not telling you to look for short-term solutions,” Cummings said. “We’re telling you to look for long-term solutions. We will work with you as much as we can, but we’re in a new world order and we are going to have to adjust and adapt to that.”
The Business Council’s Ravitz chronicled the thousands of construction jobs and billions of dollars that are now in jeopardy from new development projects that could be stalled or perhaps even shelved in Westchester County if the natural gas connection moratorium were to remain in effect for a long period of time.
The Business Council has formed a task force to study the problem and recommend solutions to Con Edison, the Public Service Commission and others to address the issue.
Ravitz related that some of the more controversial proposals of Con Edison’s Smart Solutions program was to construct a number of liquified natural gas sites as well as facilities that would convert organic waste into renewable energy.
While the Business Council is supportive of the Smart Solutions program, he related that Con Edison could expect tremendous opposition and legal delays if it were to move forward with its proposed liquified natural gas or waste to renewable energy projects.
Ravitz disagreed with other program participants and stated that one of the solutions to the gas shortage problem will have to be the addition of new pipeline capacity into Westchester County. Getting those projects approved, in the current regulatory environment, will be difficult, he admitted.
He said that the task force will be making recommendations, some of which will be unpopular, such as the expansion of pipeline capacity.
Ravitz concluded his remarks by saying that if New York State politicians and regulators rebuff calls for new expansion capacity, then they need to come up with viable alternatives that will allow the moratorium to be lifted and thus permit the many mixed-use developments in the pipeline to break ground.
He did agree that the natural gas moratorium will likely last a while, noting for example that necessary approvals and construction of new pipeline capacity will take time to complete.
“This is going to be a battle and the business community will have to weigh in,” Ravitz said.
The sponsor of the CID program was Webster Bank.