GUEST VIEWPOINT: Natural Gas Supply Crisis Poses Threat to Region’s Economic Health
John Ravitz | February 2019
Editor’s Note: The following was the testimony given by John Ravitz, executive vice president and chief operating officer of The Business Council of Westchester, at a hearing of the New York State Public Service Commission at a hearing at the White Plains Library on Feb. 13.
Good evening. My name is John Ravitz. I am Vice President and COO of the Business Council of Westchester, the only business membership organization whose focus is on economic development and advocacy in Westchester County. I appreciate the opportunity to address the commission on this urgent matter.
With hundreds of millions of dollars in new development and thousands of residential housing units in jeopardy, the Business Council of Westchester is deeply concerned by Con Edison’s announced moratorium on adding new natural gas customers in Westchester effective March 15. Upon receiving the announcement, the BCW immediately convened a high level briefing with Con Edison that was attended by more than 50 leading developers, all of whom have important proposed development projects pending in Westchester County.
The developers in attendance, and dozens more who have contacted us since, expressed a combination of frustration and anger that the situation has been allowed to reach a full-blown crisis, one that poses a serious threat to the future development and the economic health not just of Westchester, but across the entire metropolitan area.
Without question, the root cause of the problem is the lack of gas transmission pipeline capacity necessary to supply Con Ed with enough gas to meet increased demand. This situation has been years in the making. The state’s unwillingness to approve any new pipelines as a way of encouraging creation of new alternative energy sources has backfired. We now have the worst of both worlds: no available new gas supplies and no viable alternatives!
The pipeline companies have given up trying. Over the years they have spent countless millions seeking environmental approvals for new or expanded lines, only to be rejected in the end. At the same time, alternative energy sources such as wind turbines and solar installations have lagged far behind and face their own environmental obstacles.
The $3.5 million Smart Solutions program, which the BCW has always supported, which was approved last week by the PSC, falls well short of the urgent action that is needed to provide sufficient energy to supply future demand. Two of the key elements of the program—creating up to five natural gas storage sites and three facilities for the conversion of organic waste to renewable energy—will undoubtedly face significant local opposition and require lengthy environmental review processes with no certain outcomes. And, even if some of these measures are ultimately adopted, the impact on the overall energy supply would be too little too late.
An example of what lies ahead can be found in the upstate Village of Lansing near Ithaca, where a natural gas hookup moratorium was imposed. This led directly to the abandonment of a planned new medical facility that would have created 100 new jobs. It should also be noted that since the gas moratorium was put in place in Lansing not a single new restaurant has opened, and the community is facing an economic crisis.
That scenario would be magnified 10-fold in Westchester, which is experiencing a major renaissance in its urban centers including Yonkers, White Plains and New Rochelle. In Yonkers alone, there are 8,000 new units of residential housing and more than 2.2 million square feet of commercial space on the drawing boards, development that is projected to create some 5,400 construction jobs.
Westchester County’s Industrial Development Agency has approved inducements for $881 million in development, including 1,800 units of rental housing estimated to create 2,900 construction and permanent jobs, largely in White Plains. In New Rochelle, the state recently approved more than $100 million in funding for waterfront development.
The moratorium on natural gas puts all these projects at risk. That is not a viable option. The BCW is forming a high-level task force that will fully assess the situation and propose both short and long-term solutions to address the problem. The task force will begin work immediately and will include outreach to local, county and state leaders to work together to address the immediate and long-term situation.
The business and development community stand ready to step forward and work with Con Edison, the state government, the Public Service Commission and other involved parties to tackle the issue head-on. The moratorium is a wake-up call that can’t be ignored. We’re confident that working together we can and will find viable solutions.
Tough decisions must be made in the very near future, and some options will face strong opposition. However, without new gas pipeline capacity to Westchester and the region, we face a huge disruption in economic development and affordable housing projects, particularly in areas that need it most.
The Business Council of Westchester urges in the strongest terms that the PSC review the current situation and offer realistic, quickly achievable solutions starting with exploring ways and a willingness to expand the existing supply pipelines.