Mayors Say Natural Gas Moratorium Impact Not as Severe as First Thought

John Jordan | April 2019

From left, White Plains Mayor Thomas Roach, New Rochelle Mayor Noam Bramson and Yonkers Planning and Development Commissioner Wilson Kimball

WHITE PLAINS—The mayors of White Plains and New Rochelle agree that the impacts thus far from the natural gas connection moratorium imposed by utility Con Edison on March 15 has not been severe.

White Plains Mayor Thomas Roach and New Rochelle Mayor Noam Bramson agreed that real estate developers are attempting to adapt to the tenets of the moratorium on new natural gas connections. Some filed for work orders with the utility prior to the March 15th deadline, while others are exploring new avenues for their developments, including interruptible power that would require the building owner to switch to an alternative energy source in times of peak natural gas demand.

Mayors Roach and Bramson along with Yonkers Planning and Development Commissioner Wilson Kimball addressed the impacts of the natural gas moratorium, along with a host of other topics at a luncheon meeting of the Building Owner and Manager’s Association Westchester County chapter held on April 11 at 360 Hamilton Ave. in White Plains.

Mayor Bramson confided that when he first learned of the planned natural gas moratorium, “My first feeling was my goodness we worked so hard over a period of years to finally put ourselves in a position where we can attract meaningful investment to our downtown and all the benefits that flow from that, is this one thing going to sink the ship and put a hard stop on everything we have accomplished and everything we had anticipated?”

The mayor noted that while he is certainly in favor of transitioning away from fossil fuels to more clean and efficient energy sources, he and other municipal officials were upset over the little advance warning that was given to the moratorium’s imposition. He said that many believed that the short time frame from the first notice of the moratorium in January until its imposition in March offered developers little chance to respond in kind

“I have been pleasantly surprised in the time since to learn that this has had less of an impact than I had feared,” Mayor Bramson said.

He said that there are alternatives available to developers, including meeting the terms of the moratorium and completing their project in two years; interruptible service (switching to oil during peak natural gas usage periods) and utilizing renewable sources for heating. Both ConEdison, NYSERDA and other state agencies have each announced significant funding available for renewable energy projects in Westchester recently.

The mayor said, “What we discovered is that all of the developers in New Rochelle playing in our sandbox feel as though at least one of those options will likely work for them. So at least as of now there is not one single project that has pulled out of New Rochelle.”

Yonkers Planning and Development Commissioner Kimball said the city does not know what the eventual impact of the natural gas moratorium will have on its development pipeline.

Kimball said she is “cautiously optimistic” that developers can adapt to the changing energy landscape in the affected areas of Westchester and will move forward with their projects in the city.

She said she was “very annoyed” over the lack of notice over the crisis concerning natural gas availability and specifically the lack of pipeline capacity that led to the moratorium. Kimball said that Con Edison has stated that it will announce on April 15 which projects that applied before the March 15th deadline had been approved for future natural gas service.

Kimball did say that one project that is “at risk” is the Chicken Island project. The City of Yonkers announced last October it had signed a letter of intent to sell the six-acre property located northeast of City Hall for $16 million cash to New York City-based AMS Acquisitions LLC. AMS is reportedly planning a major mixed-use property at the site.

White Plains Mayor Roach said that all of the developers he has spoken with are confident they will move forward with their projects.

The mayor said that while initially upsetting, the natural gas moratorium provides the opportunity for Westchester to advance programs that will foster cleaner energy usage more quickly. “It’s an opportunity to accelerate towards renewables,” he noted.

While some in the business community are pushing for more pipeline projects to help address the problem, Mayor Roach said that approvals for these ventures would take years and take even longer to come on-line.

He said that in addition to interruptible energy systems, as well as geothermal systems. He believes the state should look to provide incentives for geothermal project use and was heartened when he heard that Con Edison President Tim Cawley spoke favorably about geothermal at an upstate conference on April 10.

Cawley, speaking in Schenectady at the annual conference of the New York Geothermal Energy Organization, said Con Edison has new incentive programs to reduce the upfront costs of heat pumps, particularly in Westchester County.

He said Con Edison and the geothermal industry can collaborate to create a future of cleaner heating solutions.

“Let’s work together to learn how we can reduce the costs of systems and help the industry get to scale,” he said. “We want your input into the most effective ways to reach out and communicate the benefits of heat pumps to customers.

“The benefits—cleaner air and water and a more vibrant economy—will make it all worthwhile,” he added.

Con Edison is providing incentives for ground-source and air-source heat pumps under its Smart Solutions for Gas program. That program seeks to encourage customers to take advantage of high-efficiency electric heating technology and reduce their need for the use of fossil fuels. Combined with the state’s renewable energy goals for electricity, these measures will lead to a cleaner energy future for New Yorkers, the utility stated.

The Smart Solutions program also includes increased incentives for gas energy efficiency programs and home weatherization. On the supply side, Con Edison is looking to construct compressed natural gas, liquefied natural gas and biogas facilities.

The incentives from Con Edison and the New York State Energy Research and Development Authority offset about 30% of a geothermal system for a Westchester customer. After incentives and the tax credit, customers can earn a return on their investment in about five to seven years.

While offering the incentives, the company continues to pursue interstate transmission pipeline projects that can get state, local approvals, he noted.

The mayors at the BOMA luncheon discussed a number of other key issues, including labor issues (state proposal that would require any IDA providing incentives to require developers to pay construction workers prevailing wage rates); affordable housing and federal opportunity zones.

The mayors and Commissioner Kimball also estimated that between the three cities, there are currently approximately 15,000 new apartment units in the development pipeline.

John Jordan
Editor, Real Estate In-Depth