Via an October 11 one-commissioner order from Chair John Rhodes, the New York PSC ordered KeySpan New York and KeySpan Long Island (National Grid) to provide natural gas service to about 1,100 residential and small commercial customers who were denied service due to a moratorium, or show cause within seven days why the LDCs cannot do so.

The PSC said, "Based upon its investigation to date, the Department has determined that National Grid has denied gas service to more than 3,700 new and existing customers in its Brooklyn, Queens, and Long Island service areas. This action began in or about November 2018, expanded in May 2019, and continues to date. The Department’s investigation into specific customer complaints and into National Grid’s general approach to process requests for gas service indicates that during this timeframe National Grid has declined to provide gas service to certain existing customers that, if served, would not have materially increased gas demand. Of the group of customers denied service, the Department focused in particular on residential customers because of the immediate need for gas service prior to the fast approaching winter months. The Department has determined that the 1,157 residential and small commercial customers denied service represent less than 0.05 percent of the 2.8 million Dth/day peak demand forecast associated with National Grid’s gas delivery systems at issue."

The PSC said, "The Department’s investigation also shows that National Grid failed to undertake a case-by-case determination prior to denying service to these customers. For example, National Grid denied service to existing customers that renovated their residential properties without having sufficiently demonstrated that these requests for service would increase peak day demand. National Grid also denied service to existing customers wishing to restart service at different, pre-existing premises."

The PSC said, "National Grid has asserted that some of the premises in question were inactive for more than 24 months and thus National Grid’s decision to deny service was justified because the recommencement of service would constitute an increase in demand that the company lacked supply to meet. As noted, many of the customers denied service are existing customers. The Department’s investigation showed that 218 customers denied service did not fall outside of this 24-month window, with many of the customers inactive for a short duration. Given that National Grid has 1.8 million customers, it is inevitable that during any 24-month period, a relatively constant number of customer accounts would be inactive because of a lengthy renovation. The Companies’ load forecast(s) should have presumed the presence of this customer group. In any event, with respect to the residential customers at issue, the 0.05 percent of load attributable to the 1,157 customers denied service does not constitute a material increase in gas usage."

The PSC said, "National Grid’s failure to provide these customers with adequate notice regarding the decision to deny service before May 2019 placed many of these customers in the untenable position of having invested in an ongoing renovation without knowing that the renovated residence or business would not be provided with basic gas service. Other customers were placed in the position of having rented or purchased homes without knowing that their gas service applications would be denied. National Grid did not provide advance notice to these customers that it would not provide service after a future date."

The PSC said, "Accordingly, in the Department’s view, the failure to provide service to the 1,157 residential and small business customers denied service since May 2019, coupled with the lack of adequate notice, constitutes an 'undue hardship' within the meaning of PSL §66-a(1)."

The PSC said, "Given the onset of winter heating season, this Order directs National Grid to provide gas service to these customers immediately, or show cause within seven days why the Companies cannot do so."

The PSC said, "In addition, the Department’s investigation has also shown that there were and are numerous options available to National Grid, including the implementation of aggressive demand response and energy efficiency programs, and alternative supply options, that could, at a minimum, accommodate the limited load associated with these 1,157 customers. Implementation of these demand and supply options may also allow the Companies to provide service to the numerous other customers denied service from November 2018 to date."

The PSC said, "The Department is also concerned that National Grid did not pursue a portfolio of alternative supply and demand reduction measures before determining that a moratorium on new or expanded service connections was warranted for large customers in November 2018 and all customers in May 2019."

The PSC said, "Given the onset of the winter heating season, this Order directs National Grid to provide an Implementation Plan to the Commission within ten days, or show cause within ten days of this Order why the Companies cannot do so. The Implementation Plan shall identify a portfolio of demand and supply solutions that would allow the company to initially connect the 1,157 customers identified above, and, as supply and demand solutions materialize in excess of the load associated with the initial 1,157 customers to also connect additional customers denied service to date as the Companies are safely able to do so."

The PSC said, "The Department is reviewing National Grid’s reliability planning strategies as part of its ongoing investigation. In the meantime, National Grid’s chosen solution to meet the needs of its customers – a new interstate pipeline – continues to experience permitting challenges in New York and New Jersey. Given that the Department cannot know the outcome of the proposed solution, there is a concern that the remaining customers that were denied service by National Grid since November 2018 that will not be reached by the Implemental Plan above, will continue to face hardship, unless alternative solutions are identified. Thus, this Order also directs National Grid to develop and file a Contingency Plan that identifies alternative supply and demand solutions that could be implemented to safely accommodate all customers that have been denied service to date – or show cause why the Companies cannot do so within ten days of this Order."

The PSC said, "Finally, National Grid’s actions to date may constitute a violation of PSL §§ 31 and 66-a. Accordingly, this Order also directs National Grid to show cause why it is not subject to the imposition of financial penalties pursuant to PSL §§ 25 and 25-a."

The office of Gov. Andrew M. Cuomo alleged that, "National Grid is facing millions of dollars in penalties for failing to connect existing residential customers with natural gas as required by the Public Service Law," though the show cause order does not opine on the amount of any potential financial penalties

Case 19-G-0678

Tags:
New York   KeySpan   National Grid   Natural gas  

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