Williams expects to overcome environmental concerns on Northeast Supply natgas pipe

(Reuters) - Williams Cos Inc said on Thursday it believes it can answer concerns raised by environmental regulators in New York and New Jersey about the company’s proposed Northeast Supply Enhancement (NESE) project and get the natural gas pipe built by the winter of 2020/2021.

The New Jersey Department of Environmental Protection denied Williams’ application for water quality certification, a permit the $1 billion NESE needs, because it could “adversely impact surface water quality.”

That rejection followed a similar one by the New York Department of Environmental Conservation in May.

The denials were the latest of many for projects that New York and New Jersey have rejected for environmental reasons in recent years. Politicians in both states have said they want utilities to invest more in renewable power and energy efficiency rather than projects that burn fossil fuels and produce carbon emissions.

“We believe that we can be responsive to the issues raised by the agency and intend to resubmit the application ... in a timely manner to maintain the customer’s in-service date requirement,” Williams said in a statement following the New Jersey rejection.

That customer is National Grid Plc, the biggest distributor of gas in the U.S. Northeast. National Grid said it continues to accept applications from homes and businesses for new gas service in the New York City area but will not process any until NESE is allowed to proceed.

“We remain cautiously optimistic (NESE) will proceed on schedule and be in service for Brooklyn, Queens and Long Island customers by the winter of 20/21,” National Grid said in a statement.

National Grid, which serves about 1.8 million customers in Brooklyn, Queens, Staten Island and Long Island, has said it was converting about 8,000 of those customers per year to gas from heating oil.

But without NESE, the utility says it will not have access to enough gas to keep converting customers. Consumers want to convert from oil to gas to heat their homes because gas is cheaper and cleaner than oil.

If built, NESE would transport 0.4 billion cubic feet per day of gas from Pennsylvania to New York. One billion cubic feet is enough gas for about 5 million U.S. homes for a day.

In March, another New York utility, Consolidated Edison Inc, imposed a moratorium on new gas customers in Westchester County due to a lack of new pipeline infrastructure. Westchester is located north of New York City.

Reporting by Scott DiSavino; Editing by Susan Thomas