(Reuters) - New York Governor Andrew Cuomo on Tuesday gave UK energy company National Grid Plc 14 days to explain why the state should not revoke the utility’s certificate to operate its gas franchise in downstate New York, saying that it had failed to provide “adequate and reliable service.”
The governor, in a statement, cited National Grid’s imposition of a moratorium on new customers, failure to address supply issues and the neglect of the needs of customers.
National Grid said in response that it “is in receipt of the letter ... and will review and respond accordingly within the timeframe outlined.”
The company said it will “continue to work with all parties on these critical natural gas supply issues on behalf of all our customers in downstate New York.”
In May, National Grid announced a moratorium on new gas customers in New York City and Long Island after New York regulators rejected a pipeline that Williams Cos Inc wants to build that will provide gas to National Grid’s downstate customers.
Williams has said it hopes New York and New Jersey will ultimately approve the pipe, called Northeast Supply Enhancement (NESE), which would transport about 0.4 billion cubic feet per day of gas from Pennsylvania to New York - enough to supply about 2.3 million homes.
In October, National Grid said it would reconnect about 1,000 gas customers in New York City and Long Island following a state order after the utility previously refused to reinstate service, citing short supply.
Those were existing customers who had their service turned off for things like renovation or construction, according to local media reports.
Cuomo said National Grid has made clear that its only plan for future supply was based on the construction of Williams’ NESE pipeline.
“The plan to build such a pipeline was risky at best. The pipeline required multiple regulatory approvals in both states (New York and New Jersey), faced multiple potential legal challenges and construction hurdles,” Cuomo said.
The governor said National Grid could have planned to truck or barge more gas into the region to increase supplies and adopted more demand response and energy efficiency programs to reduce usage.
National Grid does have a plan to truck liquefied natural gas and compressed natural gas (CNG) to New York and New England to ensure customers have enough gas to heat homes and businesses on the coldest days this winter.
Reporting by Scott DiSavino; Editing by Leslie Adler