Residents of New York will bear the financial burden of a new pipeline project backed by the federal government, which is projected to exceed initial cost estimates by at least 17%. An independent report reveals that the financial implications of this project will significantly impact utility bills for New Yorkers who are already facing high energy costs.
The pipeline, initially proposed in 2017 and previously deemed a potential environmental threat, was revived in July 2023 following strong support from the Trump administration for fossil fuel infrastructure. The Department of Environmental Conservation has fast-tracked its review, recently concluding a 45-day public comment period. This decision came despite protests demanding extended opportunities for public input and additional hearings.
Supporters of the pipeline argue that it will provide more natural gas to the region, ultimately reducing energy expenses and creating jobs. However, the financial burden of construction and infrastructure will largely fall on New Yorkers, who are grappling with rising utility bills. Estimates from National Grid indicate that residential bills could rise by an average of $7.44 on Long Island and $7.61 in Brooklyn, Staten Island, and parts of Queens. This increase comes alongside a pending rate hike that could add $26.69, or over 13%, to the average monthly Con Edison bill.
The rising costs are compounded by the fact that Con Edison customers already pay nearly $50 more per month than they did three years ago, while National Grid customers have experienced an increase of over $40 in the same timeframe. Rate adjustments in New York are typically overseen by the state’s Public Service Commission, but because of the pipeline’s interstate nature, approval rests with the Federal Energy Regulatory Commission.
A report from the Institute for Energy Economics and Financial Analysis, released this week, estimates the pipeline’s total cost at around $1.25 billion, marking a notable increase from National Grid’s projections. The report suggests that the anticipated benefits of the pipeline may not be realized. According to Suzanne Mattei, the report’s author and an energy policy analyst, “The arguments that they’re trying to come up with now are not convincing, and rate payers in New York are not going to benefit from this, but they’ll be forced to pay for it if this thing were approved.”
The pipeline is being developed by Williams Company along with local gas provider National Grid. They contend that the project will enhance winter gas supply reliability, providing an estimated 13% more natural gas to the area. Williams claims that the increased supply could lead to a $6 billion reduction in gas prices over the next 15 years, as well as job creation in the Northeast.
The proposed infrastructure involves about 17 miles of 26-inch diameter pipes running beneath the ocean floor near Staten Island and the Rockaways, with an additional 10 miles in New Jersey. This pipeline aims to transport fracked gas from Pennsylvania, potentially servicing over 2 million households in New York City.
Despite claims of job creation, the report indicates that only 9% of the temporary construction jobs will be located in New York due to the specialized skills required for offshore pipeline installation. The compressor stations necessary for the operation will be based in New Jersey, suggesting that permanent job opportunities may not benefit New Yorkers.
National Grid maintains that the pipeline is essential for meeting winter heating demands. In a statement, Alexander Starr, a spokesperson for National Grid, asserted, “NESE will bolster reliability for our customers’ essential energy needs, while also lowering costs and reducing emissions.” He pointed to the Federal Regulatory Energy Commission’s confirmation of the project’s critical need and public benefits.
Nonetheless, the report challenges National Grid’s justification for the pipeline, stating it lacks support from available data. State laws prioritize the reduction of natural gas usage rather than its expansion. Last winter, peak demand days were remarkably low, even during colder-than-expected conditions. Furthermore, upcoming renewable energy projects, such as the Champlain Hudson Power Express, are set to provide significant energy sources for New York City, with the potential to power over 3 million homes.
On March 15, 2024, advocates and local officials delivered the report to Governor Kathy Hochul, urging her to reject the pipeline and to accelerate investments in renewable energy. Ken Lovett, Hochul’s senior communications adviser for energy and environment, stated, “The Governor has made it clear that all proposed projects must be reviewed impartially by the required agencies to determine compliance with state and federal laws.”
As this contentious pipeline project moves forward, public sentiment remains mixed, with strong opposition rooted in environmental concerns and economic implications. The pipeline’s journey from proposal to potential approval exemplifies the ongoing debate over energy infrastructure in New York and beyond.
