As NY climate mandates loom, lawmakers push cost for new gas hookups onto property owners

Reforms passed by state lawmakers Monday would force New York property owners to pay for new natural gas hookups to their buildings, ending a decadeslong practice that’s forced utility customers to cover the cost of the work.

The legislation, which still requires the governor's approval, nixes a requirement for utility companies or municipalities to pay for the construction and maintenance of new gas connections to properties that are within 100 feet of existing pipelines. Advocates for the proposal estimate utility ratepayers subsidize roughly $200 million a year for those projects statewide.

The rule changes passed Monday represent a watered-down version of the NY Heat Act that’s failed to pass in Albany for years. Earlier versions of the bill would have also capped utility rates statewide and eliminated a rule that prohibits utility companies from denying new gas connections to any property owner who requests one.

Still, advocates said the version of the law helps the state comply with its already existing climate law, which is slated to begin banning new natural gas hookups next year, forcing new buildings to rely solely on electricity.

”Ending the 100-foot rule subsidy is like cutting a toe off Goliath,” said Liz Moran, New York policy advocate for Earth Justice. “It's a step forward and there should be no issue with ending the subsidy to put money back in ratepayers' wallets.”

The advocacy group Alliance for Green Economy estimated the changes would result in big savings for utility customers. An analysis from the group found that in the city alone, Con Edison customers would save $72 million a year as a result of the change, while National Grid customers would save $27 million annually. And those estimates only represent the upfront costs of construction for new gas hookups, and do not include other costs passed onto bill payers like property taxes, decommissioning costs or maintenance.

“National Grid is committed to building a safe, reliable energy system that achieves the state’s decarbonization goals while ensuring that we can continue to meet New York’s growing demand for energy,” National Grid spokesperson Alexander Starr wrote in a statement.

Eliminating the 100-foot rule doesn’t mean new homes can’t have gas. The bill simply shifts the cost off consumers and onto building developers. Advocates said the goal is to disincentivize new gas hookups for developers and to encourage developers and homeowners building new properties to instead install electric heat pumps, which don’t require expansion of the gas system.

“This bill is exclusively saying we’re going to create an even playing field. This is the move in the right direction for our environmental agenda,” said Assemblymember Anna Kelles, an upstate Democrat. “It will be for affordability and sustainability.”

The bill's opponents argued it would burden low-income New Yorkers building new homes who would have to cover the cost of their own gas hookups.

“We are talking about affordability here. We’re making New York less affordable,” said Assemblymember Jodi Giglio, a Long Island Republican. “It’s preposterous to ask neighbors to pay for electric hookups and not gas hookups. New Yorkers’ choices are being taken away from them.”

Assemblymember Jo Anne Simon, a Brooklyn Democrat who sponsored the bill, argued it was unfair for entire communities to pay for new gas hookups. She said the legislation passed was a small step towards helping the state move away from fossil fuels.

“We shouldn’t pay for the guy next door’s connection; he should pay for it himself,” Simon said. "You don’t have to choose gas, you can choose electric.”

A spokesperson for Gov. Kathy Hochul said she is reviewing the legislation. She has until the end of the year to either veto or pass the measure.

Starting next year, all new buildings with seven or fewer stories must be all-electric. In 2028, new buildings over seven stories must be all-electric.