New York Utility Company Seeks Proposals to Electrify Buildings Instead of Building More Gas Pipelines

Foley Hoag LLP - Energy and Cleantech Counsel
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Foley Hoag LLP - Energy and Cleantech Counsel

On July 12, 2021, in a landmark utility effort to electrify New York City’s building stock, Consolidated Edison (Con Ed) issued a request for proposals (RFP) for non-pipeline solutions (NPS). NPSs avoid the need for investment in pipelines and traditional distribution system infrastructure by meeting on-system natural gas demand with alternative solutions like energy efficiency and heat pumps. Con Ed’s RFP seeks customer-sited load relief solutions that enable the abandonment of leak-prone pipes through full building electrification while maintaining system reliability. Such solutions must eliminate the need for customer connections to gas distribution infrastructure. Successful proposals must evidence how all customers on the main segment will convert from gas equipment and appliances. Proposals are due by 3 pm on August 31, 2021.

The RFP is an implementation vehicle for the utility’s Main Replacement Program. Through the program, Con Ed has committed to replace leak-prone gas mains and services in its distribution infrastructure by 2038 with a goal of replacing the entire inventory of cast iron and unprotected steel gas mains in the next 20 years. The Public Service Commission (PSC)  approved the implementation of Con Ed’s NPS portfolio in 2019 following challenges faced by the utility in contracting for new peak-period pipeline capacity, which ultimately contributed to the imposition of a temporary moratorium on new firm gas customers in parts of Con Ed’s service territory in the winter of 2019.

New York’s Climate Action Council (CAC) is evaluating additional regulatory and legislative strategies to spur the gas system transition. The Energy Efficiency and Housing Advisory Panel recommended that the CAC advance a “managed, phased, and just transition from reliance on fossil gas and the gas distribution system to a clean energy system,” but identified that the utilities’ obligation to provide gas service to buildings located within an established distance from existing gas mains is a barrier to building electrification. If the CAC recommends state agency actions to mitigate these challenges in its Draft Scoping Plan due by the end of the year, such actions would build off the utility planning process already underway in the PSC’s gas planning proceeding (Case 20-G-0131). As former Chair of the PSC, John Rhodes, stated when the proceeding opened,

A comprehensive gas planning process is essential for protecting New Yorkers and ensuring they have the natural gas infrastructure they need and minimizing what they don’t. It’s critical to ensuring reliability, keeping costs down, and advancing State clean-energy policies while combating climate change.

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