A bill on Gov. Kathy Hochul’s desk would end subsidies for gas line extensions.
Assembly Bill 8888 would end the “100-foot rule” requiring utilities to connect new customers to a gas line for free, based on their distance to an existing gas main. Backers of the change said the rule has cost New York ratepayers around $1 billion.
Allison Considine, senior New York campaign manager for the Building Decarbonization Coalition, said while other states have ended such allowances, it was harder in New York, since the rule was written into state law.
“The Public Service Commission’s hands were tied as they’ve been making progress to try to save ratepayers money, control those overall rising delivery costs on everyone’s utility bills,” Considine explained. “They couldn’t do anything until the Legislature did something.”
Feedback on the bill has been positive, with some opposition from utility companies saying it will jeopardize their business by discouraging natural gas use. Considine called it is misinformation, since a person who wants to use gas for their home can still do so. The Legislature approved the bill, and it awaits Hochul’s signature.
Initially, the connection charges were seen as a way to evenly spread costs across a customer base with new ratepayers shouldering them in a way to benefit existing ratepayers.
Kristin George Bagdanov, senior policy research manager for the coalition, said with new climate laws reducing emissions and a stagnating customer base, it is no longer the case.
“A new customer joining today isn’t going to pay back what’s expected,” Bagdanov pointed out. “That creates a phenomenon called ‘cross-subsidization.’ in which existing customers are essentially giving that new customer a loan to join the system that’s not getting paid back to them.”
Currently, 11 states and Washington, D.C. are considering or have phased out the allowances. Doing so for at least eight states, including New York, would save ratepayers a collective $750 million in utility bills. New York would see the highest amount of savings, at $200 million a year.
Edwin is a reporter and producer in North Tonawanda, New York. He’s previously reported for the Niagara Gazette and the Ithaca Times. Edwin got an early start in radio interning for WBFO-88.7FM, NPR’s Buffalo affiliate. In 2018, he graduated from SUNY Buffalo State College with a B.A. in Journalism, and in 2022, graduated from Syracuse University with an M.S. in Communications.