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Cuomo Gives National Grid Two Weeks to Fix N.Y. Gas Shortage

Cuomo Gives National Grid 14 Days to Fix N.Y. Gas Shortage

(Bloomberg) -- New York Governor Andrew Cuomo gave National Grid Plc 14 days to figure out how to address natural gas shortages before he moves to revoke its license to operate in the state.

The Democrat said in a letter Tuesday that the utility owner’s moratorium for new gas hookups affecting 20,000 homes and businesses in Brooklyn, Queens and Long Island shows that it failed to provide “adequate and reliable” service.

“The ‘moratorium’ is either a fabricated device or a lack of competence,” Cuomo wrote. “The very lack of supply you now point to as the reason for your denial of service to thousands of customers exhibits your failure to plan for supply needs.”

The 14-day deadline is the latest salvo between the governor and National Grid. They’ve been feuding since New York rejected a $1 billion expansion to a Williams Cos. gas pipeline, which the company says is crucial to meet rising demand. In response, National Grid imposed a freeze on new gas hookups.

In a statement, the company said it will respond to the governor by the deadline. “We continue to work with all parties on these critical natural gas supply issues on behalf of all our customers in downstate New York,” National Grid said.

Shares dropped 0.4% to an intraday low of $11.36 before rebounding to $11.42 in London.

READ MORE: New York’s Cuomo Raises Idea of Revoking National Grid’s License

Last month, Cuomo issued an emergency order requiring National Grid to reconnect about 1,100 consumers. Still, the company has a backlog of about 2,600 applications for service on hold. They represent about 20,000 businesses, houses and apartments, according to the firm.

In his letter, Cuomo said National Grid was either “grossly negligent in relying exclusively on the speculative construction of a private pipeline” or “deliberately defrauded the people of the state.” He called on the company to come up with “meaningful and immediate remedial actions” by the deadline.

Meanwhile, Consolidated Edison, which has imposed a similar moratorium for gas hookups in Westchester County, north of New York City, says there’s plenty of gas for customers in the city.

ConEd CEO John McAvoy said he can meet demand for as long as five years, and the company won’t necessarily impose a moratorium on new hookups at the end of that period. However, the utility no longer sees the same growth opportunities in the gas transmission business as it did five years ago, and doesn’t expect to make additional significant investments.

--With assistance from Mark Chediak.

To contact the reporters on this story: Gerson Freitas Jr. in New York at gfreitasjr@bloomberg.net;Will Wade in New York at wwade4@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Pratish Narayanan, Steven Frank

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