National Grid’s “Long-Term Capacity Report” Misses the Mark

Update 5/12/20: Despite National Grid’s release last week of their Downstate NY Long-Term Natural Gas Capacity Supplemental Report, where updated modeling shows an almost 17% smaller “gap” between gas supply and demand in 2035 than their initial report, the utility continues to favor investment in infrastructure that will lock us in to dirty fossil fuels for decades.

Instead, we know this uncertainty underscores that the only way forward should be clean, flexible, scalable solutions that support our clean energy and climate goals, and bring myriad additional benefits to the residents and businesses of New York.

In February, National Grid released its “Natural Gas Long-term Capacity Report” for Brooklyn, Queens, Staten Island and Long Island, for which there have now been extensive public comments submitted through virtual public meetings, and in the proceeding in front of the Public Service Commission (PSC), New York’s utility regulator.

NRDC and our friends at the Sallan Foundation, the Alliance for Clean Energy New York, Sierra Club, Surfrider Foundation, NYC Chapter, 350 Brooklyn, Clean Ocean Action, and New Yorkers for Clean Power, filed joint comments highlighting deficiencies in National Grid’s report, and emphasizing that non-infrastructure solutions are the only real solutions that will deliver New York’s clean energy future, instead of more fossil fuel use that dirties our air and exacerbates the climate crisis.  

Here’s an overview of our comments:

First, the report did not accurately account for the level of energy efficiency investment that the PSC ordered this past January; it modeled annual savings of 0.8% of gas sales as a baseline, rather than the 1.3% mandated by the PSC. As a result, the projected associated costs of non-infrastructure solutions (i.e., efficiency and electrification of heating with heat pumps) are too high. At a minimum, the report’s evaluation of non‐pipeline options should be based on the PSC’s mandated 1.3% annual gas savings by 2025 target, with a reasonable escalation in annual savings post‐2025 to reflect improved program development, increased market penetration of heat pumps, and technological innovation. To assume that none of this will happen post‐2025 is unreasonable and not supported by fact.

We know that we’re going to have to ramp up our efforts to transform our buildings; in fact, the PSC has an Interim Review process for 2022 mandated in its January order, to review and increase targets to capture all cost-effective efficiency potential. For these and other reasons discussed in multiple filings by other groups, National Grid’s forecast also overstates demand for fossil gas, predicting a future supply gap that is highly unlikely to ever materialize.  

Second, the report also did not include the costs of carbon that would be avoided through non-infrastructure solutions. Pursuant to New York’s nation-leading 2019 climate law, the Climate Leadership and Community Protection Act (CLCPA), we have to reduce carbon to net zero by 2050; by overlooking the value of reducing carbon, the report’s cost comparisons of infrastructure and non-infrastructure solutions are flawed and lead to invalid conclusions that are inconsistent with the goals of the CLCPA.

Third, the independent monitor appointed as part of the PSC’s settlement with National Grid in this proceeding also filed its Second Quarterly Report last week, recommending a closer look at the report’s demand forecast and assumptions and specifically urging greater public outreach (p.2):

1) Further to Recommendation 1 in the First Quarterly Report that National Grid provide greater clarity to the public on the options presented in the LT Report, National Grid’s Supplemental LT Report should specifically address concerns raised by the public regarding the integrity and accuracy of National Grid’s demand forecast, including at a minimum:

 (a) whether climate change and/or other factors may affect the suitability of the current Design Day standard relied upon in the LT report (which Recommendation 3 of the First Quarterly Report suggests be reconsidered in conjunction with a review of National Grid’s planning personnel and tools);
[...]
 (c) whether third-party analysis cited by the public to National Grid offers a reasonable basis to revisit National Grid’s forecast or assumptions in the LT Report.

And finally, in a victory for improved gas utility planning more broadly, the PSC recently issued an Order establishing a Proceeding on Motion of the Commission in regard to Gas Planning Procedures, calling for more transparent and comprehensive, integrated gas supply planning for all gas utilities in New York state. Most importantly in this Order, the PSC stated that natural gas supply “planning must be conducted in a manner consistent with the recently enacted Climate Leadership and Community Protection Act (CLCPA).” The Commission also emphasized its intent “to establish planning and operational practices that best support customer needs and emissions objectives while minimizing infrastructure investments …”(pp. 2-3).  National Grid’s report uses faulty assumptions that not only result in unsupported conclusions, but are also contrary to the mandates included in the CLCPA and the directives set forth in the Order.

As we celebrate the 50^th anniversary of Earth Day this week, and reflect on the decades of untiring advocacy, it’s clear that New York’s climate and environmental progress has grown leaps and bounds from the days of soot-laden windowsills. But now is not the time to rest on our laurels – we should instead turbocharge New York’s clean energy future, replete with energy efficiency and electrification projects, and turn the dial down on fossil fuel use that disrupts the environment and jeopardizes public health. At the very least, the PSC should reject National Grid’s report and direct the utility to make it consistent with the state’s nation-leading energy efficiency and climate goals. Doing so would further illuminate the reality that non-infrastructure solutions are the sole way to deliver New York’s clean energy future.