13th Nov 2019 12:24
(Alliance News) - New York State Governor Andrew Cuomo in a letter on Tuesday threatened to revoke National Grid PLC's licence unless it ends a moratorium on gas connections in New York City.
As well as electricity and gas transmission and supply assets in the UK, National Grid also has over 20 million customers in the north-eastern US.
London-headquartered National Grid has been trying to build a gas pipeline in New York State, but this was blocked by New York regulators earlier this year. This led the FTSE 100 utility to refuse to provide further gas services.
Cuomo said National Grid has "mishandled" gas supply in Long Island and New York City, as shown by the moratorium, and said the company has failed to provide an adequate service.
Cuomo told National Grid: "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.
"Your fundamental legal obligation as mandated by your certificate of operation was to plan and provide for future needs. You failed by your own admission."
Cuomo called the pipeline "speculative" and "risky", and said National Grid was irresponsible for hinging future supply on such a project.
"There are only two theories to explain National Grid's actions. Either National Grid was grossly negligent in relying exclusively on the speculative construction of a private pipeline to meet the demand that it was statutorily required to provide; or National Grid deliberately defrauded the people of the state by not developing or pursuing supply options to force approval and reliance on a private pipeline to further their business interests at the cost of the consumer," the governor said.
Cuomo gave National Grid 14 days to respond and to present "meaningful and immediate remedial actions".
Shares were 0.3% lower in London on Wednesday at a price of 885.00 pence each.
By George Collard; [email protected]
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