Background

On July 16, 2024, the New York State Department of Public Service (DPS) issued a Staff Straw Proposal Regarding Modification of 16 NYCRR Part 230, (pertaining to the rights, requirements, and responsibilities of utilities and applicants for gas service,) in its Gas Planning Procedures proceedings. In the proposal, “Staff presents possible modifications to, and poses questions to stakeholders regarding, specific provisions of Part 230,” in hopes of better aligning the code with the GHG reduction targets set forth in the state’s climate law, the Climate Leadership and Community Protection Act.

Staff Proposals

Key proposals in the Staff Straw Proposal include:

• Defining "Appurtenant Facilities"
• Amending entitlements, specifically concerning the "100-foot rule"
• Amending section 230.3 to ensure applicants for gas service "pay for the actual cost incurred by the LDC for the materials and installation of the portion in excess of the entitlement"

Staff Technical Questions

The DPS staff seeks comments on several technical aspects, including:

• The impact of the proposed modifications on utilities’ revenues and expenses
• The potential effects on new customers
• The setting of gas depreciation rates
• Methodologies for calculating surcharges

Staff Additional Questions

Notably, the staff acknowledges that the proposed changed to Part 230 “may increase the upfront cost for gas service, which otherwise may be the least expensive heating source for new, low-income applicants” and seeks “input on how these changes can coincide with ongoing electrification programs to allow for prospective applicants for gas service to consider more environmentally sustainable energy sources.” Staff also seeks input on how these proposed changes may interact with the All Electric Buildings Act, and on planned but not yet constructed projects, including affordable housing.

Conclusion

This proposed policy is a significant change for New York State, which has historically used line extension policies like the 100-foot rule to ensure broader access to energy infrastructure. Staff itself acknowledges that the proposed changes may increase the cost of energy for applicants, including low-income applicants. This proposal comes despite New York having some of the highest energy prices in the country, and NYISO, the state’s grid operator, recently announcing a “Deficit in reliability margins for the New York City area beginning in summer 2025.” While these proposed changes may not have a significant impact on certain gas-constrained regions in the state, if enacted, this policy could significantly limit fuel choice for low- and moderate- income households in other, less constrained regions, potentially causing them to turn to more carbon-intensive delivered fuels.

You can find the entire proposal, which features 20 recommendations and areas where staff seeks comment, here. Stakeholder comments are being accepted until September 13, with reply comments requested by October 9. Comments may be submitted online at www.dps.ny.gov through the docket HERE. You can find the notice soliciting comments here.

For questions, reach out to Christian Rodrick at crodrick@northeastgas.org