New York votes to end gas hookup subsidies, shifting costs to homeowners

ALBANY, N.Y. (NEXSTAR) — New York State lawmakers voted Monday to end a long-standing policy that made all gas customers pay for new gas line connections. The Assembly passed A8888, already approved by the Senate last week with S8417, which is supposed to save current utility ratepayers some $200 million each year for new gas hookups.

The legislation now heads to Governor Kathy Hochul for her signature. If the bill becomes law, homeowners who want a new gas line would have to pay the full cost for material and installation themselves. Opponents estimate costs of up to $10,000 or even “tens of thousands of dollars,” per Mike Fazio, the Executive Director of the New York State Builders Association.

Such increasing costs do also reflect the general rise in construction expenses. Since 2020, construction material costs have faced major disruptions, with freight charges for materials like aggregates increasing by 15% between 2021 and 2023. The Consumer Price Index for construction materials also rose by over 8% in 2023. Overall, non-building infrastructure—which includes utility work—saw inflation at 17.3% in 2022 and 6.3% in 2023, dwarfing any historical average.

The bill repeals the “100-foot rule,” in place since 1981, which makes utilities provide gas service for free to new buildings within 100 feet of an existing line. That means that, currently, homeowners building a new home within 100 feet of an existing gas line didn’t directly pay the material or installation costs for their natural gas. All existing gas customers across the state share the cost of these new connections on their energy bills.

Data from New York utilities from 2017 to 2021 showed residential hookups, which the 100-foot rule subsidized, ranged anywhere from over $2,500 to just under $100,000. That’s per residential customer needing at least 100 feet of new gas pipelines, and as of 2023.

According to the bill’s supporters, it lowers energy bills for millions of New Yorkers. Senate sponsor Liz Krueger called ending the $200 million yearly subsidy a critical step for making energy more affordable.

Assembly sponsor Jo Anne Simon said the bill stops utility companies from getting a “blank check to expand polluting gas pipelines.” She said the change encourages people to connect to electric and heat pumps instead, which she said are “less expensive, more reliable, and better for our environment.”

Food and Water Watch New York State Director Laura Shindell pointed out that for years, New Yorkers had to pay for “fossil fuel expansion that pollutes our communities and drives up energy costs.”

And Jessica Azulay, Executive Director of the Alliance for a Green Economy, said this is only “the first step toward relieving New Yorkers of the burden of paying for unnecessary pipelines.”

Still, Assembly Speaker Carl Heastie explained that the bill doesn’t force anyone not to connect to local gas service lines nor prevent them from using fossil fuels. But detractors said the bill will increase housing costs and eliminate jobs. Assemblymember Phil Palmesano argued that it “doesn’t save people money or increase energy reliability.”

And Assemblymember Ari Brown called the bill a “rebranded assault on our energy grid, our economy, and our way of life.” Brown, Palmesano, and other Republicans said the bill represents another mistake borne out of the Climate Leadership and Community Protection Act, New York’s climate law, which they call unrealistic.

Palmesano said that eliminating the 100-foot rule pushes the state toward full electrification despite the state power grid’s inability to handle it. The New York Independent System Operator, which manages the state’s power grid, recently released a report showing grid reliability continues to decline.

Dan Ortega, Executive Director of New Yorkers for Affordable Energy, said the bill “will eliminate hundreds of good-paying union jobs in the gas sector.” He also resisted calling the current law a subsidy, saying the money “is recovered from the ratepayer over time.” Ortega warned that the bill “would add as much as $10,000 to home construction, hurting young families who are already struggling to afford a home.”

Fazio pointed to a March 2024 study by the National Association of Home Builders that found a $1,000 increase in a new home’s price can make 6,810 New York households unable to afford it. And Randy Wolken, president and CEO of the Manufacturers Association of Central New York, argued that the bill “will restrict access to reliable energy and cause uncertainty that will deter investment.”

Joe Peluso, vice president of IBEW Local 97, a union representing utility workers, said the bill is “a quiet layoff notice for thousands of New York’s utility workers.” He maintained that a cleaner future requires a plan that protects workers and offers retraining, not one that leads to “fewer hookups, fewer jobs, and fewer options for working people.”

The repeal of the 100-foot rule came from the broader NY HEAT Act, an energy bill that didn’t advance through the legislature. Opponents like Ortega have vowed to press Hochul for a veto.