Iroquois Gas Transmission LP’s natural gas compression upgrade project, designed to supply New York City with an additional 125 MMcf/d, may be delayed as it awaits required air permits from state agencies, according to Iroquois management.
Iroquois in 2020 filed applications for two Air State Facility permits with the New York Department of Environmental Conservation (DEC). The permits would allow the company to add 24,000 hp of compression and associated facilities at the existing Dover and Athens stations as part of an Enhancement by Compression (ExC) project.
DEC has “not yet made a final determination regarding the project’s consistency with Section 7 of the Climate Leadership and Community Protection Act (Climate Act),” a spokesperson told NGI. The law requires that DEC ensure permitting projects do not violate greenhouse gas emission limits nor disproportionately affect a disadvantaged community.
DEC has completed its review and is evaluating the 2,000-plus public comments it received earlier this year.
As first reported by Politico, a letter sent in mid-June by Iroquois Pipeline Operating Co. President Jeff Bruner urged the permits be approved by July 1. Bruner said Iroquois still needed permits from Connecticut regulators, which were awaiting DEC’s decision.
Iroquois also is seeking to upgrade its Brookfield, CT, compression station and add 24,000 hp. In addition, Iroquois indicated in its filing to the DEC that it was planning to install emission reduction technology at all of the compressor stations, which could reduce carbon monoxide produced by the compressors’ gas turbines by up to 90% and methane emissions by about 70% from current levels.
FERC in 2021 issued a final environmental impact statement and in early 2022 provided Iroquois a certificate of public convenience and necessity for the ExC project.
The Federal Energy Regulatory Commission noted that state or local permits had to be “consistent with the conditions” set by the Commission. However, “this does not mean that state and local agencies…may prohibit or unreasonably delay the construction or operation of facilities.”
Natural Gas Supply Impact
ExC was launched in 2019 after the Big Apple’s largest natural gas and electric utility, Consolidated Edison Co. of New York Inc. (ConEd) and Iroquois agreed to boost incremental natural gas capacity to the Bronx, Manhattan and Queens. National Grid’s KeySpan East Gas Corp. in 2019 also signed on to receive half of the added gas capacity to serve Long Island and Queens.
The upgrades would be along Iroquois’ existing natural gas pipeline, which flows across more than 343 miles of New York and about 70 miles of Connecticut. Iroquois had expected to begin construction in the spring, with completion by November 2025.
According to Bruner, ConEd and KeySpan are forecasting peak day gas demand growth because of natural gas conversions, new construction and revitalization projects – despite the city’s ban on gas service connections to newly constructed buildings.
ConEd and KeySpan Gas during Winter Storm Elliott in December 2022 requested that metropolitan area customers reduce natural gas consumption because of pipeline disruptions.
However, ConEd noted in its Gas System Long-Term Plan released at the end of May that given the permitting delays, “the companies do not expect it to enter service prior to November 2025.”
ConEd attorney Blake Urban wrote to DEC in a February letter obtained by NGI that the utility had “experienced an increase in customer demand for natural gas, largely driven by local New York City laws mandating that buildings using heavier heating oils convert to cleaner-burning fuels, without a corresponding increase in interstate pipeline capacity.”
While ConEd has pursued alternatives to reduce natural gas demand, “the firm interstate natural gas pipeline capacity currently available into the New York metro region is extremely limited,” Urban noted.
National Grid’s James Holodak, vice president for Energy Procurement, noted similar concerns in a separate letter to DEC obtained by NGI.
If the DEC “denies the air permits for the ExC project, it may already be too late to develop a new gas infrastructure solution in time to address the projected supply-demand gap that National Grid expected to arise by Winter 2026/27,” Holodak said.
Reiterating Reliability Risks
The project’s delays come as the New York Independent System Operator (NYISO) has warned that decommissioning coal-, natural gas- and oil-fired peaker plants may put electricity generation reliability in jeopardy.
The New York Power Authority (NYPA) is planning to retire fossil fuel peaker plants by 2030. Natural gas fuels five of the state’s 10 largest power plants by capacity and accounts for almost three-fifths of New York’s power generation, according to the U.S. Energy Information Administration.
As of May, about 1,027 MW of peaking generation has been retired, according to NYISO’s second quarter 2023 Short-Term Assessment of Reliability (STAR).
The Big Apple may be deficient by up to 446 MW for about nine hours on the peak day during expected weather conditions beginning as soon as 2025, according to the grid operator. Peak day situations could worsen during a heatwave.
With an additional 590 MW of peaker plants set for retirement in 2025, as well as increased demand for electricity because of the electrification of buildings, vehicles and appliances, according to NYISO, “the bulk power transmission system will not be able to securely and reliably serve the forecasted demand in New York City,” according to the STAR.
This marked the third time NYISO identified reliability risks in two years. The grid operator said it would be working with utilities to identify solutions.
