New York Eliminates Natural Gas Extension Subsidies

Under New York State’s “100-foot-rule,” natural gas utilities have long shifted the costs of new natural gas hookups to existing ratepayers, as opposed to the customers seeking utility service. Currently, the first 100 feet of a new service line from a gas main is free for customers connecting to the system. Natural gas utilities, of course, don’t just eat these connection costs. Instead, they increase rates on incumbent customers to pay for their system expansion.

Last week, Governor Hochul signed S.8417, which eliminates the state’s 100-foot-rule for new natural gas hookups, into law.

Going forward, new residential customers seeking service from investor- and municipally-owned natural gas companies will be required to bear all costs to connect to the system. The law will go into effect in 12 months. New York’s updated line extension policy promotes fairness to existing utility customers, as well as competing energy sources, like propane.

NPGA opposes the subsidized and uneconomic expansion of natural gas distribution systems. These subsidies are anticompetitive and distort the energy marketplace in which propane marketers must compete for business.

According to the 2024 sales report, New York is the third largest state propane market in the country, with 430 million gallons sold. For more information, contact NPGA’s Senior Director of State Advocacy & Affairs, Jacob Peterson.