Eliminating an Unfair Utility Subsidy

Governor Kathy Hochul today signed legislation to eliminate the “100-foot-rule” for new natural gas hookups that costs New Yorkers hundreds of millions of dollars a year.

“It’s simply unfair, especially when so many people are struggling right now, to expect existing utility ratepayers to foot the bill for a gas hookup at a brand new house that is not their own,” Governor Hochul said. “I have made affordability a top priority and doing away with this 40-year-old subsidy that has outlived its purpose will help with that.”

Each year, New Yorkers spend hundreds of millions of dollars on connecting new homes to the gas system. Currently, all existing ratepayers of a utility subsidize the first 100 feet of new gas lines. Under legislation S.8417/A.8888 signed by Governor Hochul, new applicants must pay 100 percent of the material and installation costs for gas service, as opposed to other ratepayers.

State Senator Liz Krueger said, “Kathy Hochul just gave New Yorkers a $600 million Christmas present by signing our bill to repeal the 100-foot rule. This is a massive win for New York’s gas customers, and for clean air and a livable climate. In recent years the 100-ft rule has forced all ratepayers to subsidize gas hookups for new customers and a tidy profit for utility shareholders, at a cost of $600 million every year, which compounds many times as it is paid off on gas bills for years down the road. That burden on New Yorkers will now be lifted.”

Assemblymember Jo Anne Simon said, “This is a victory for hard-working New Yorkers, our wallets, and our climate. Utility companies have had a blank check to expand polluting gas infrastructure and pass those costs along to consumers through higher monthly bills. Repealing the outdated 100-foot rule ends this subsidy to the gas industry, saves consumers money, and promotes the transition to greener, more affordable energy. I'm so thankful to Governor Hochul for signing this bill into law and Senator Krueger and the advocates for their partnership in delivering nearly $600 million a year in financial relief to New Yorkers.”

The new law, which takes effect in 12 months and only applies to residential buildings, does not prohibit new gas hookups. Utilities still have a legal “obligation to service,” but the law shifts the costs of natural gas hookups to the applicants rather than pass them on to the rest of the utility’s ratepayers.

New York joins five other states, including California, Massachusetts, Colorado, Maryland and Oregon, that have removed similar ratepayer subsidies.

The Governor continues to be a national climate and clean energy leader while also prioritizing affordable and practicable solutions. The new law promotes the State’s transition to clean energy by leveling the playing field for clean energy alternatives and is part of the Governor's Hochul's affordability agenda.

During the recent 43-day federal government shutdown when $400 million in federal heating assistance funding was withheld, impacting 1.5 million New Yorkers, the Governor urged eligible New Yorkers to make sure they enrolled in the State Energy Affordability Program (EAP) that provides bill discounts. Three thousand New Yorkers applied or were enrolled in the EAP within two weeks of the Governor’s call to action.

Since taking office, the Governor has delivered more than $5.5 billion relief for New York’s hard-working families, including supplemental payments, tax relief and rebates for homeowners, tuition assistance for students, heating and cooling assistance for seniors and low-income New Yorkers, as well as expanded access to child care assistance and paid leave for families and pregnant women.

The current state budget includes:

• Middle-Class Tax Cut: Approximately 8.3 million New Yorkers will benefit from decreased tax rates, bringing middle-class taxes to their lowest levels in 70 years.
• Child Tax Credit Expansion: The Child Tax Credit will increase up to $1,000 per child under the age of four and up to $500 for school-aged children, starting in 2026.
• Inflation Refund Checks: Eligible New Yorkers are receiving up to $200 per person or $400 per family, reaching 8.2 million people.
• Free School Meals: All K-12 students will have access to free breakfast and lunch, saving families up to $1,600 per child annually.