If you live in Brooklyn, Buffalo, or Long Beach, you might have heard it lately: the clatter of jackhammers as utility workers replace gas lines under the street. The process can drag on for months, as workers dig up roads and sidewalks and drill into homes to swap out aging metal pipes for new, plastic ones.
In a state with one of the oldest natural gas networks in the country, replacing “leak-prone” pipes — steel or iron gas mains sometimes more than 100 years old — is a colossal task. And it’s not cheap: For most of the state’s major gas utilities, replacing these rusty pipes is the single biggest item driving infrastructure spending. Con Edison alone aims to spend close to $600 million a year over the next three years on this effort — one of the many expenses behind its current request to state regulators for double-digit rate hikes. (ConEd spokesperson Jamie McShane said the spending was necessary to maintain “public safety and world class reliable service,” as well as reduce greenhouse gas emissions from the leaky pipes.)
Altogether, the eight major utilities serving gas in New York spent $2 billion in 2022 and 2023 to replace gas mains, according to a new research brief by the consulting firm Synapse Energy Economics for the environmental group Natural Resources Defense Council. They spent another $400 million connecting new customers to the gas system. The utilities plan to charge customers for that new fossil fuel infrastructure for decades to come, even though the state has committed to largely phasing out fossil fuel use by 2050.
And that’s just the tip of the iceberg. Over the coming decades, while New York is legally required to decarbonize nearly its entire economy, utilities are planning to sink tens of billions more dollars into replacing old gas mains, according to a new study by the climate think tank Switchbox. That’s despite the fact that, in some cases, it would be cheaper to remove them and install cleaner alternatives for every customer they serve.
“This is a very disappointing waste of money that we’re seeing here,” said Jessica Azulay, program director of the climate group Alliance for a Green Economy.
Currently, though, state policies don’t leave utilities with many options. The companies are required by law to serve gas to customers who want it, and regulators have tasked them with eliminating leak-prone pipes as quickly as possible. A bill known as the NY HEAT Act, currently being debated in the state legislature, aims to make it easier for them to remove rather than replace them, instead switching customers to all-electric alternatives.
There are limits to this approach. Removing a gas main in a dense urban area, for example, could cut off other nearby customers. But Switchbox found that it should be feasible in about one-third of cases — and, more often than not, it would be cheaper in those cases to upgrade every single home to new electric systems than to replace the gas line.
That estimate reflects the total cost of going electric, including grid upgrades, new appliances for each home, and weatherization where needed. Altogether, the all-electric route could save customers nearly $5 billion by 2050, the study finds.
Juan-Pablo Velez, Switchbox’s executive director, says that the group’s analysis necessarily involves some “fuzziness” because of the limited amount of data utilities are required to disclose, but stresses that the group was “super conservative” in its assumptions.
“This is the lowest ambition-version of this strategy, and even so … you end up electrifying 300,000 households and solving the problem for less money,” Velez said.
Aging gas mains are a problem that cannot simply be ignored. As old metal pipes are exposed to the elements, they rust, crack, and leak, creating possible safety hazards and releasing climate-heating methane into the air. Utilities have made it a priority to replace them.
And they say they have little choice. Under state law, utilities have an “obligation to serve” gas safely and reliably to every customer who wants it. If the old pipes are no longer up to the task, they need to be either repaired or replaced, as long as customers still want gas.
But critics argue that instead of simply replacing the pipes, utilities could be doing more to steer customers toward greener alternatives. The Public Service Commission, New York’s utility regulator, has sought to promote “non-pipe alternatives,” like home electrification, to avoid the costly infrastructure investments that utilities tend to favor. And utilities say they’re on board.
As early as 2019, National Grid agreed to study alternatives every time it was planning a gas network upgrade. To date, it has pursued next to none. A study it published with the clean energy group RMI last spring highlighted just one successful project upstate, where it moved three customers from gas to geothermal heating. Other attempts have floundered, largely because the current law means that every single affected customer has to agree to participate, and the company couldn’t get that buy-in.
“Individual customer persuasion … is not a scalable approach,” the study concluded. Opening up more alternatives requires changing the law.
That’s the target of the bill that’s now dominating climate debates in Albany for the third year in a row: the NY HEAT Act. The bill would scrap utilities’ blanket obligation to serve gas, allowing them to undertake street- or neighborhood-level electrification projects without unanimous agreement from customers.
Under the latest version of the bill, no customer could be cut off from gas service without their consent before 2030. Proponents frame it as a way to pursue a managed transition away from gas, avoiding what they call the “death spiral” of utilities sinking ever more money into a system that fewer people are using.
“The bills are too damn high already,” said Velez, of Switchbox. “We are en route to them entering the death spiral. And ultimately, [replacing leak-prone pipes] is just adding fuel to that fire.”
Just how expensive would it be to replace New York’s thousands of miles of leak-prone pipes? Switchbox estimates the total cost to be between $34 billion and $65 billion by 2050.
That’s on par with nearly all of the spending that the state has approved for clean energy programs — roughly $44 billion to be collected from New Yorkers’ utility bills over the coming decades, according to a state tally from 2022. (An updated version is due any day now.) The amount that gas utilities have lately spent replacing pipes and connecting new customers — $2.4 billion over two years, by Synapse’s count — almost exactly matches the amount they collected for climate-related programs ($1.2 billion in 2022).
That spending comes even as gas demand is dwindling. The amount of gas used by New York homes and businesses — excluding power plants and industry — peaked in 2018 and has since dropped by 15 percent, according to federal data.
That means utilities are spending more to deliver less gas — and because they typically pass on maintenance and upgrade costs in bills, customers are paying more for it. Already, Switchbox estimates that New York utilities are charging their customers an average of $4.3 million for every mile of pipe they replace. As more people weatherize their homes and convert to electric appliances, the cost of building and maintaining new pipes will be spread among fewer and fewer customers, and rates will only continue to climb.
More areas will become cheaper to electrify over time. And even when it’s more expensive, advocates say, other benefits might make it worthwhile.
“If you dig up the street and replace a bunch of pipe, yes, customers still get to use the gas system … but customers didn’t really notice any difference,” said Christopher Casey, utility regulatory director at the Natural Resources Defense Council. “If you take that same money and electrify all the customers, all of a sudden you bought people new heating equipment and cooling.”
In the scenario that climate groups envision, residents would get to own the heat pumps and keep most of the energy bill savings that come with them, although the state allows utilities to recoup a portion of those savings.
“It makes sense on just a utility bill basis,” continued Casey. “But if you start thinking about the social value and the value to New Yorkers versus the value to the shareholders of the utility — I mean, it is so obvious that there’s so much more value in this.”