Monday 25 November 2019 4:58 pm

National Grid pays $35m penalty but avoids losing New York license

National Grid has reached an agreement with New York state to end its supply moratorium for customers in Brooklyn, Queens and Long Island, a day before governor Andrew Cuomo’s deadline to do so.

The company will also make $7m (£5.4m) available to assist customers affected by the moratorium, as well as committing $28m more for investment in demand response and clean energy projects.

Read more: National Grid and SSE shift to overseas ownership to counter Labour nationalisation plans

On 12 November the governor sent National Grid a letter threatening to revoke the firm’s operating license if it had not resolved issues with gas supply within two weeks.

Cuomo said that the energy supplier had failed to provide “adequate and reliable service.”

In a statement, National Grid said it would proceed to connect those customer applications put on hold due to the moratorium and start processing all new applications.

The agreement, which will last for two years, also commits National Grid to present options to meet New York’s long-term gas supply needs within three months.

Following a consultation process final options will be agreed with the state of New York by June 2020.

The agreement confirms that the matter of the revoking of the company’s license has now been resolved.

Governor Cuomo tweeted that “this agreement is a victory for customers.”

Yesterday National Grid confirmed that it had moved ownership of the company offshore to new holding companies in Luxembourg and Hong Kong as a precaution against Labour’s sweeping nationalisation plans.

A spokesperson for the company said:

“Labour’s proposals for state ownership of National Grid would be highly detrimental to millions of ordinary people who either hold shares in the company or through their pension funds – which include several local authority pension funds.

Read more: National Grid beats half year expectations amid New York dispute

“To protect their holdings, and in line with our legal fiduciary duty to our shareholders, we have established holding companies in Luxembourg and Hong Kong. 

“This has no financial benefit to the company and does not affect its day to day operations. It is solely to protect our shareholders’ interests.”

Shares in National Grid rose nearly 1.5 per cent today.