Repeal of Gas Subsidy Seen as First Step Toward NY HEAT Act Goals

New York lawmakers are poised to eliminate subsidy known as the 100-foot rule — a long-standing policy that forced ratepayers to subsidize the cost of gas hookups for new residential and business customers.

NYS Assembly chambers - Wikipedia photo

Under current law, utilities extend gas lines to new buildings or homes within 100 feet of existing gas mains at no direct cost to the new customer. These costs are passed onto the remaining customer base through rate increases. According to state data, New Yorkers spend roughly $200 million annually to subsidize these expansions.

The Assembly voted Monday to repeal the subsidy--shifting financial responsibility for new gas hookups to developers and those seeking new connections, rather than being passed on to existing customers--advancing the measure to Governor Kathy Hochul’s desk,

Advocates for the change, including New York’s environmental community and consumer watchdogs, argue that repealing the rule is a necessary step toward modernizing energy policy and reducing ratepayer burdens. “There is no free lunch,” said Assemblymember Jo Anne Simon, referring to the fact that all customers ultimately foot the bill for these so‑called free hookups

Earlier proposals sought to go even further. The NY HEAT Act, recently rebranded as the Customer Savings and Reliability Act (CSRA), would not only eliminate the 100‑foot rule but also give utilities regional flexibility or allow them to opt out. It also includes exemptions for industrial, commercial, and critical infrastructure uses and requires majority approval from affected customers during system transitions

Sen. Liz Krueger and Assemblymember Simon, sponsors of the CSRA, say the legislation is designed to “deliver energy savings and reliability to New Yorkers” while slowing the buildout of leaky and costly gas pipelines

Critics, however, caution that removing the subsidy without broader reform could backfire. Citing increased costs for developers, potential job losses and grid reliability concerns, Republicans and business groups argued that fewer customers on the system could raise fixed costs for remaining users. “When you have more natural gas customers on the system, their revenue helps pay for fixed operation and capital costs,” said Assemblymember Phil Palmesano.

New Yorkers for Affordable Energy likewise contended the NY HEAT Act would “increase costs on customers and eliminate good paying union jobs”.

Assembly Speaker Carl Heastie called arguments against the repeal “misleading and riddled with fearmongering,” saying the repeal will “keep families from having to pay their hard-earned money to subsidize the cost of new gas hookups”.

State Sen. Krueger said repeal of the subsidy is “a critical step in delivering energy affordability,” but stressed that further work is needed. She added that Democrats will continue efforts in future sessions to curb investments in unnecessary gas infrastructure and promote modern alternatives .

"This bill doesn’t take away the ability to connect to gas, or force anyone to stop using gas in their homes. This is about saving New Yorkers money and eliminating roadblocks to sustainable energy," Heastie said.

The repeal’s next step is awaiting Gov. Hochul’s signature. If signed, the elimination of the 100‑foot rule will take effect Dec. 31, 2025.