NY Budget Would Force Some Gas Stations To Wire Up for Generators
Wednesday, March 27, 2013
About 1,450 gas stations in and around New York City will be required to be wired to run on back-up generator power under the state budget expected to be passed Thursday.
The proposal is the first step by the Cuomo administration to prevent another gas crisis like the one after Sandy when some frustrated drivers were forced to wait three, five, even eight hours to fill up their tanks.
"It's an appropriate response," said John Kilduff, an oil industry analyst with Again Capital. "During the crisis, it came down to power, power, power, in terms of getting the gas pumps turned on."
At the peak of the power outages after Sandy, only 35 percent of gas stations in the metro area had electricity, according to AAA, and few of them were equipped with generators.
Under the plan, stations within a half-mile of highway exits and hurricane evacuation routes in New York City, Long Island and Westchester and Rockland Counties will have to install a transfer switch that will allow them to connect to a generator.
Branded chains with more than 10 stations in the area like Shell and BP will have to wire extra locations. Small stations — those that pump fewer than 75,000 gallons a month — can apply for an exemption.
"We think this will be a step forward for disaster preparedness," said Jim Calvin, president of the New York Association of Convenience Stores, which represents 1,600 shops and service stations across the state.
New York will give out grants of up to $10,000 to cover the cost of the wiring and up to $13,000 if a station owner chooses to purchase a generator.
Station owners will not be required to buy generators, which can cost upwards of $40,000. Instead, they will have access to a so-called "generator pool" that will be set up so stations can lease or rent a generator in the case of an emergency.
In addition to the back-up power proposal, the Cuomo administration has called for other measures, including a Strategic Fuel Reserve for New York State, more pumping stations along the Buckeye Pipeline and an assessment of storm hardening measures at fuel delivery terminals.
The scores of terminals that line New York Harbor are one of the most vulnerable links in the region's gasoline supply chain, according to leaders in the oil and gas industry. Many flooded during Sandy and were forced to shut down for days or even weeks.
Ralph Bombardiere, executive director of the New York State Association of Service Stations and Repair Shops, said he wished the Cuomo administration would have addressed the problems at terminals before taking on the power problems at stations.
He also stressed that another Sandy-size storm will cause problems unless there are fixes at stations, terminals, pipelines and refineries.
"In the end, with another storm like Sandy, we're going to have the same problems, generators or no generators," he said.
The governor's office said it has been working on the additional fixes throughout the gasoline network, and that starting with stations made sense.
"None of the supply chain can work if at the end of the day the gas stations can't pump gas," a Cuomo administration official said.