Tag Archives: boiler

Coop Village challenges $380,000 penalty for unauthorized use of gas

A $380,000 penalty from Con Ed earlier this year is being challenged by Coop Village management with the NYS Public Service Commission, the agency tasked with regulating public utilities. The penalty was the result of a boiler room incident on January 8, 2015 that led the coop to use natural gas for heat and hot water during two days when it was required by Con Ed to burn oil instead. General manager Harold Jacob argues that the penalty was unnecessarily punitive and excessive.

How did we end up with such a huge fine? A little history: Our boiler room used to burn No. 6 oil, an expensive, dirty fuel. The conversion completed in 2013 switched to a dual-fuel system — the boiler room runs primarily on natural gas delivered by Con Ed, but can also switch to burning No. 2 oil stored on site.

east-river-boiler-5As a “dual-fuel interruptible gas customer,” the coop receives a discount on natural gas with the agreement that, when Con Ed calls for a “gas interruptible event” we are required to switch to No. 2 oil within hours. This happens when Con Ed is concerned about its gas supply during a cold spell. If we don’t comply, huge penalties are imposed — nine times the market cost of the gas we consume — and if we are in violation of the agreement twice, Con Ed can automatically revoke our natural gas discount for the rest of the winter plus one additional year. (Con Ed has an online primer for dual-fuel interruptible gas customers here, in case you’re interested in all the contractual nitty-gritty.)

So, back to January, when Con Ed called a gas interruptible event for Wednesday, January 7 at 10:00 a.m. The boiler room switched over as required. The next morning, before dawn, with temperatures in the single digits for the second day in a row, the entire boiler room shut down without warning.

Board president Gary Altman’s memo distributed later that day presented the heroic details: shutdown triggered at 4:15 a.m.; defective emergency shut-off switch replaced by 6:00 a.m.; the slow, careful restart process while frantic calls came in from cold cooperators; heat reached all four East River buildings by 8:50 a.m.; hot water restored shortly thereafter.

But since the system was restarted and kept on gas, and Con Ed’s gas interruptible event was still ongoing, the boiler room used gas for two days that was not permitted under our contract, hence the massive penalty.

Mr. Jacob says he made the decision to stick with gas because the shutdown occurred while the system was running on oil and the precise cause of the shutdown was still not known. He wanted to ensure that the heat would stay on during such extreme cold weather, so keeping the system on gas eliminated a variable that may have been related to the shutdown.

He told me that even if he knew at the time that the penalty would be such a high cost he would have made the same decision, because there was no sense risking another shutdown with the temperature so low. But he’s making an argument with the Public Service Commission that no penalty should be imposed on the coop based on its adherence to all other gas interruptible events in the past three years.

After winter was over, the emergency shut-off switches around the whole boiler room (there is one at each exit, as required by law) were upgraded with better insulation to keep any moisture from accumulating and freezing, as apparently happened back in January. The heating season has just begun again.

UPDATE: East River’s petition and complaint to the Public Service Commission is available online here.

Is Your Hot Water Back On?

Things appear to be back in order …

TO: All Residents
East River Housing Corporation
Hillman Housing Corporation

FROM: Harold Jacob, General Manager


We wanted you to know that hot water is on and throughout the Hillman buildings and will be fully distributed in all of East River by 5pm.

We thank our bioler crew for an outstanding job working throughout the night to make it possible for hot water, including showers to be enjoyed by all at the close of the work day.

Thank you for your cooperation in this matter.

Hot Water to Shut Down Tonight at 9:00

From management:

TO: All Residents
East River Housing Corporation
Hillman Housing Corporation

FROM: Harold Jacob, General Manager


There will be a 26-hour hot water shutdown on July 22, 2014 beginning at 9 p.m. lasting through July 23, 2014 at 11 p.m.

We need to do maintenance on various valves and pipes, and also to remove some of the old equipment that has been left over from the boiler replacement project.

We will keep you informed. Sorry for this inconvenience and thank you for your understanding.

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Full Steam Ahead

From: Harold Jacob
Re: Final Boilers Testing on November 28-30, 2012

Dear Cooperators:

During the next three days (November 28-30, 2012) our engineers and the manufacturer of the new boiler, Power Flame, will be performing efficiency and NOx emissions tests.

We estimate that we will significantly reduce our NOx emissions (from 45 tons to 11 tons). This means we will no longer be considered a major polluter, and according to state regulations, we will no longer be subject to Title V (a federal program designed to standardize air quality permits). This will also help us to reduce operational costs and our filing fees due to the facts that we (1) have got a brand new boiler; (2) have upgraded two old boilers with new burners; (3) no longer burn #6 oil, but natural gas.

In order to complete the testing we will have to run each of our three boilers at minimum and maximum rates. Therefore, we will give additional steam to the buildings. I know a large number of people who already believe we provide too much steam, but this is a test we must accomplish.

Thank you for understanding.

We are sorry for the inconvenience.

Hot Water Shut Down Overnight Friday

Some more tweaks to the new boiler?

To: East River Housing Residents
Hillman Housing Residents

From: Harold Jacob

Re: Hot Water Shut Down

Dear Cooperators:

This Friday, June 8, 2012, at 9:00PM the Boiler Room will be shutting down the hot water to do some repair work. The hot water will hopefully be back online by Saturday morning, June 9, 2012, at 5:00AM.

We are anticipating another shut down toward the end of next week. We will send a separate notice to confirm.

We are sorry for any inconvenience.

Turning up the heat in May

This just in from Management …

May 14, 2012

TO: All Cooperators

FROM: Harold Jacob

Re: New Boiler Testing on May 15-17, 2012

The new boiler, which we have installed, burns #2 oil and natural gas. We have already run the boiler on natural gas and it is working well. Unfortunately, when they delivered the new boiler the nozzles that burn the oil were not the correct ones. We will be installing the new ones tomorrow, May 15, 2012, and the boiler will have to be tested to see how it works. Therefore, next Tuesday, Wednesday and Thursday, May 15 – 17, 2012 we may put some steam into the pipes and you will get steam in your apartments.

We are sorry for the inconvenience, but our engineers are requiring us to test the boiler.

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