National Grid is refusing to take any new applications for natural gas hookups until its controversial Williams Transco pipeline is approved.
The State Department of Environmental Conservation denied a water quality permit for the 24-mile underwater pipeline, because of concerns it would kick up hazardous metals and disturb water habitats.
The pipeline would run from New Jersey to the Rockaways in Queens, and expand the Transco pipeline, which goes from Texas to the Northeast Coast.
It would allow National Grid to bring natural gas from Pennsylvania's shale gas fields to the metropolitan area.
Supporters say it's crucial for meeting rising demand for natural gas in the city and Long Island.
But environmental groups have protested saying it threatens marine life and extends reliance on fossil fuels, rather than renewable energy sources.