NY State Senate Bill 2013-S3467

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to energy and telecommunications
Feb 04, 2013	referred to energy and telecommunications

co-Sponsors

2013-S3467 (ACTIVE) - Details

See Assembly Version of this Bill:: A5563
Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §65, Pub Serv L
Versions Introduced in 2015-2016 Legislative Session:: A4068

2013-S3467 (ACTIVE) - Summary

Relates to phasing out transition fees.

2013-S3467 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S3467

TITLE  OF BILL:   An act to amend the public service law, in relation to
phasing out transition fees

PURPOSE:  This bill would phase out transition fees, initially providing
a budget plan to consumers who face high rate variability and eventually
discontinuing the assessment of transition fees.

SUMMARY OF PROVISIONS:

§ 1- Amends section 65 of the public service law by adding a new  subdi-
vision 6-a which phases out transition fees

§ 2- Effective date.

JUSTIFICATION:   Allowing electric utilities to collect transition costs
harms a competitive market. If utilities can simply pass the expenses on
to customers, they will not have as much incentive  to  mitigate  actual
transition costs. It would be impossible for a regulator to know whether
the  utility  is  doing all it can to reduce costs; the market is better
suited for such a task. Allowing transition costs incentivizes  electric
utilities  to  recover  costs  rather than lower costs to become compet-
itive. This  institutionalizes  existing  uneconomic  costs  and  rates,
stunting  a  natural  phasing  out  of  these uneconomic and inefficient
costs.

Transition costs suppress investment in new technology by protecting  an
electric  utility's  existing  assets. Similar to many other industries,
expensive technological infrastructure becomes obsolete before it  wears
out.  Market pressures demand investments in new technology, even before
the preexisting infrastructure's lifespan  expires.  For  example,  cell
phone providers must invest in new infrastructure to remain competitive,
even  though, on a mechanical level, the old infrastructure is perfectly
functional. Allowing electric  utilities  to  charge  a  transition  fee
prolongs  the  use of obsolete and inefficient technology. Technological
progress will always threaten the value of capital assets; without tech-
nological progress, assets would be more valuable for longer periods  of
time.    But  this  is  not  a persuasive argument to slow technological
progress.  Originally designed to ease the transition to  a  deregulated
market,  transition  costs  have outstayed their usefulness and suppress
investment in new technology.

If transition charges exist at all, the  charge  should  not  vary  from
month-to-month.  While  a  complete  phase  out of transition charges is
necessary, electric utilities should be given  a  reasonable  period  to
prepare  for this change. However, the turbulent rise and fall in prices
is detrimental to New York State businesses and  must  end  immediately.
Unstable  energy prices cripple business models and deter New York State
economic growth and development.

LEGISLATIVE HISTORY: None.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE:

This act shall take effect immediately.

2013-S3467 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3467

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 4, 2013
                               ___________

Introduced  by Sen. GALLIVAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on  Energy  and  Telecommuni-
  cations

AN ACT to amend the public service law, in relation to phasing out tran-
  sition fees

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 65 of the public service law is amended by adding a
new subdivision 6-a to read as follows:
  6-A. TRANSITION FEES. (A) EFFECTIVE AS OF JANUARY FIRST, TWO  THOUSAND
FOURTEEN: NO ELECTRIC UTILITY SHALL CHARGE A TRANSITION RATE THAT VARIES
BY FIFTY PERCENT OR GREATER FROM MONTH-TO-MONTH.
  (B) ANY ELECTRIC UTILITY WHOSE TRANSITION RATE VARIES BY FIFTY PERCENT
OR  GREATER  FROM MONTH-TO-MONTH MUST PROVIDE THE CUSTOMER WITH A BUDGET
PLAN, WHEREIN SUCH BUDGET PLAN INCLUDES A RATE SCHEDULE  THAT  WILL  NOT
VIOLATE PARAGRAPH (A) OF THIS SUBDIVISION.
  (C)  NO  ELECTRIC UTILITY SHALL CHARGE A TRANSITION FEE IN ADDITION TO
OR IN SUBSTITUTION OF A TRANSITION FEE  CALCULATED  USING  A  TRANSITION
RATE.
  (D)  EFFECTIVE  AS OF JANUARY FIRST, TWO THOUSAND FIFTEEN: NO ELECTRIC
UTILITY SHALL CHARGE A TRANSITION RATE THAT  EXCEEDS  THE  MEAN  OF  THE
TRANSITION  RATE  CHARGED FROM JANUARY, TWO THOUSAND TWELVE TO DECEMBER,
TWO THOUSAND TWELVE.
  (E) EFFECTIVE AS OF JANUARY FIRST, TWO THOUSAND SEVENTEEN: NO ELECTRIC
UTILITY SHALL CHARGE A TRANSITION FEE.
  (F) FOR THE PURPOSES OF THIS SUBDIVISION, THE  FOLLOWING  TERMS  SHALL
HAVE  THE  FOLLOWING MEANINGS: (I) "TRANSITION RATE" SHALL BE DEFINED AS
THE PRICE PER KILOWATT HOUR CHARGED BY THE ELECTRIC UTILITY TO CALCULATE
THE TRANSITION FEE.
  (II) "TRANSITION FEE" SHALL BE DEFINED AS ANY FEE CHARGED BY AN  ELEC-
TRIC  UTILITY FOR THE ELECTRIC UTILITY'S COSTS, LIABILITIES, AND INVEST-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05750-02-3

S. 3467                             2

MENTS, SUCH AS UNECONOMIC ASSETS, THAT ELECTRIC UTILITIES WOULD  REASON-
ABLY  EXPECT TO RECOVER IF THE FORMER REGULATORY STRUCTURE CONTINUED AND
THAT WILL NOT BE RECOVERED AS A RESULT OF  RESTRUCTURED  INDUSTRY  REGU-
LATION THAT ALLOWS RETAIL CHOICE OF ELECTRICITY SUPPLIERS.
  (III)  "BUDGET  PLAN"  SHALL  BE  DEFINED AS A PLAN DESIGNED TO REDUCE
FLUCTUATIONS IN CUSTOMERS' BILLS DUE TO SEASONAL  PATTERNS  OF  CONSUMP-
TION.  UNLESS  OTHERWISE  AUTHORIZED  BY THE COMMISSION, AS DESCRIBED IN
SECTION SIXTY-SIX OF THIS ARTICLE, EACH SUCH PLAN SHALL BE BASED ON  THE
CUSTOMER'S  RECENT  TWELVE-MONTH EXPERIENCE, ADJUSTED FOR KNOWN CHANGES.
IF TWELVE MONTHS OF BILLING DATA ARE NOT AVAILABLE FOR THE CUSTOMER THEN
TWELVE MONTHS OF BILLING DATA FOR THE PREMISES SHALL BE USED. IF  TWELVE
MONTHS OF BILLING DATA ARE NOT AVAILABLE FOR THE PREMISES THEN THE UTIL-
ITY SHALL ESTIMATE FUTURE CONSUMPTION OVER THE NEXT TWELVE-MONTH PERIOD.
EACH SUCH PLAN SHALL PROVIDE THAT BILLS CLEARLY IDENTIFY CONSUMPTION AND
STATE  THE  AMOUNTS  THAT  WOULD BE DUE WITHOUT A BUDGET PLAN. EACH SUCH
PLAN SHALL PROVIDE THAT BILLS BE SUBJECT TO REGULAR REVIEW FOR CONFORMI-
TY WITH ACTUAL BILLINGS. EACH SUCH PLAN SHALL BE FILED WITH THE  COMMIS-
SION  AND  ANY SIGNIFICANT CHANGES IN THE PLAN SHALL BE SUBMITTED TO THE
COMMISSION FOR REVIEW BEFORE IMPLEMENTATION.
  S 2. This act shall take effect immediately.

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Senate Bill S3467

Sponsored By

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

co-Sponsors

2013-S3467 (ACTIVE) - Details

2013-S3467 (ACTIVE) - Summary

2013-S3467 (ACTIVE) - Sponsor Memo

2013-S3467 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S3467

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Sponsored By

Patrick M. Gallivan

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

co-Sponsors

Michael F. Nozzolio

2013-S3467 (ACTIVE) - Details

2013-S3467 (ACTIVE) - Summary

2013-S3467 (ACTIVE) - Sponsor Memo

2013-S3467 (ACTIVE) - Bill Text download pdf

Comments