Directs the public service commission to require electric and steam corporations to provide rate reductions or refunds for inadequate or interrupted service; requires electric corporations, in cities having a population of one million or more, to reimburse ratepayers for damages to and losses of property and business caused by power outages lasting more than 12 hours during any 24-hour period; requires steam corporations, in cities having a population of one million or more, to reimburse ratepayers for damages to and losses of property and business caused by service interruptions lasting more than 48 hours.

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S593-2013 Actions

• Jan 9, 2013: REFERRED TO ENERGY AND TELECOMMUNICATIONS

S593-2013 Memo

BILL NUMBER:S593

TITLE OF BILL:
An act
to amend the public service law, in relation to the power of the public
service commission to require refunds of or reductions in rates for
inadequate or interrupted electric or steam service

PURPOSE OR GENERAL IDEA OF BILL:
In its January 2007 report, the
Assembly Queens Power outage Task Force recommended several measures
to improve oversight of utilities and prevent future blackouts. This
bill provides fox prompt, meaningful rate refunds or seductions in
cases where an electric utility fails to meet its statutory duty to
provide the public with a safe and adequate supply of power.

SUMMARY OF PROVISIONS:
Bill � 1 amends subdivision 20 of � 66 of the
Public Service Law to require the Public Service Commission (PSC) to
impose prompt, meaningful rate refunds or reductions in instances
where electric corporations fail to meet objectively measured service
quality standards. Refunds or reductions shall at a minimum equal 5%
of the amount billed to a customer for at least a 12-month period,
subject to possible minimum and maximum cutoffs prescribed by the
PSC. The bill also establishes minimum reimbursements fox service
outages in cities with populations of at least 1 million. Where an
outage lasts more than 12 hours in a 24-hour period, such
reimbursements shall be at least:

* $500 for spoilage of food and medications,

* $1,000 for damages to electrical equipment and instruments, and

* $10,000 to commercial customers fox lost business.

The PSC may also establish reasonable aggregate limits on
reimbursements.

The bill provides that additional rounds of reimbursement consistent
with the foregoing are required for each additional 48-hour period
that the service interruption continues, and that any voltage
reductions that are extensive enough to damage electric equipment or
render it inoperable shall be treated as covered interruptions in
service.

Bill � 2 adds a new subdivision 13 to � 80 of the Public Service Law,
establishing provisions for rate refunds or reductions for
substandard service quality, and reimbursement for damages caused by
service interruptions, applicable to steam corporations.

Bill � 3 requires the PSC to report to the Governor and Legislature by
April 1, 2014 on whether additional legislation, regulations or other
actions are needed to ensure that all electric and steam corporations
adequately reimburse their customers for losses due to service
interruptions and other performance failures.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:


Current law does
not provide any standards to ensure prompt, meaningful rate refunds
or reductions when an electric utility fails to provide safe and
adequate service.

JUSTIFICATION:
In 2006, the western part of Queens suffered a massive
power outage that lasted 9 days. The Assembly Queens power Outage
Task Force studied the outage's causes and the inadequate responses
by the company responsible for the transmission and distribution
system, Consolidated Edison, and by the Public Service Commission.
One underlying cause of this debacle was found to be the reliance by
New York is utility regulators on antiquated laws, regulations and
policies that let companies engaged in energy transmission and
distribution operate without effective oversight.

The Task Force found that current PSC practices fail to incentivize
utilities to meet their statutory Obligations to provide safe and
adequate electric service. Findings that a utility has failed to meet
service reliability standards result at best in token penalties, and
even these amounts are routinely amortized or are deferred until a
subsequent rate proceeding. As a result, ignoring service quality
targets may well make economic sense for the utility.

After the bill was initially drafted, a major steam explosion and
consequent damage to persons and property demonstrated that similar
requirements were needed for steam corporations.

This bill sets forth a standard - generally, 5% of annual billings
that is substantial enough to.restore meaningful incentives for
utilities to take service quality standards seriously. At the same
time, the bill provides realistic reimbursement standards for
utilities serving metropolitan areas in cases where the utility fails
to maintain the electric grid or steam system in good working
condition. In circumstances where electric or steam service is
interrupted for large swaths of a metropolitan area, customers should
not be expected to bear the brunt of expenses caused by unwise
deferrals of maintenance or other utility mismanagement.

PRIOR LEGISLATIVE HISTORY:
2012: Senate Bill
1981-A (Gianaris) - Died in Senate Energy &
Telecommunications Committee
2012: Assembly Bill
2228-A (Hevesi) - Died in Assembly
Corporations, Authorities and Commissions Committee
2010: Assembly Bill
1556 (Gianaris) - Died in Assembly
Corporations, Authorities and Commissions Committee
2008: Assembly Bill
8621-A (Gianaris) - Died in Assembly
Corporations, Authorities and Commissions Committee

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.

EFFECTIVE DATE:


180th day after enactment; provided
that the Public
Service Commission is immediately authorized and directed to
promulgate rules and take other actions needed to fully implement the
bill on such date.

S593-2013 Text

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

                                     593

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  Introduced  by Sen. GIANARIS -- 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 the power of the
    public service commission to require refunds of or reductions in rates
    for inadequate or interrupted electric or steam service

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


    Section  1. Subdivision 20 of section 66 of the public service law, as
  added by chapter 394 of the laws of 1978, is amended to read as follows:

    20. (A) Notwithstanding any general or  special  law,  rule  or  regu-
  lation, the commission shall have the power to provide for the refund of
  any revenues received by any gas or electric corporation which cause the
  corporation  to  have revenues in the aggregate in excess of its author-
  ized rate of return for a period of twelve months.  The  commission  may
  initiate a proceeding with respect to such a refund after the conclusion
  of any such twelve month period.
    (B)  NOTWITHSTANDING  ANY  GENERAL OR SPECIAL LAW, RULE OR REGULATION,
  THE  COMMISSION  SHALL  IMPOSE  PROMPT,  MEANINGFUL  RATE   REFUNDS   OR
  REDUCTIONS  IN INSTANCES WHERE ELECTRIC CORPORATIONS FAIL TO MEET OBJEC-
  TIVELY MEASURED SERVICE QUALITY STANDARDS. SUCH  REFUNDS  OR  REDUCTIONS
  SHALL AT A MINIMUM EQUAL FIVE PERCENT OF THE AMOUNT BILLED TO A CUSTOMER
  FOR  THE  PROVISION OF ELECTRIC SERVICE FOR A PERIOD OF TWELVE MONTHS OR
  SUCH LONGER PERIOD AS THE COMMISSION MAY PRESCRIBE;  PROVIDED,  HOWEVER,
  THAT  THE COMMISSION MAY PRESCRIBE A SCHEDULE SETTING FORTH BOTH MINIMUM
  AND  MAXIMUM  AMOUNTS  THAT  A  CUSTOMER  MAY  RECEIVE  IN  REFUNDS   OR
  REDUCTIONS.
    (C)  IN  ADDITION  TO THE PROVISIONS OF PARAGRAPHS (A) AND (B) OF THIS
  SUBDIVISION, IN EVERY INSTANCE WHERE ELECTRIC SERVICE IS INTERRUPTED DUE
  TO A LOCAL DISTRIBUTION SYSTEM FAILURE LASTING FOR TWELVE HOURS OR  MORE

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01529-01-3

 S. 593                              2

  WITHIN  A TWENTY-FOUR HOUR PERIOD, THE COMMISSION SHALL REQUIRE AN ELEC-
  TRIC CORPORATION THAT DISTRIBUTES ELECTRICITY IN A CITY OF  ONE  MILLION
  OR  MORE TO (1) REIMBURSE CUSTOMERS FOR DAMAGES TO OR LOSSES OF PROPERTY
  INCLUDING,  BUT  NOT  LIMITED  TO PERISHABLE FOOD ITEMS AND MEDICATIONS,
  ELECTRICAL EQUIPMENT, COMPUTER EQUIPMENT,  AIR  CONDITIONING  EQUIPMENT,
  AND OTHER ELECTRONIC EQUIPMENT AND INSTRUMENTS USED BY COMMERCIAL ESTAB-
  LISHMENTS  OR  RESIDENCES;  AND  (2) PROVIDE APPROPRIATE COMPENSATION TO
  THOSE COMMERCIAL CUSTOMERS WHO HAVE LOST BUSINESS AS  A  RESULT  OF  THE
  SERVICE  INTERRUPTION. SUCH COMPENSATION SHALL BE BASED UPON THE AVERAGE
  REVENUES EARNED BY THE BUSINESS IN SIMILAR TIME PERIODS, OR, FOR  A  NEW
  BUSINESS,  THE  AVERAGE REVENUES EARNED BY SIMILAR BUSINESSES IN SIMILAR
  TIME PERIODS. THE COMMISSION MAY  PRESCRIBE  REASONABLE  LIMITS  ON  THE
  AMOUNT  OF  REIMBURSEMENT  AND  COMPENSATION  AVAILABLE  TO  A CUSTOMER;
  PROVIDED THAT SUCH AMOUNTS SHALL NOT BE LESS THAN FIVE  HUNDRED  DOLLARS
  FOR  LOSSES OF FOOD AND MEDICATIONS, ONE THOUSAND DOLLARS FOR DAMAGES TO
  ELECTRICAL EQUIPMENT AND INSTRUMENTS, AND TEN THOUSAND DOLLARS FOR  LOST
  BUSINESS.   ADDITIONAL REIMBURSEMENT AND COMPENSATION IN ACCORDANCE WITH
  THE PRECEDING REQUIREMENTS  SHALL  BE  PROVIDED  TO  EACH  CUSTOMER  WHO
  REMAINS  WITHOUT ELECTRICITY FOR EACH ADDITIONAL FORTY-EIGHT HOUR PERIOD
  THAT THE SERVICE INTERRUPTION CONTINUES. FOR THE PURPOSES OF THIS  PARA-
  GRAPH,  INTERRUPTION  OF  ELECTRIC  SERVICE  SHALL  BE DEEMED TO INCLUDE
  REDUCTIONS IN VOLTAGE THAT DAMAGE ELECTRIC EQUIPMENT OR RENDER IT  FUNC-
  TIONALLY  INOPERABLE.  THE COMMISSION MAY PROVIDE FOR REASONABLE LIMITA-
  TIONS ON  THE  AGGREGATE  AMOUNT  OF  REIMBURSEMENTS  AND  COMPENSATION,
  PROVIDED  THAT  ANY  SUCH  LIMITATIONS SHALL TAKE INTO CONSIDERATION THE
  DURATION OF THE INTERRUPTION AND ITS IMPACT ON RESIDENTIAL  AND  COMMER-
  CIAL CUSTOMERS.
    S  2.  Section 80 of the public service law is amended by adding a new
  subdivision 13 to read as follows:

    13. NOTWITHSTANDING ANY GENERAL OR SPECIAL LAW,  RULE  OR  REGULATION,
  HAVE  POWER  TO  IMPOSE PROMPT, MEANINGFUL RATE REFUNDS OR REDUCTIONS IN
  INSTANCES WHERE STEAM CORPORATIONS FAIL  TO  MEET  OBJECTIVELY  MEASURED
  SERVICE QUALITY STANDARDS. SUCH REFUNDS OR REDUCTIONS SHALL AT A MINIMUM
  EQUAL  FIVE PERCENT OF THE AMOUNT BILLED TO A CUSTOMER FOR THE PROVISION
  OF SERVICE FOR A PERIOD OF TWELVE MONTHS OR SUCH LONGER  PERIOD  AS  THE
  COMMISSION  MAY  PRESCRIBE;  PROVIDED,  HOWEVER, THAT THE COMMISSION MAY
  PRESCRIBE A SCHEDULE SETTING FORTH BOTH MINIMUM AND MAXIMUM AMOUNTS THAT
  A CUSTOMER MAY RECEIVE IN REFUNDS OR REDUCTIONS. IN ADDITION,  IN  EVERY
  INSTANCE  WHERE SERVICE IS INTERRUPTED FOR A PERIOD OF FORTY-EIGHT HOURS
  OR SUCH LESSER PERIOD AS THE COMMISSION MAY  DETERMINE,  THE  COMMISSION
  SHALL REQUIRE A STEAM CORPORATION THAT PROVIDES SERVICE IN A CITY OF ONE
  MILLION OR MORE TO REIMBURSE CUSTOMERS FOR DAMAGES TO OR LOSSES OF PROP-
  ERTY AND TO PROVIDE APPROPRIATE COMPENSATION TO THOSE COMMERCIAL CUSTOM-
  ERS WHO HAVE LOST BUSINESS AS A RESULT OF THE SERVICE INTERRUPTION. SUCH
  COMPENSATION  SHALL  BE  BASED  UPON  THE AVERAGE REVENUES EARNED BY THE
  BUSINESS IN SIMILAR TIME PERIODS, OR, FOR A NEW  BUSINESS,  THE  AVERAGE
  REVENUES  EARNED  BY  SIMILAR  BUSINESSES  IN  SIMILAR TIME PERIODS. THE
  COMMISSION MAY PRESCRIBE REASONABLE LIMITS ON THE AMOUNT  OF  REIMBURSE-
  MENT  AND  COMPENSATION  AVAILABLE  TO  A  CUSTOMER;  PROVIDED THAT SUCH
  AMOUNTS SHALL NOT BE LESS THAN FIVE HUNDRED DOLLARS FOR LOSSES OF  PROP-
  ERTY  AND  TEN THOUSAND DOLLARS FOR LOST BUSINESS. ADDITIONAL REIMBURSE-
  MENT AND COMPENSATION IN  ACCORDANCE  WITH  THE  PRECEDING  REQUIREMENTS
  SHALL  BE PROVIDED TO EACH CUSTOMER WHO REMAINS WITHOUT SERVICE FOR EACH
  ADDITIONAL FORTY-EIGHT HOUR PERIOD, OR LESSER PERIOD  AS  DETERMINED  BY
  THE  COMMISSION, THAT THE SERVICE INTERRUPTION CONTINUES. THE COMMISSION
  MAY PROVIDE FOR  REASONABLE  LIMITATIONS  ON  THE  AGGREGATE  AMOUNT  OF

 S. 593                              3

  REIMBURSEMENTS  AND  COMPENSATION,  PROVIDED  THAT  ANY SUCH LIMITATIONS
  SHALL TAKE INTO CONSIDERATION THE DURATION OF THE INTERRUPTION  AND  ITS
  IMPACT ON RESIDENTIAL AND COMMERCIAL CUSTOMERS.
    S  3.  On or before April 1, 2014, the public service commission shall
  review its existing policies and shall report to the  governor,  speaker
  of the assembly, the temporary president of the senate, the chair of the
  senate  finance  committee,  the  chair  of  the assembly ways and means
  committee, the chair of the assembly energy committee and the  chair  of
  the senate energy and telecommunications committee on whether additional
  legislation,  regulations  or  other  actions  are needed to ensure that
  electric and steam  corporations  adequately  reimburse  and  compensate
  their  customers for losses due to service interruptions and other fail-
  ures to provide safe and adequate service  as  required  by  the  public
  service law.
    S 4. This act shall take effect on the one hundred eightieth day after
  it shall have become a law. Provided, that the public service commission
  is  immediately  authorized  and  directed  to take any and all actions,
  including but not limited to the promulgation of any necessary rules and
  the review of reimbursement  and  compensation  policies,  necessary  to
  fully implement the provisions of this act on its effective date.