This bill has been amended

Bill S593-2013

Directs public service commission to require electric and steam corporations to provide rate reductions or refunds for inadequate or interrupted service

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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  • Jan 8, 2014: REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • Jan 9, 2013: REFERRED TO ENERGY AND TELECOMMUNICATIONS

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.


Text

STATE OF NEW YORK ________________________________________________________________________ 593 2013-2014 Regular Sessions IN 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
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
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.

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