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Legislative Memo

Ken Pokalsky
Senior Director, Government Affairs
T 518.465.7517 x205
www.bcnys.org

BILL:

A.9091 (Calhoun)

  Support

SUBJECT:

Repealing Energy Assessments

 

A.9091 (Calhoun)

DATE:

September 10, 2009

 

The Business Council strongly supports this legislation that would repeal the $600 million energy assessment adopted with the FY 2010 state budget.

Specifically, this bill would repeal Part NN of chapter 59 of the laws  of  2009, which increased the Public Service Commission's Section 18-A assessment on energy utilities from .3 percent of gross operating revenues to 2 percent of gross operating revenues, a near seven-fold increase.

This “temporary state energy and utility service conservation assessment” will increase annual costs on business and residents by more than $500 million per year, or an aggregate $2.5 billion between now and its planned sunset in 2014.

The Business Council strongly opposed this assessment when it was first proposed.  With industrial and commercial electric power costs already about 40 percent above national averages, energy costs are the second most significant cost-competitiveness factor cited by our members. 

New York's high energy costs are driven by a growing array of state-imposed assessments – the System Benefit Charge, the Renewable Portfolio charge, and new costs related to the purchase of CO2 emission allowances – which together add between 10 and 15 percent to the cost of electric power.

New York's already high energy costs have had an adverse impact on energy-depended business sectors. 

This new assessment is now hitting industrial firms and other major energy consumers, and the impact is significant, with companies reporting increases costs in the $100,000 to $1 million per year range.

This energy assessment should never have been adopted.

We applaud this proposal to roll back the Section 18-A assessment, and strongly support its adoption.