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Legislative Memo

Darren Suarez
Manager of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.68013 (Rules at the request of the Governor); same as A.42013 (Rules)

Support

SUBJECT:

"On-Bill Financing"

 

DATE:

December 6, 2010

 

The Business Council opposes this legislation that would mandate that electric and gas utilities become bill collectors for NYSERDA.  Under this “on-bill financing” legislation, utilities would have to collect payments for NYSERDA “Green Jobs Green New York” (GJGNY) energy efficiency loans from their ratepayers along with their utility payments.

We see no compelling reason for this mandate, and question the purported positive effect on the level of participation in GJGNY.  As this program duplicates NYSERDA's existing billing system for the Green Jobs- Green New York funding program, we see this as a poor use of energy-related funds.

It will impose additional costs on utilities, costs that would eventually be borne by industrial, commercial and residential ratepayers.  The bill requires utilities to submit proposed tariffs to the PSC to create and finance this mechanism, which – if approved – would include new costs in the utility rate base.  The bill also states that utilities “shall utilize funding available from NYSERDA” to defray the costs of developing and implementing this program, but provides no specific NYSERDA funding mechanism.  In any case, since NYSERDA funding is mostly derived from ratepayers as well, the effect is the same as a tariff-based cost recovery.

In addition to the added costs of implementing and operating this parallel billing system, this bill also includes other adverse impacts:

On-bill financing pilot projects are already underway in New York State, and additional voluntary programs are under development. 

These voluntary programs should be encouraged, with the utility's experience under these pilot programs serving as the basis for any consideration of a mandatory statewide program.

However, given ongoing voluntary efforts, and the questionable provisions of this proposal, The Business Council opposes S.68013 and recommends against its approval by the Senate.