Home

Legislative Memo

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

BILL:

S 5484 A (Maziarz )/A 8515 (Kearns)

  Support

SUBJECT:

Limits increases of the System Benefits Charge and the Renewable Portfolio Standard

 

S 5484 A (Maziarz )/A 8515 (Kearns

DATE:

January 27, 2014

 

The Business Council of New York State supports S5484A/ A08515 and efforts to limiting the excessive surcharge of the system benefit charge (SBC) and the surcharge for the renewable portfolio standard (RPS). Specifically, the bill would amend the Public Service Law to limit the Commission from increasing the SBC and RBC greater that the total amount collected in 2014.

The Business Council believes that the existing EEPS, RPS, and SBC surcharges are currently at a damaging level, jeopardize business expansion and job retention efforts of incumbent businesses.
Recent Public Service Commission (PSC) comments by Multiple Interveners (MI) illuminated the scope of the impact of EEPS, RPS, and SBC, when they demonstrated that collectively their cost can be greater than “traditional” delivery services for many large non-residential customers.

First, consider a hypothetical, large non-residential electric customer taking delivery service from Niagara Mohawk Power Corporation d/b/a National Grid (“Niagara Mohawk”) under S.C. 3-A, transmission voltage. The customer has a steady 20 MW electric demand and operates at an 85% load factor. The annual cost of “traditional” delivery service for such customer under Niagara Mohawk's existing rates is $680,400.1  In comparison, the combined annual cost of the EEPS, RPS and SBC surcharges for the same hypothetical customer is $1,071,926.16.2 Thus, the three surcharges more than double the hypothetical customer's cost of “traditional” delivery service.3

It is inexplicable how EEPS, RPS, and SBC surcharges could be more costly than traditional delivery service. As such, The Business Council strongly supports the general goal legislation, but request that the legislation be amended to include a schedule for decreasing existing surcharges.

____________________________

  1. 1. S.C. 3-A transmission customers pay two charges for “traditional” delivery service (i.e.,  excluding various reconciliations and surcharges). The first charge, the Customer Charge, is  $3,500 per month, or $42,000 annually. The second charge, the Demand Charge, is $2.66 per kW. A customer with a steady 20 MW demand would pay a Demand Charge of $53,200 per month  (i.e., 20,000 kW x $2.66 per kW), or $638,400 annually. Combining those two charges (i.e.,  $42,000 + $638,400) produces an annual cost of “traditional” delivery service of $680,400. See  Niagara Mohawk Electric Tariff, PSC No. 220, Leaf 391.
  2. A customer with a 20 MW demand and an 85% load factor consumes 148,920,000 kWh  annually (i.e., 20,000 kW x 8,760 hours x .85). Niagara Mohawk's existing EEPS, SBC and RPS  surcharges are $0.002433 per kWh, $0.001775 per kWh, and $0.002990 per kWh, respectively. See Niagara Mohawk Electric Tariff, PSC No. 220, SBC Statement (depicting the EEPS and SBC  surcharges) and RPS Statement (depicting the RPS surcharge). Applying combined surcharges of $0.007198 to 148,920,000 kWh results in total annual surcharges of $1,071,926.14.
  3. Comments of MI Page 2