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Legislative Memo

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

BILL:

S. 6357/A. 8557  Executive Budget Part S

  Support

SUBJECT:

Reduce the Temporary State Energy and Utility Service Conservation Assessment (18-a)

 

S. 6357/A. 8557  Executive Budget Part S

DATE:

February 10, 2014

 

The Business Council of the State of New York supports to A. 3008C Part N, which would reduce the Temporary State Energy and Utility Service Conservation Assessment (often referred to as 18-a). In 2009, when this temporary fee was imposed, there was an explicit promise to the people of the state that this assessment would not be permanent.

The provision (Part S) would reduce 18-a by a total of $200 million per year. The provision would eliminate the assessment on industrial utility customers and accelerating the phase out for all other utility customers. Under current law, the assessment, which is deposited to the General Fund, will be phased out beginning in 2014-15 and will expire on March 31, 2017. Estimated revenues from the current law are $432 million in 2014-15, $360 million in 2015-16, and $326 million in 2016-17.

Specifically, the bill would eliminate the assessment for electric customer accounts with a monthly peak demand of one thousand kilowatts or more in the last preceding calendar year and gas customer accounts with an annual consumption in the last preceding calendar year of one hundred thousand dekatherms or more, and all customers of municipal electric and gas utilities and water works corporations. Additionally, the assessment would be reduced for all remaining utility customers

For businesses, high costs make New York a more difficult place to do business. Reducing the cost of doing business is widely recognized as a key component to growing the state's economy and creating more private sector jobs. In fact, National Grid estimates that the current energy assessment cost some large businesses upwards of $2 million per year– money that could be reinvested elsewhere for greater growth.  

A 2010 report from the Public Policy Institute shows that state and local taxes and assessments on electric power alone impose a $6.4 billion burden on the state's economy. The study found that that “fully 26.68 percent of New Yorkers' electric bills support state and local taxes and fees.”

Energy is the basic driver of all major economies and in the interest of economic growth The Business Council of the State of New York supports the proposed reduction in 18-a.