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Legislative Memo

BILL:

S.4208 Senate Budget Part SS

Support

SUBJECT:

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

 

DATE:

March 12, 2015

 

The Business Council supports the provisions of S.4208 which eliminate 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, but it has already been extended by 3 years.

The Business Council appreciates the Senate Majority’s continued commitment to end this burdensome assessment.

The provision (Part SS) would reduce 18-a by a total of $173 million in 2015 and $134 million in 2016. This measure will save all utility customers $307 million, because every utility customer including schools, hospitals, universities, residents, farms, small businesses, and manufactures currently pays 18-a.

For businesses, the high cost of energy 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, the current energy assessment costs some large businesses upwards of $1 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.

Therefore, The Business Council of the State of New York supports the proposed elimination of 18-a.