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Legislative Memo

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

BILL:

S.6408 / A.9008 TED Article VII Budget Bill - Part C

Support

SUBJECT:

Metropolitan Transit Authority (“MTA”) cost shift to Utilities

 

DATE:

February 3, 2016

 

The Business Council of New York State strongly opposes the Executive Budget proposal to create a new subdivision 12-a of the Public Authorities Law, which would shift millions of dollars of capital costs from the Metropolitan Transit Authority (“MTA”) to the state’s utilities and their consumers.

Specifically, this proposed language (see below) would establish that utilities and their customers are solely responsible for the cost incurred when the MTA makes a capital improvement that requires the moving or protection of electric lines, telephone, gas, steam or cable lines.


12-a. Whenever in connection with the improvement construction, reconstruction or rehabilitation of a transportation facility, including as part of a joint arrangement, the authority determines that the pipes, mains or conduits of any public service corporation and any fixtures and appliances connected therewith or attached thereto must be removed or otherwise protected or replaced, the cost of such removal, protection or replacement whether performed by the authority or the public service corporation shall be borne solely by the public service corporation. (TED Part C)

In addition to these unfair cost shifts, this provision would eliminate the MTA’s incentive to ensure that those costs are minimized.

In New York City and elsewhere, there are layers of critical underground infrastructure owned and maintained by utilities. Pipelines bring natural gas from across the country, and distribute it to homes. Power lines link the city to the larger regional grid. Steam travels from cogeneration facilities to buildings through miles of underground conduits. A web of fiber optic lines connects New Yorker’s to the people of the world.

This new proposal will prove very costly because of the numerous times utility infrastructure needs to be removed, replaced, or protected during MTA construction, or repair.

It is important to remember, these critical systems require special care when work is conducted near them. Moving or protection utility lines can cost multiple millions of dollars because such project includes not just the cost of labor, including wages, expenses, but also costs related to material and the cost of handling the materials; the use specialized construction vehicles; the use of large tools and equipment; administrative costs including engineering, drafting, administration, and inspection; necessary governmental permits or licenses; mobile generating; fuel for mobile generating equipment operation; and the use of real property for staging.

Under this proposal, all of these costs would be shifted to the affected utility, and ultimately to those utility’s customers, including customers located well outside of the MTA service territory.

Current practices requires all parties, including businesses, and government entities,  to pay the costs caused by their own activities and construction decisions, which is inherently fair, resulting in all parties having an incentive to minimize the impacts to critical systems.

For these reasons, we respectfully urge the legislature to reject the proposed subdivision 12-a and the significant cost shifting it would produce.