A.9008-B TED Article VII Budget Bill - Part J


Director of Government Affairs


A.9008-B TED Article VII Budget Bill - Part J


Tax on Gas and Electric Customers



The Business Council opposes Part J which would authorize the Public Service Commission to establish an assessment up to $19.7 million on gas and electric customers.  The funds collected would be transferred to the New York State Energy Research Development Authority (NYSERDA) for research, development and demonstration, policy, planning and the NY Fuel Program; Department of Environmental Conservation (DEC) climate change program; and the University of Rochester laboratory for laser energetics.

This special assessment is in addition to the special assessment under Section 18-a of the Public Service Law which authorizes the Department of Public Service to assess gas and electric corporations for expenses related to administering Public Service Law programs.

The State Energy Plan has committed the State to a goal of achieving energy consumer cost savings, but continuation of State energy assessments will remain a barrier to achieving this goal. Part J is one of many of New York State’s hidden energy taxes which increases the real cost of energy in New York State. It is part of a growing trend of hidden energy taxes and assessments that provide funding for programs that should be considered with other General Fund expenses. Furthermore these hidden taxes have become more prevalent because, regardless of an entity’s tax status, these taxes are unavoidable for energy consumers.

Additionally, it has been well documented that lower-income families are more vulnerable to energy costs than upper higher-income families because energy represents a larger portion of their household budgets.  Energy consumes one-fifth or more of the household incomes of lower- and middle-income families, an amount usually spent on food, housing, or health care.

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, 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 promoting economic growth, The Business Council opposes this proposed energy tax, and requests that the State either find funding in the General Fund for these programs or reduces unwarranted spending programs.