The Business Council of New York State New York opposes Part L of A. 9008/S. 6408 which would amend Section 66 of the Public Authorities Law ratemaking process. The proposed amendments to the ratemaking process are not in the best interest of energy consumers. The changes will amend the current ratemaking process in a manner that will increase uncertainty, slow the ratemaking process, and not meet the needs of customers.
Currently ratemaking is an eleven month process which begins when the utility files for a major rate case. The PSC staff then reviews the utility filing and then presents its recommendations. Then the PSC staff, other parties and the utility seek to reach a settlement. This process has resulted in the vast majority of rate cases being resolved in eleven months.
This proposal wouldextend the length of time the PSC has to approve utility sought rate increases, from eleven to fifteen months. Additionally, the provision would establish a temporary rate. Taken together the proposal would significantly extend currently ratemaking process and will create uncertainty for energy customers.
When the PSC develops a temporary rate that is inadequate customers can be subject to unexpected retroactive collections. For many customers unexpected increases in rates are very challenging. For many of New York’s small business that are energy intensive (greenhouses, small manufactures, print operations) unexpected rate increases can lead to cash follow problems. Additionally, retroactive collections can dramatically change the cost of production for a given good. Businesses that quote customers a fixed price for a given good cannot reasonably retroactively collect those costs from their customers.
For these reasons, The Business Council strongly opposes this legislation.