S.7508 / A.9508, Part Z


Senior Director, Government Affairs


S.7508 / A.9508, Part Z


Expanded PSC Oversight Authority



The Business Council opposes Part Z of S.7508 / A.9508, the Transportation and Economic Development Article VII bill, which proposes to vastly expand the authority vested in the Department of Public Service (DPS), effectively granting the Governor even more authority and control over the New York utility and telecommunications market.

At the outset, it is important to note that the Public Service Commission (PSC) was statutorily designed to be an independent, autonomous agency tasked with rate-setting, oversight and enforcement. In recent years, however, it appears that the PSC has become less independent and seemingly more vulnerable to undue external influence. 

Sections 25 and 25-a of the Public Service Law grant the PSC statutory authorization to penalize utilities for non-compliance with established regulations. Section 25-a grants the PSC broad authority to assess civil penalties against combination gas and electric corporations and their respective executive officers for similar issues.  

Under current law, penalties are based on (i) the seriousness of the violation, (ii) whether the entity or officers have committed repeated violations, (iii) whether the entity or officer(s) knew of the existence of a violation, (iv) the entity’s gross revenues and financial status, and (v) such “other factors as the commission may deem appropriate and relevant.” To commence a formal proceeding, the PSC would issue an “Order to Show Cause,” which requires a combination gas and electric utility to publicly respond to the allegations levied against it.

Part Z represents a significant change to the current statutory framework. Under this proposal, the Department, rather than the Commission, would be empowered to initiate a proceeding if the Department “believes” that either a combination gas and electric corporation or an electric corporation, gas corporation, a cable television corporation, and/or a telephone corporation, may be subject to the imposition of a civil penalty. Part Z removes the requirement that a ‘order to show cause’ be publicly issued to begin a formal investigation. This would be a significant expansion of the authority currently granted to the PSC. Further, vesting this expanded authority in the Department would make the process less transparent and more likely to be used punitively against entities disfavored by a given administration for any number of factors. Further, removing language that allows for ‘reasonable’ compliance creates a strict liability standard that, arguably, could serve to decrease the frequency of mutually agreeable resolutions. 

The legislature created the PSC as an independent entity and granted it specific oversight and enforcement authority. Any such oversight should be conducted transparently and within the public sphere, where stakeholders, affected entities and individuals can be allowed a meaningful opportunity to contribute; certainly, such an important task should not be undertaken by administrative staff behind closed doors. The Business Council recommends that the legislature reassert itself in the conduct of oversight and not cede any additional authority to the Administration. As a co-equal branch, elected representatives should preserve and defend transparent government and the ability to have their voices heard on critical issues that will undoubtedly impact each legislative district within the State. 

Accordingly, the Business Council opposes adoption of Part Z.