The Business Council opposes this legislation that would mandate that electric and gas utilities become bill collectors for NYSERDA. Under this “on-bill financing” legislation, utilities would have to collect payments for NYSERDA “Green Jobs Green New York” (GJGNY) energy efficiency loans from their ratepayers along with their utility payments.
We see no compelling reason for this mandate, and question the purported positive effect on the level of participation in GJGNY. As this program duplicates NYSERDA's existing billing system for the Green Jobs- Green New York funding program, we see this as a poor use of energy-related funds.
It will impose additional costs on utilities, costs that would eventually be borne by industrial, commercial and residential ratepayers. The bill requires utilities to submit proposed tariffs to the PSC to create and finance this mechanism, which – if approved – would include new costs in the utility rate base. The bill also states that utilities “shall utilize funding available from NYSERDA” to defray the costs of developing and implementing this program, but provides no specific NYSERDA funding mechanism. In any case, since NYSERDA funding is mostly derived from ratepayers as well, the effect is the same as a tariff-based cost recovery.
In addition to the added costs of implementing and operating this parallel billing system, this bill also includes other adverse impacts:
- It places public utilities in a position to terminate utility services to customers that are in arrears of their on-bill financing payments to NYSERDA, the same as if they were in arrears of their utility energy payments. It has been reported that 1 million New York ratepayers are in arrears in their utility bills. There is obvious concern that this mechanism could add to utility payment delinquencies and service termination.
- The bill could impair utility revenues related to GJGNY financing recipients, as it provides that where a customer makes an underpayment of their utility bill, the payment will be allocated between the cost of payment for utility services and the repayment of the GJGNY loan.
- The legislation allows NYSERDA to secure repayment of loans through liens on customer's real property, which will complicate real property transactions where a GJGNY-financed project has been implemented.
On-bill financing pilot projects are already underway in New York State, and additional voluntary programs are under development.
These voluntary programs should be encouraged, with the utility's experience under these pilot programs serving as the basis for any consideration of a mandatory statewide program.
However, given ongoing voluntary efforts, and the questionable provisions of this proposal, The Business Council opposes S.68013 and recommends against its approval by the Senate.