The Business Council of the State of New York opposes Part U which would authorize the Department of Public Service (DPS) to assess public utilities (telephone, electric, water, and natural gas companies) and ultimately their customers for $12,950,500, an increase of over $10M from last year. The assessments will cover the expenses of the Departments of Agriculture and Markets, Environmental Conservation, State, the Office of Parks, Recreation and Historic Preservation and a portion of the electric generation facility cessation mitigation fund.
Section 18-a (2) of the Public Service Law (PSL) authorizes the DPS to assess public utilities for costs associated with administering Public Service Law programs. In 2009, Public Service Law Section 18-a was restructured to end a practice of off-loading various agency costs on to utilities.
Specifically, the 2009-2010 Budget increased the permanent assessment from one-third of one percent to a full percent (Section 18-a (2)(G)) of a utility’s annual gross intrastate operating revenue. The 2009-2010 Budget also included a new two-percent “temporary state energy and utility service conservation assessment.”
The more famous temporary assessment was scheduled to expire in March of 2014. In 2013, after extensive negotiations, the final 2013-14 state budget included an extension of the assessment, but committed the state to a full phase-out of the temporary assessment scheduled by the aforementioned March 2017 date. This budget does not extend the temporary assessment.
TED Part U would treat expenses of the Departments of Agriculture and Markets, Environmental Conservation, State, and the Office of Parks, Recreation and Historic Preservation as eligible expenses of utility assessment revenues making expenditures by those agencies a covered expense of the utility assessment revenues. Each of the agencies would effectively be cap at the level of the proposed appropriation as follows:
- Departments of Agriculture and Markets $435,000
- Department of Environmental Conservation $1,610,500
- Department of State $808,000
- Office of Parks, Recreation and Historic Preservation $97,000
This year this provision would require the public service commission to assess public utilities $10M to be transferred to Electric Generation Facility Cessation Mitigation Fund. The Fund was created to provide grant assistance to support local government entities, including counties, towns, cities, villages, school districts and special districts, impacted by reductions in the tax liability and/or payments in lieu of taxes (Tax Loss –greater than 20%) owed by an electric generation facility subject to their taxing authority.
While the Business Council recognizes the concerns of the municipalities and school districts that face the loose of a power generating facility. It is not sustainable to require this cost to become the burden of electric customers. Already some have advocated for a $200M fund. If in eleven years the State does transform the energy sector a $200M fund will not cover a quarter of the need.
The Business Council does not oppose the historic 18-a assessment which enables state regulators to recover their costs for regulating the various utilities (telephone, electric, water, and natural gas companies) they oversee. But the assessment should be reduced to its past level which was one-third of one percent. The State should reject this expanding taxing mechanism and instead pay for general spending with general fund dollars.