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The Business Council opposes this legislation which will provide a significant advantage to persons and entities engaged in labor-related disputes with regulated energy utilities, under the guise of protecting ratepayers.
This bill would categorically deem per se imprudent (and therefore unrecoverable through rates) any expenses incurred by a gas or electric utility for related to collective bargaining negotiations or disputes; grievances, arbitrations, or contract interpretation or enforcement proceedings with a labor organization; litigation or administrative proceedings against, or initiated by, a labor organization representing the corporation's employees; and certain costs related to workers’ compensation awards.
Tellingly, the bill sponsors provide no evidence of bad faith actions or improper cost recovery of such expenditures by utilities, or any shortcomings of the Public Service Commission in reviewing such expenditures. They only offer the assertion that legal disputes between utilities and their workforce are “management decisions” that do not benefit ratepayers
In fact, this proposal would eliminate the distinction between reasonable and unreasonable expenditures incurred by a utility, including utility expenditures in cases where entities are making unfounded or unwarranted claims against a utility, including those addressing issues – including but not limited to those related to misconduct or unsafe practices -- that could impact system reliability and public safety and whose costs could therefore adversely impact ratepayers.
The PSC already has the authority to review utility’s legal and administrative costs, and on a case-by-case basis can disallow the recovery of any costs that are excessive or not in the public interest. The sponsors of this bill provide no evidence of any shortcomings in the PSC’s current review authority or practice.
Even so, this bill would impose a no-exception blanket prohibition on cost recovery of listed labor-related actions.
We believe this bill represents unfounded restrictions on utility cost recovery of necessary, good-faith legal expenditures, and is simply bad public policy.
For these reasons, The Business Council opposes approval of S.9251/A.10510.