The Business Council opposes this legislation that would force electric and gas utilities, as well as NYPA and LIPA, to become bill collectors for NYSERDA. Under this “on-bill financing” legislation, utilities would have to collect payments for NYSERDA energy efficiency loans from their ratepayers along with their utility payments.
We oppose this bill because we find it to be bad energy policy with unintended adverse consequences.
- It will impose additional costs on utilities, costs that would eventually be borne by ratepayers. The bill requires utilities to submit proposed tariffs to the PSC to create and finance this administrative mechanism, which – if approved – would included 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 funding mechanism. Since NYSERDA funding is mostly derived from ratepayers as well, the effect is the same as a tariff-based cost recovery.
- As NYSERDA is already implementing the “green jobs” revolving loan fund, the need for this additional, parallel billing mechanism is questionable at best.
- It places an additional “enforcement” mechanism on public utilities, as they will be put in a position of terminating services to customers that are in arrears of their on-bill financing payments, the same as if they were in arrears of their utility energy payments. In addition, NYSERDA is also authorized to secure repayment of loans through liens on ratemakers’ property.
- This legislation could adversely impact a utility’s revenues, since it provides that if a utility receives an underpayments of bill that has both utility and NYSERDA components, the utility must allocated the payment between on-bill financing charges and utility changes in the same proportion such charges comprise of the overall bill total.
- It has been reported that 1 million New York ratepayers are in arrears in their utility bills. It seems inappropriate to create a new funding mechanism that has the potential to push additional ratepayers into arrears, thereby threatening continuation of their utility service.
On-bill financing pilot projects are already underway in New York State, and additional voluntary programs are under development. For example, National Grid offers on bill financing options for small businesses in the upstate New York service territory and is currently negotiating an on bill recovery option pilot with NYSERDA for residential customers. These types of voluntary programs should be allowed to proceed as pilots, without a broad, legislatively mandated program as being proposed in
For these reasons, The business Council respectfully opposes adoption of S.8517/A.11727.