S T A T E   O F   N E W   Y O R K
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                                  1597

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  M.  of  A.  GIANARIS, NOLAN, MARKEY, ROSENTHAL, PHEFFER,
  BENEDETTO, FIELDS, ROBINSON, MAISEL, DIAZ, JAFFEE, COOK -- Multi-Spon-
  sored by -- M. of A. BOYLAND, CYMBROWITZ,  DESTITO,  DINOWITZ,  GALEF,
  GOTTFRIED, McENENY, PERRY, REILLY, SAYWARD, SWEENEY, TOWNS, WEISENBERG
  -- read once and referred to the Committee on Energy

AN  ACT  to  amend  the public service law, in relation to requiring the
  franchise certificate of every steam, gas or electric  corporation  to
  be reviewed by the public service commission once every ten years

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 68 of the public service law, as amended by chapter
52 of the laws of 1940, is amended to read as follows:
  S 68. Approval of incorporation and franchises; certificate. 1. No gas
corporation or electric corporation shall begin construction  of  a  gas
plant or electric plant without first having obtained the permission and
approval of the commission. No such corporation shall exercise any right
or  privilege  under any franchise hereafter granted, or under any fran-
chise heretofore granted but not heretofore actually exercised,  or  the
exercise  of  which  shall  have  been suspended for more than one year,
without first having obtained the permission and approval of the commis-
sion. Before such certificate shall be issued a certified  copy  of  the
charter  of such corporation shall be filed in the office of the commis-
sion, together with a verified statement of the president and  secretary
of the corporation, showing that it has received the required consent of
the  proper  municipal  authorities.  The commission shall have power to
grant the permission and approval herein  specified  whenever  it  shall
after  due  hearing determine that such construction or such exercise of
the right, privilege or franchise is necessary  or  convenient  for  the
public  service. Except as provided in article fourteen-a of the general
municipal law, no municipality shall build,  maintain  and  operate  for

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD03846-01-9

A. 1597                             2

other  than  municipal purposes any works or systems for the manufacture
and supplying of gas or electricity  for  lighting  purposes  without  a
certificate  of  authority granted by the commission. If the certificate
of  authority  is refused, no further proceedings shall be taken by such
municipality before the commission, but a new application  may  be  made
therefor after one year from the date of such refusal.
  2.  EVERY  CERTIFICATE  ISSUED  UNDER  SUBDIVISION ONE OF THIS SECTION
SHALL BE REVIEWED IN A TEN-YEAR CYCLE ACCORDING  TO  A  SCHEDULE  ESTAB-
LISHED  BY THE COMMISSION. SUCH SCHEDULE SHALL REQUIRE REVIEWS ACCORDING
TO THE FOLLOWING SEQUENCE: FIRST, GAS CORPORATIONS AND  ELECTRIC  CORPO-
RATIONS ENGAGED IN TRANSMISSION AND DISTRIBUTION OF GAS AND/OR ELECTRIC-
ITY  IN  ONE  OR  MORE  MUNICIPALITIES IN THE FIRST JUDICIAL DEPARTMENT;
SECOND, GAS CORPORATIONS AND ELECTRIC  CORPORATIONS  ENGAGED  IN  TRANS-
MISSION OR DISTRIBUTION OF GAS AND/OR ELECTRICITY IN ONE OR MORE MUNICI-
PALITIES  IN  THE  SECOND  JUDICIAL  DEPARTMENT  NOT PREVIOUSLY REVIEWED
DURING THE CURRENT CYCLE; THIRD, GAS CORPORATIONS  AND  ELECTRIC  CORPO-
RATIONS ENGAGED IN DISTRIBUTION OF GAS AND/OR ELECTRICITY IN ONE OR MORE
MUNICIPALITIES  IN THE THIRD JUDICIAL DEPARTMENT NOT PREVIOUSLY REVIEWED
DURING THE CURRENT CYCLE; AND  FOURTH,  GAS  CORPORATIONS  AND  ELECTRIC
CORPORATIONS ENGAGED IN DISTRIBUTION OF GAS AND/OR ELECTRICITY IN ONE OR
MORE  MUNICIPALITIES  IN  THE  FOURTH JUDICIAL DEPARTMENT NOT PREVIOUSLY
REVIEWED DURING THE  CURRENT  CYCLE.    NOTWITHSTANDING  THE  FOREGOING,
NEITHER  CERTIFICATES  OF AUTHORITY ISSUED TO A MUNICIPALITY PURSUANT TO
SUBDIVISION ONE OF THIS SECTION NOR TRANSMISSION OR DISTRIBUTION FACILI-
TIES OPERATED PURSUANT TO TITLE ONE-A OF  ARTICLE  FIVE  OF  THE  PUBLIC
AUTHORITIES LAW SHALL BE SUBJECT TO REVIEWS UNDER THIS SECTION.
  3.  EACH  SUCH  REVIEW SHALL CONSIDER THE RECORD OVER THE PREVIOUS TEN
YEARS OF THE GAS OR ELECTRIC  CORPORATION  IN  MEETING  ITS  OBLIGATIONS
UNDER  SECTION  SIXTY-FIVE  OF  THIS ARTICLE TO FURNISH AND PROVIDE SUCH
SERVICE, INSTRUMENTALITIES AND FACILITIES AS SHALL BE SAFE AND  ADEQUATE
AND IN ALL RESPECTS JUST AND REASONABLE, AND WHETHER, UPON CONSIDERATION
OF  SUCH RECORD, THE GAS OR ELECTRIC CORPORATION SHOULD HAVE ITS CERTIF-
ICATE RENEWED FOR AN ADDITIONAL  TEN-YEAR  PERIOD.  THE  COMMISSION  MAY
APPROVE  SUCH  RENEWAL UNCONDITIONALLY, OR MAY PRESCRIBE SUCH CONDITIONS
AS THE COMMISSION DEEMS NECESSARY AND APPROPRIATE  TO  ENSURE  THAT  THE
PUBLIC INTEREST IS SERVED. IN FURTHERANCE OF SUCH REVIEW, THE COMMISSION
SHALL  DIRECT  THE STAFF OF THE DEPARTMENT TO PREPARE A REPORT PROVIDING
DETAILED INFORMATION  COVERING  THE  PREVIOUS  TEN-YEAR  PERIOD  ON  THE
FOLLOWING:
  (A)  THE  CONDITION OF THE CORPORATION'S TRANSMISSION AND DISTRIBUTION
SYSTEM;
  (B) THE ADEQUACY OF CAPITAL AND MAINTENANCE EXPENDITURES MADE  BY  THE
GAS OR ELECTRIC CORPORATION;
  (C) THE NUMBER, EXTENT AND DURATION OF SERVICE INTERRUPTIONS;
  (D)  THE  NUMBER  AND  NATURE  OF  DEATHS AND INJURIES ATTRIBUTABLE TO
NEGLIGENT OR UNSAFE OPERATION OF THE SYSTEM;
  (E) THE EXTENT AND DEGREE TO WHICH THE CORPORATION FAILED TO MEET  ANY
SERVICE QUALITY STANDARDS; AND
  (F) SUCH OTHER MATTERS AS THE COMMISSION MAY PRESCRIBE.
  4.  AT  THE  TIME  OF  SUCH  REVIEW, THE COMMISSION SHALL CONSIDER ANY
APPLICATIONS BY QUALIFIED ENTITIES TO ASSUME MANAGEMENT RESPONSIBILITIES
FOR THE OPERATION OF THE TRANSMISSION AND DISTRIBUTION  SYSTEM,  OR  FOR
ONE  OR  MORE  COMPONENTS  OF  SUCH SYSTEM, INCLUDING BUT NOT LIMITED TO
TRANSMISSION AND DISTRIBUTION FACILITIES PROVIDING  SERVICE  TO  ONE  OR
MORE  ZONES  OR AREAS WITHIN THE OVERALL SERVICE TERRITORY OF THE GAS OR
ELECTRIC CORPORATION. THE COMMISSIONER SHALL  REVIEW  SUCH  APPLICATIONS

A. 1597                             3

AND  DETERMINE  WHETHER  TRANSFER OF MANAGEMENT RESPONSIBILITIES FOR THE
SYSTEM OR PART OF THE SYSTEM TO A  QUALIFIED  ENTITY  WOULD  BE  IN  THE
PUBLIC  INTEREST;  PROVIDED, HOWEVER, THAT IN REVIEWING APPLICATIONS FOR
TRANSFER  OF MANAGEMENT RESPONSIBILITY FOR PARTS OF SYSTEMS, THE COMMIS-
SION SHALL CONSIDER THE IMPACT ON CUSTOMERS SERVED BY OTHER PARTS OF THE
SYSTEM, INCLUDING BUT NOT LIMITED TO THE IMPACT ON RURAL AREAS AND  LOW-
INCOME COMMUNITIES, AS WELL AS ON THOSE SERVED BY THE PARTS PROPOSED FOR
TRANSFER.  UPON  DETERMINING  THAT  THE  PUBLIC INTEREST WOULD BE SERVED
THEREBY, THE COMMISSION SHALL ISSUE A CERTIFICATE OF  AUTHORITY  TO  THE
QUALIFIED  ENTITY FOR THE OPERATION OF THE TRANSMISSION AND DISTRIBUTION
SYSTEM, OR COMPONENT OR COMPONENTS  OF  SUCH  SYSTEM,  PURSUANT  TO  THE
PROVISIONS OF SUBDIVISION ONE OF THIS SECTION AND SUCH ADDITIONAL CONDI-
TIONS  AS  THE  COMMISSION  SHALL  PRESCRIBE. A CERTIFICATE OF AUTHORITY
ISSUED TO A QUALIFIED ENTITY SHALL BE SUBJECT TO THE REVIEW REQUIREMENTS
OF THIS SECTION.
  5. THE COMMISSION SHALL MAKE THE REPORT PREPARED PURSUANT TO  SUBDIVI-
SION THREE OF THIS SECTION AND APPLICATIONS OF QUALIFIED ENTITIES PURSU-
ANT  TO SUBDIVISION FOUR OF THIS SECTION AVAILABLE FOR PUBLIC REVIEW AND
INSPECTION IN WRITTEN AND ELECTRONIC FORMATS, AND SHALL PROVIDE OPPORTU-
NITIES FOR PUBLIC COMMENT ON THE RENEWAL OF A  CERTIFICATE  AND  ON  ANY
SUCH  APPLICATIONS  IN  A  MANNER CONSISTENT WITH THE REQUIREMENTS FOR A
MAJOR CHANGE IN SECTION SIXTY-SIX OF THIS ARTICLE.
  6. THE COMMISSION  SHALL  PROMULGATE  REGULATIONS  SETTING  FORTH  THE
REQUIREMENTS  FOR  THE  REVIEW PROCESS, INCLUDING BUT NOT LIMITED TO THE
SCHEDULE FOR REVIEW, THE INFORMATION  TO  BE  PRESENTED  IN  THE  REPORT
REQUIRED BY SUBDIVISION THREE OF THIS SECTION, THE QUALIFICATIONS NEEDED
TO  SUBMIT  AN APPLICATION PURSUANT TO SUBDIVISION FOUR OF THIS SECTION,
AND THE PROCESS FOR TRANSFERS OF MANAGEMENT RESPONSIBILITIES.
  S 2. Section 81 of the public service law, as amended by  chapter  134
of the laws of 1921, is amended to read as follows:
  S 81. Approval of incorporation and franchises; certificate.  No steam
corporation  shall  begin  construction  of  a steam plant without first
having obtained the permission and approval of the commission.  No  such
corporation  shall  exercise  any right or privilege under any franchise
hereafter granted, or under any franchise  heretofore  granted  but  not
heretofore  actually exercised, or the exercise of which shall have been
suspended for more than one year,  without  first  having  obtained  the
permission and approval of the commission. Before such certificate shall
be  issued  a certified copy of the charter of such corporation shall be
filed in the office of the commission, together with a  verified  state-
ment  of the president and secretary of the corporation, showing that it
has received the required consent of the proper  municipal  authorities.
The  commission  shall  have  power to grant the permission and approval
herein specified whenever it shall after due hearing determine that such
construction or such exercise of the right, privilege  or  franchise  is
necessary or convenient for the public service.
  EVERY CERTIFICATE PURSUANT TO THIS SECTION SHALL BE REVIEWED EVERY TEN
YEARS.  THE COMMISSION SHALL PROMULGATE REGULATIONS GOVERNING THE REVIEW
PROCESS THAT SHALL BE SUBSTANTIALLY SIMILAR TO THOSE PROMULGATED  PURSU-
ANT TO SUBDIVISION SIX OF SECTION SIXTY-EIGHT OF THIS CHAPTER.
  No  municipality  shall  build,  maintain  and  operate for other than
municipal purposes any works or systems for the manufacture and  supply-
ing  of steam for purposes without a certificate of authority granted by
the commission. If the certificate of authority is refused,  no  further
proceedings  shall  be taken by such municipality before the commission,

A. 1597                             4

but a new application may be made therefor after one year from the  date
of such refusal.
  S  3.  This  act  shall  take  effect  immediately. The public service
commission shall  promulgate  regulations  necessary  to  implement  the
provisions of this act not later than one year after its effective date,
and shall provide for the review of steam corporations, gas corporations
and  electric  corporations engaged in the transmission and distribution
of steam, gas and/or electricity in one or more  municipalities  in  the
first  judicial department to commence not later than one year after the
effective date of such initial regulations.