Senate Bill S5009

                                 BILL NUMBER:  S5009

 TITLE OF BILL :
An act to require the public service commission to audit previously
approved utility submetering orders, compare usage before submetering
to usage after submetering orders were implemented, and prepare a
report concerning its findings


 PURPOSE OR GENERAL IDEA OF BILL :
To require the Public Service Commission to perform an audit regarding
submetering orders it has issued in the last five years to determine
compliance by building owners of utility price caps and tenant
protection provisions, and to determine if submetering has resulted in
energy savings in those buildings. The Commission will have twelve
months to complete the audit and make a report to the legislature and
until that time no new submetering orders may be approved.

: Amends the public service laws:

-Requires the Public Service Commission to audit all utility
submetering orders from January 1, 2004 through the effective date of
the act and determine whether utility price caps and tenant protection
provisions have been complied with as well as comparing the rate and
cost of utility usage prior to the submetering order and after the
submetering order;
              

-The audit must be completed within twelve months;
-Requires the Public Service Commission to make a report to the
governor and the legislature of its findings, conclusions, and
recommendations no later than ninety days after completing the audit;
-Prohibits new submetering orders from being approved until the report
is received by the governor and the legislature;
-Act taking effect immediately.

 JUSTIFICATION :
In 1951, the Public Service Commission prohibited all residential
electric submetering, calling the practice "parasitic."  That decision
was held up in courts (Campo Corp. v. Feinberg, 279 App.  Div. 302 (3d
Dept. 1952) affirmed 303 N.Y. 995 (1952). As a consequence, utilities
were directed by the PSC to adopt electric tariffs broadly prohibiting
the resale of utility service. The previously permitted landlord
submetering was converted to direct utility metering.  Subsequently,
the practice of submetering was again allowed by the PSC on a case by
case basis, mainly for residential cooperative and condominium
projects, where tenants have an ownership and governance interest.
Public service commission regulations and numerous orders have allowed
landlords waivers from the general prohibition against resale of
utility service contained in commission regulations and utility
tariffs.  As a result, landlords are being allowed to be monopoly
providers of electric service to their captive tenants. Also, in many
instances the state division of housing and community renewal has
allowed landlords who previously rented with utility service included
in the rent to change the terms of leases so as to shift
responsibility for payment of electric charges from landlords to
tenants.  Recently, submetering has been recast as an environmental
cause, encouraging consumers to conserve energy by making them
directly responsible for the costs associated with their dwelling
unit's energy usage. But as utility costs rise some building owners
have begun to see this as a way to pass high costs on to their
tenants, and as building owners are not obligated to reveal energy
inefficiencies in their buildings as part of their applications (nor
are they required to make efficiency improvements), these costs can be
very high.  This bill will allow the legislature to review the current
practices of submetering and ensure that the goals of energy
conservation are more than theoretical, that tenants are being
protected as per the submetering orders, and that all applicable
utility price caps are adhered to.  If not, the findings and
recommendations of the commission's audit should be helpful in making
a public policy determination of what should happen next on this
subject.

 PRIOR LEGISLATIVE HISTORY :
None.

 FISCAL IMPLICATIONS :
To be determined.

 EFFECTIVE DATE :
This act shall take effect immediately.