Senate Bill S7278

                                 BILL NUMBER:  S7278

 TITLE OF BILL :

An act to amend the public service law, in relation to prices, rates
and charges


 PURPOSE OF THE BILL :

This bill would encourage additional gas and electric utility rate
stability through multi-year rate proceedings.

 SUMMARY OF PROVISIONS :

Section 1 of the bill would amend Public Service Law (PSL) § 66(12)(h)
to clarify that the Public Service Commission (Commission) has the
authority to set rates for up to three years in addition to setting
temporary rates for any period during which a rate increase is
suspended in accordance with PSL § 72.

Section 2 of the bill would amend PSL § 66(12)(k) to clarify that the
Commission may undertake proceedings to set multi-year rates, in
response to a rate petition, for a fixed period not to exceed three
years in duration. This section of the bill would also provide that,
when rates are established for more than one year, utilities would be
              

limited to filing for a rate increase no sooner than the start of the
11-month period preceding the end of such fixed period, except as
otherwise authorized by the Commission.

Section 3 of the bill would provide for an immediate effective date.

 EXISTING LAW :

PSL § 66 establishes the general powers of the Commission with regard
to gas and electric service. PSL § 66(12) sets forth requirements and
process for rate proceedings. PSL § 72 provides additional notice,
hearing and process requirements, and authorizes the Commission to set
rates for gas and electric service; in response to a complaint or upon
its own initiative, for a period not to exceed three years, and to
approve temporary rate increases or decreases. PSL §§ 113 and 114
provide additional requirements for establishment of temporary rates,
reparations and refunds.

 LEGISLATIVE HISTORY :

This is new legislation.

 STATEMENT IN SUPPORT :

This bill would make clear that the Commission has the authority to
set rates for up to three years. The establishment of rates for a
period of this length would enable the Commission to better align
rates with utilities' business plans, infrastructure development and
program implementation. Multi-year rate plans can provide rate
stability and certainty, which is beneficial to residential,
commercial, and industrial customers. These plans also may result in
an increase in the regulatory lag between rate cases, thus producing
added incentives for utility efficiency and productivity.
Additionally, transaction costs associated with annual rate cases,
which may be recovered from ratepayers, may also be reduced,

Historically, multi-year rate plans arose from joint proposals
negotiated by parties in a rate case and submitted to the Commission
for consideration. This bill would statutorily encourage the use of
such plans, allowing the Commission to flow through the benefits,
including reduced costs resulting from fewer rate proceedings, to the
utilities' customers.  Utilities would not be precluded from
petitioning for rate relief prior to the end of the rate period as
they would be allowed to file such a request, consistent with the
Commission's rate order.

 BUDGET IMPLICATIONS :

This bill may initially require reallocation of staff resources to
administratively litigate multi-year plans rather than single-year
plans. However, it is anticipated that such multi-year rate plans will
help to strategically plan and manage Department of Public Service
resources as significant rate case pressures occur.

 EFFECTIVE DATE :
This bill would take effect immediately.