Senate Bill S1065

                                BILL NUMBER:S1065

TITLE OF BILL:
An act
to amend the public service law, in relation to the imposition of the
temporary state energy and utility service conservation assessment

PURPOSE OR GENERAL IDEA OF BILL:
To require the temporary state energy
and utility service conservation assessment imposed by the 2009-2010
Executive Budget to sunset on an annual basis.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 provides the "temporary
state energy and utility service conservation assessment" imposed by
the 2009-2010 Executive Budget will sunset annually beginning on or
after March 31, 2010, unless, on or before submission of the
executive budget, the Governor requests the authority in such budget
to continue to impose such assessment for an additional fiscal year.

JUSTIFICATION:
In the 2009-2010 Executive Budget, the utility
regulation assessment imposed by section 18-a of the Public Service
Law was increased 500%.

Historically, the 18-a assessment was a de minimis fee that funded the
              

PSC, which is an independent regulatory body that regulates the
behavior of electric, gas, telecommunications and water utilities on
behalf of the public interest. The 18-a surcharge was established by
statute in an amount that was not to exceed one-third of one percent
of the utilities' intrastate revenues.

The Governor's 2009-2010 Executive Budget increased that fee to one
percent of intrastate revenues, and added an additional 1 percent fee
that was labeled a "conservation assessment." The rationale for the
increased "conservation assessment" was the increased utility prices
would induce consumers to lessen their use of energy, while
simultaneously raising hundreds of millions of dollars of new revenue
for the State's general fund.

The 18-a fee is passed on by utilities to their customers via their
energy bills. The practical effect on consumers is their utility
bills have increased by at least 2%, and in some cases by more. The
practical effect on the general fund is the expanded 18-a fee raised
more than $400 million in revenues in 2009, which were placed in the
general fund to balance the budget.

The 2009-2010 Executive Budget requested the increased 18-a fee from
2009 to 2014. This legislation would require the increased fee to
expire ("sunset") at the end of each fiscal year, unless the Governor
expressly requests legislative authority to renew the fee.

Creating legislative oversight over this fee will ensure the Governor
will not continue to impose this new burden upon New York's energy
consumers once the current budget crises are over.
Moreover, requiring this increase to sunset will make certain the


Governor's fee increase does not permanently increase consumer energy
and, potentially, telecommunications prices.

PRIOR LEGISLATIVE HISTORY:
2009-10:  S.6850 - Referred to Energy & Telecommunications

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately, provided however the amendments to
subdivision 6 of section 18-a of the public service law, made by
section one of this act, shall not affect the expiration and repeal of
such subdivision and shall expire and be deemed repealed therewith.