Senate Bill S7537

                                BILL NUMBER:S7537

TITLE OF BILL:  An act directing the public service commission to
investigate the use of funds from the Systems Benefits Charge to cover
costs associated with a new capacity zone

PURPOSE:  Directs the public service commission to investigate the use
of funds from the System Benefits Charge to cover costs associated
with a new capacity zone

SUMMARY OF PROVISIONS:

Section 1 compels the public service commission, within 30 days of the
effective date of this act to investigate the development of a program
to use funds collected for the system benefits charge to pay the
portion of consumers bills that results from FERC Docket No.
ER13-1380-000 that ordered a new capacity zone to be created in New
York State. The Public Service Commission would have to consult with
the New York State Energy Research and Development Authority
(NYSERDA). The proceeding must be completed within 90 days from the
commencement of the proceedings. The PSC must also conduct at least
two public hearings within the area that comprises the new capacity
zone.

Section 2 sets an immediate effective date

              

JUSTIFICATION:  The Federal Energy Regulatory Commission (FERC) has
allowed the New York Independent System Operator (NYISO) to create a
new capacity zone in southeastern New York that would mandate local
utility providers to purchase energy resources from producers within a
specific geographic region. The new capacity zone has the potential to
cost residential, commercial, and industrial customers in the lower
Hudson Valley up to $350 million in additional electric bills.  If
unchecked, the new capacity zone will drive families and businesses
out of the state due to unbearable costs.

In 1996, the New York State Public Service Commission (PSC) called for
the establishment of a System Benefits Charge (SBC) to fund public
policy initiatives that could not be adequately addressed directly by
New York State's electricity markets. The PSC has used the funds from
this charge for energy programs targeting efficiency measures,
research and development, and helping to reduce the cost of energy for
low-income New Yorkers. The goals of the SBC exactly match the
challenges of the new capacity zone for southeastern New York. It is
only appropriate that the PSC work with NYSERDA to listen to the
public and develop a sensible alternative to prevent a $350 million
increase in utility bills for residents of the Hudson Valley and
Upstate New York.

LEGISLATIVE HISTORY: This is a new bill.

LOCAL FISCAL IMPLICATIONS:  Using the System Benefits Charge to pay
for the increased utility costs will save residents and businesses of
the lower Hudson Valley up to $350 million in increased utility costs.

EFFECTIVE DATE:  This act shall take effect immediately.