Senate Bill S1226

                                BILL NUMBER:S1226

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:
2011-12:  Referred to Energy & Telecommunications (S.1397)
2009-10:  Referred to Energy & Telecommunications (S.5009)

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect immediately.