S T A T E O F N E W Y O R K
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8446
2015-2016 Regular Sessions
I N A S S E M B L Y
October 9, 2015
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Introduced by M. of A. ORTIZ, COLTON, ABINANTI -- read once and referred
to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law, in relation to smart grid
systems
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The public authorities law is amended by adding a new title
13 to article 5 to read as follows:
TITLE 13
NEW YORK STATE SMART GRID SYSTEMS
SECTION 1349-A. LEGISLATIVE INTENT.
1349-B. DEFINITIONS.
1349-C. RECOVERING COSTS.
1349-D. DEPLOYMENT PLAN.
1349-E. ECONOMIC INCENTIVES.
1349-F. INSTALLATION.
1349-G. ELECTRICAL CORPORATION.
1349-H. PROHIBITED REGULATION.
S 1349-A. LEGISLATIVE INTENT. THE LEGISLATURE FINDS AND DECLARES ALL
OF THE FOLLOWING:
1. SMART GRID SYSTEMS THAT ALLOW REAL-TIME, TWO-WAY DIGITAL COMMUNI-
CATIONS BETWEEN ELECTRIC UTILITIES AND THEIR DISTRIBUTION GRID AND WITH
THEIR CUSTOMERS CAN GREATLY IMPROVE THE EFFICIENCY AND RELIABILITY OF
ELECTRICAL DISTRIBUTION SYSTEMS AND FACILITATE CONSERVATION BY ENABLING
REAL-TIME DEMAND RESPONSE PRICING.
2. SMART GRID SYSTEMS CONSTITUTE CRITICAL INFRASTRUCTURE THAT CAN
SUPPORT IMPORTANT HOMELAND SECURITY NEEDS, BOTH BY PROVIDING DISASTER
PREVENTION AND RECOVERY CAPABILITIES TO PROTECT THE STATE'S ELECTRIC
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03583-01-5
A. 8446 2
GRID AND BY ENABLING REMOTE MONITORING OF OTHER CRITICAL INFRASTRUCTURE
AND KEY ASSETS.
3. SMART GRID SYSTEMS WILL PERMIT THE STATE TO TAKE FULL ADVANTAGE OF
DISTRIBUTED GENERATION RESOURCES THAT WILL INCREASE DISTRIBUTION EFFI-
CIENCY, LOWER CUSTOMER PRICES, STIMULATE INNOVATION AND NEW JOB
CREATION, AND ULTIMATELY REDUCE EMISSIONS OF GREENHOUSE GASES AND
DECREASE DEPENDENCE ON FOREIGN OIL.
S 1349-B. DEFINITIONS. FOR PURPOSES OF THIS TITLE, THE FOLLOWING TERMS
HAVE THE FOLLOWING MEANINGS:
1. "ELECTRIC UTILITY" SHALL MEAN AN ELECTRICAL CORPORATION, ELECTRICAL
COOPERATIVE, OR LOCAL PUBLICLY OWNED ELECTRIC UTILITY.
2. "ELECTRICAL DELIVERY SYSTEM" SHALL MEAN THOSE FACILITIES THAT ARE
USED BY AN ELECTRICAL CORPORATION, ELECTRICAL COOPERATIVE, OR LOCAL
PUBLICLY OWNED ELECTRIC UTILITY TO TRANSMIT, DELIVER, OR FURNISH ELEC-
TRICITY TO RETAIL END-USE CUSTOMERS.
3. "SMART GRID SYSTEM" SHALL MEAN A TWO-WAY COMMUNICATIONS SYSTEM AND
ASSOCIATED EQUIPMENT AND SOFTWARE, INCLUDING EQUIPMENT INSTALLED ON THE
ELECTRICAL DELIVERY SYSTEM AND ON THE PREMISES OF RETAIL END-USE CUSTOM-
ERS, THAT UTILIZES THE ELECTRICAL DELIVERY SYSTEM TO PROVIDE REAL-TIME
MONITORING, DIAGNOSTIC, AND CONTROL INFORMATION AND SERVICES THAT
IMPROVE THE EFFICIENCY AND RELIABILITY OF THE DISTRIBUTION AND USE OF
ELECTRICITY, INCLUDING AUTOMATED LOAD CONTROL OR DEMAND RESPONSE, POWER
LOSS DETECTION AND PREVENTION, REMOTE OUTAGE AND RESTORATION DETECTION,
CONTINUOUS REPORTING OF UTILITY AND CUSTOMER DEMAND, DYNAMIC PRICING OF
ELECTRICAL SERVICE, PERFORMANCE MONITORING OF ELECTRICAL DISTRIBUTION
NETWORK EQUIPMENT, AND PREDICTIVE MAINTENANCE AND DIAGNOSTICS. AN ELEC-
TRIC UTILITY MAY TREAT AN ELECTRICAL METER INSTALLED TO ENABLE THE ELEC-
TRICAL DELIVERY SYSTEM TO FUNCTION PROPERLY AS BEING PART OF THE SMART
GRID SYSTEM IF THE METER HAS THE CAPABILITY OF MEASURING AND RECORDING
ELECTRICITY USAGE DATA ON A TIME-DIFFERENTIATED BASIS OF AT LEAST
FIFTEEN MINUTE INTERVALS FOR AT LEAST FOUR SEPARATE TIME SEGMENTS PER
DAY.
S 1349-C. RECOVERING COSTS. 1. IT IS THE POLICY OF THE STATE TO
ENCOURAGE AND, WHERE APPROPRIATE, MANDATE THE UTILIZATION OF SMART GRID
SYSTEMS BY ELECTRIC UTILITIES.
2. AN ELECTRIC UTILITY SHALL RECOVER ITS REASONABLE COSTS FOR PLAN-
NING, BUILDING, AND OPERATING A SMART GRID SYSTEM FROM RATEPAYERS,
INCLUDING ADMINISTRATIVE AND OPERATIONAL COSTS, COSTS FOR SERVICES
RENDERED BY UTILITY EMPLOYEES, CONTRACTORS, AND SUBCONTRACTORS, CAPITAL
INVESTMENT AND DEPRECIATION, TAXES, FINANCING, FINANCIAL INCENTIVES PAID
TO CUSTOMERS FOR PARTICIPATION IN DEMAND RESPONSE, LOAD CONTROL, AND
OTHER CONSERVATION PROGRAMS, AND MARKETING AND ADVERTISING COSTS FOR
SUCH PROGRAMS.
3. AN ELECTRIC UTILITY SHALL RECOVER THE REASONABLE COSTS OF EQUIPMENT
RENDERED OBSOLETE BY DEPLOYMENT OF A SMART GRID SYSTEM, BASED ON THE
REMAINING DEPRECIABLE LIFE OF THE OBSOLETE EQUIPMENT.
4. AN ELECTRIC UTILITY SHALL NOT RECOVER THE COSTS OF EQUIPMENT OR
SOFTWARE FROM RATEPAYERS UNLESS THE EQUIPMENT AND SOFTWARE IS COMPATIBLE
WITH, AND CAPABLE OF INTEROPERATING WITH, A SMART GRID SYSTEM.
5. SUBDIVISION FOUR OF THIS SECTION DOES NOT APPLY IN THE FOLLOWING
SITUATIONS: (A) THE ELECTRIC UTILITY HAS, PRIOR TO FEBRUARY TWENTY-SEC-
OND, TWO THOUSAND TEN, ENTERED INTO A BINDING FINANCIAL COMMITMENT TO
MAKE A PURCHASE OF, OR EXPENDITURE FOR, THE EQUIPMENT OR SOFTWARE THAT
IS NOT COMPATIBLE WITH, OR CAPABLE OF INTEROPERATING WITH, A SMART GRID
SYSTEM.
A. 8446 3
(B) THE EQUIPMENT OR SOFTWARE IS FOR PROVIDING SERVICE IN A GEOGRAPH-
ICAL AREA WHERE THE DEMONSTRATED COST OF DEPLOYING A SMART GRID SYSTEM
EXCEEDS THE REASONABLY ANTICIPATED BENEFITS OF DEPLOYMENT, INCLUDING
BENEFITS TO THE UTILITY, RATEPAYERS, THE ENVIRONMENT, AND HOMELAND SECU-
RITY.
S 1349-D. DEPLOYMENT PLAN. 1. EACH ELECTRIC UTILITY WITH MORE THAN TEN
THOUSAND SERVICE CONNECTIONS SHALL DEVELOP AND ADOPT A SMART GRID SYSTEM
DEPLOYMENT PLAN BY JUNE THIRTIETH, TWO THOUSAND SIXTEEN. AN ELECTRIC
UTILITY WITH TEN THOUSAND OR FEWER SERVICE CONNECTIONS MAY ELECT TO
DEVELOP AND ADOPT A SMART GRID SYSTEM DEPLOYMENT PLAN.
2. EACH ELECTRIC UTILITY SHALL, BY SEPTEMBER THIRTIETH, TWO THOUSAND
SIXTEEN, ISSUE A SMART GRID SYSTEM REQUEST FOR PROPOSALS CONSISTENT WITH
THE DEPLOYMENT PLAN. RESPONDENTS TO A REQUEST FOR PROPOSAL SHALL OFFER
TO SERVE AT LEAST A MAJORITY OF THE ELECTRIC UTILITY'S RESIDENTIAL ELEC-
TRIC SUBSCRIBERS.
3. UNLESS SUBDIVISION FOUR OF THIS SECTION IS APPLICABLE, AN ELECTRIC
UTILITY SHALL MAKE A FINAL SELECTION OF A WINNING RESPONSE TO ITS SMART
GRID SYSTEM REQUEST FOR PROPOSALS NO LATER THAN ONE HUNDRED TWENTY DAYS
AFTER THE DATE THE REQUEST FOR PROPOSALS IS ISSUED. ANY WINNING RESPONSE
SELECTED SHALL PROPOSE TO CONSTRUCT A SMART GRID SYSTEM THAT PROVIDES
SUFFICIENT CAPACITY AND CAPABILITIES TO MEET ANTICIPATED DEMANDS FOR
MANAGEMENT AND CONTROL OF THE ELECTRIC UTILITY'S ELECTRICAL DELIVERY
SYSTEM UNTIL AT LEAST DECEMBER THIRTY-FIRST, TWO THOUSAND THIRTY.
4. AN ELECTRIC UTILITY MAY DECLINE TO SELECT A WINNING PROPOSAL ONLY
IF THERE ARE NO PROPOSALS MEETING THE REQUIREMENTS OF THE REQUEST OR THE
ELECTRIC UTILITY MAKES WRITTEN FINDINGS THAT THE COSTS TO IMPLEMENT ANY
BIDS MEETING THE REQUIREMENTS OF THE PROPOSAL WOULD CLEARLY OUTWEIGH THE
POTENTIAL BENEFITS OF DEPLOYING A SMART GRID SYSTEM, INCLUDING ENVIRON-
MENTAL BENEFITS AND DIRECT AND INDIRECT BENEFITS TO THE UTILITY'S RATE-
PAYERS.
S 1349-E. ECONOMIC INCENTIVES. 1. BY APRIL FIRST, TWO THOUSAND
SIXTEEN, THE COMMISSION SHALL ESTABLISH RULES TO ENSURE THAT ELECTRICAL
CORPORATIONS WITH MORE THAN TEN THOUSAND SERVICE CONNECTIONS HAVE
ADEQUATE ECONOMIC INCENTIVES TO DEPLOY SMART GRID SYSTEMS. THE RULES
SHALL ENCOURAGE ELECTRICAL CORPORATIONS TO DEPLOY SMART GRID SYSTEMS
THAT HAVE SUFFICIENT CAPACITY AND CAPABILITIES TO MEET ANTICIPATED
FUTURE DEMANDS FOR MANAGEMENT AND CONTROL OF THE ELECTRICAL DISTRIBUTION
SYSTEM UNTIL AT LEAST DECEMBER THIRTY-FIRST, TWO THOUSAND THIRTY. THE
ECONOMIC INCENTIVES SHALL, FOR SMART GRID SYSTEMS DEPLOYED ON OR AFTER
DECEMBER THIRTY-FIRST, TWO THOUSAND TEN, INCLUDE ONE OR MORE OF THE
FOLLOWING:
(A) AN ENHANCED RETURN ON ITS REASONABLE CAPITAL EXPENDITURES AND ON A
PORTION OF ITS REASONABLE OPERATIONS AND MAINTENANCE COSTS FOR A SMART
GRID SYSTEM; OR
(B) RETENTION OF A PORTION OF ANY COST SAVINGS ATTRIBUTABLE TO THE USE
OF A SMART GRID SYSTEM.
2. THE GOVERNING BOARD OF AN ELECTRIC UTILITY THAT IS NOT AN ELEC-
TRICAL CORPORATION MAY ESTABLISH INCENTIVES TO DEPLOY SMART GRID SYSTEMS
CONSISTENT WITH SUBDIVISION ONE OF THIS SECTION.
3. AN ELECTRICAL CORPORATION WITH TEN THOUSAND OR FEWER SERVICE
CONNECTIONS MAY FILE AN APPLICATION WITH THE COMMISSION SEEKING AUTHORI-
ZATION TO ESTABLISH INCENTIVES TO DEPLOY SMART GRID SYSTEMS CONSISTENT
WITH SUBDIVISION ONE OF THIS SECTION.
S 1349-F. INSTALLATION. 1. AN ELECTRIC UTILITY OR ITS CONTRACTORS
INSTALLING A SMART GRID SYSTEM SHALL BE PERMITTED ACCESS TO ANY POLES,
DUCTS, CONDUITS, AND RIGHTS-OF-WAY ON TERMS AND CONDITIONS AT LEAST AS
A. 8446 4
FAVORABLE AS THOSE GRANTED TO A HOLDER OF A STATE FRANCHISE. THE RIGHTS
GRANTED BY THIS SECTION DO NOT LIMIT EITHER OF THE FOLLOWING:
(A) ANY RIGHT THAT A UTILITY OR THIRD PARTY INSTALLING A SMART GRID
SYSTEM MAY HAVE TO ACCESS POLES, DUCTS, CONDUITS, AND RIGHTS-OF-WAY
PURSUANT TO CONTRACT OR UNDER ANY OTHER LAW; OR
(B) THE SERVICES THAT MAY BE OFFERED OVER A SMART GRID SYSTEM.
2. A SMART GRID SYSTEM IS AN INTEGRAL COMPONENT OF THE ELECTRICAL
DELIVERY SYSTEM AND THE INSTALLATION OF A SMART GRID SYSTEM SHALL NOT
REQUIRE AN ELECTRIC UTILITY OR ITS CONTRACTOR TO OBTAIN OR EXPAND EASE-
MENTS OR OTHER RIGHTS-OF-WAY OR TO PROVIDE ADDITIONAL CONSIDERATION AS A
RESULT OF THE INSTALLATION OR OPERATION OF THE SMART GRID SYSTEM.
INSTALLATION OF A SMART GRID SYSTEM IS CONSISTENT WITH, AND PART OF, THE
INSTALLATION OF THE ELECTRICAL DISTRIBUTION SYSTEM.
S 1349-G. ELECTRICAL CORPORATION. AN ELECTRICAL CORPORATION MAY ELECT
TO OWN AND OPERATE A SMART GRID SYSTEM ON ITS OWN ELECTRICAL DELIVERY
SYSTEM, OR MAY PERMIT AN AFFILIATED OR UNAFFILIATED ENTITY TO OWN OR
OPERATE THE SMART GRID SYSTEM.
S 1349-H. PROHIBITED REGULATION. A LOCAL MUNICIPALITY SHALL NOT
PROHIBIT OR REGULATE EITHER OF THE FOLLOWING:
(A) THE INSTALLATION OR OPERATION OF A SMART GRID SYSTEM BY AN ELEC-
TRICAL CORPORATION OR ELECTRICAL COOPERATIVE, OR A CONTRACTOR OR AFFIL-
IATE, WITHIN THE SERVICE AREA OF THE ELECTRICAL CORPORATION OR ELEC-
TRICAL COOPERATIVE; OR
(B) THE INSTALLATION OR OPERATION OF A SMART GRID SYSTEM BY A LOCAL
PUBLICLY OWNED ELECTRIC UTILITY, OR A CONTRACTOR, WITHIN THE SERVICE
AREA OF THE UTILITY, WHEN APPROVED BY THE GOVERNING BOARD OF THE UTILI-
TY.
S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law; provided, however, that effective immediate-
ly, the addition, amendment and/or repeal of any rule or regulation
necessary for the implementation of this act on its effective date are
authorized and directed to be made and completed on or before such
effective date.