Senate Bill S8967

                                
 
BILL NUMBER: S8967

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the public service law, in relation to increasing penal-
ties for certain violations committed by combination gas and electric
corporations

 
PURPOSE OR GENERAL IDEA OF BILL:

Increases the maximum penalty for violations related to combination
electric and gas utilities' failures to protect the overall reliability
and continuity of electric service.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision 5 of section 25-a of the public service law
to increase the maximum penalty for violations by combination gas and
electric corporations related to failures to protect the overall reli-
ability and continuity of electric service from the greater of $500,000
              

or 0.04% of intrastate gross operating revenues, to the greater of
$500,000 or 0.2% of intrastate gross operating revenues.

Section 2 sets the effective date.

 
JUSTIFICATION:

Following storms Quinn and Riley the Public Service Commission (PSC)
conducted an inquiry into the emergency response performance of Con
Edison and one of its affiliates. The result was a settlement with
respect to the alleged violations of the companies, and in its decision,
the PSC cited the the current statutory penalty for violations resulting
in service interruptions as a factor in determining the appropriate
settlement amount, and the potential for a higher recovery had the
action been pursued further.

Notwithstanding the alleged (and in some cases, admitted) violations on
the part of Con Edison with respect to an inadequate emergency response
plan, customers experienced sustained outages and insufficient communi-
cations in following Tropical Storm Isaias. This suggests that penalties
are insufficient to incentivize a change in behavior, and that they may
be viewed as simply a cost of doing business. The current statutory
penalty for violations relating to the reliability and continuity of
electric service is the greater of $500,000 or 0.04% of gross intrastate
operating revenue. This bill would increase the penalty to be the great-
er of $500,000 or 0.2% of gross intrastate operating revenue, allowing
for penalties up to five times higher. Increasing the penalties will
increase the pressure on electric utilities like Con Edison to strength-
en their emergency response plans and commit to providing reliable
service, rapid restoration, and meaningful communication when outages
occur.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.