BILL NUMBER: S9195

SPONSOR: HARCKHAM
 
TITLE OF BILL:

An act to amend the public service law and the public authorities law,
in relation to requiring utility service providers to disclose and
report third-party contracts within a certain amount of time

 
PURPOSE:

Requires utility service providers to disclose and report third-party
contracts within a certain amount of time

 
SUMMARY OF PROVISIONS:

Section 1 amends the public service law by adding new section 28 which
provides that any gass provider of last resort or electric provider of
last resort shall publicly notice each purchase of electricity supply,
energy or capacity, within seven days of purchase. The utility shall
report the following to the department for immediate posting of any
third-party supply purchase: the price, the quantity purchased, and the
              

start and end dates of the contract.

Section 2 amends the public authorities law by adding new subdivision 3
which requires that service providers shall be subject to the provisions
of section 28 of the public service law.

Section 3 states the effective date.

 
JUSTIFICATION:

Electricity costs have been rising quite substantially, in the last ten
months. These price hikes have come with no notice to consumers, who are
therefore unable to plan for stark changes that deeply affect household
budgets. Apart from steady price hikes, on average, rates have been
unpredictable even for professionals in the industry-professionals have
no information on the electricity supply that regulated utilities sign,
in order to serve consumers. Rate changes have been unusually stark from
month-to-month. For example, electricity supply charges in some utili-
ties nearly tripled from one month to the next, stayed at historically
high levels for months, then came back down for a month, without expla-
nation or warning.  Consumers have no idea what the future will hold.

This legislation will solve that problem:

Community Choice Electricity aggregations will be able to predict future
utility prices, as they contract for fixed or less volatile rates for
consumers. Electricity market professionals and consumer protection
organizations will be able to project utility rates reasonably accurate-
ly-not perfectly, but quite well, nonetheless.  Consumers will have
better information, from these consumer protection organizations, to
judge whether a private market supply offer is good or bad. Consumers
will also be better able to budget. Supply companies and Community
Choice aggregations will be able to gain offers from supply companies to
serve low-income consumers, as the Public Service Commission requires
guaranteed savings plans v utility rates, in order to gain permission to
serve low-income consumers.

The ask of utilities is not onerous. It mirrors requirements for Commu-
nity Choice aggregations, which must inform residents in advance, of
price and of how prices will fluctuate over time. It does not require
utilities to name the counter-parties with whom they contract so, coun-
ter-parties will not find their contracts disclosed.  It does not
restrict negotiation because utilities merely need to report on the
terms of any contract, after the contract is signed.  There is nothing
subjective about what is being asked of utilities so, compliance is
objective, simple and verifiable.

With little or no cost to regulated entities and to consumers as a
whole, the bill creates consumer and low-income protection, enhanced and
responsible competition, good governance and transparent behavior in a
regulated market. It effectively addresses many powerful market failures
that have clearly surfaced, recently.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.