Senate Bill S8491A

                                 
BILL NUMBER: S8491A

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the public service law, in relation to denials of
increased utility rates and charges

 
PURPOSE:

Mandates that utility rates and charges that are in effect prior to the
denial of a request for an increase rate, charge, or service remain in
effect until the Public Service Commission approves a new rate, charge
or service.

 
SUMMARY OF PROVISIONS:

Section 1 amends paragraph (j) of subdivision 12 of section 66 of the
Public Service Law to add language requiring whenever the Public Service
Commission denies a request by a utility for major rate increase, the
prior rate, shall remain in full force and effect until the commission
approves a new rate.
              

Section 2 is the effective date which is immediately and shall apply to
all requests by a utility for a major change in rates or charges filed
after such date.

 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION:

The A print changes the section of law that this legislation amends and
clarifies that this legislation would not affect an ongoing rate case.

 
JUSTIFICATION:

Under the current Public Service Law, when a utility company files for a
rate increase, the Public Service Commission reviews the request and
votes on a Joint Proposal or Recommended Decision. However, if a majori-
ty of Commissioners vote to deny that Proposal or Decision without an
alternative action in place, the utility's original rate increase
request would automatically go into effect. This procedural gap creates
a significant risk that rate increases would be implemented without
proper review and undermines the regulatory process in place to protect
ratepayers. Immediate legislative action is needed to close this danger-
ous gap and prevent unapproved rate increases from being forced upon
consumers.

In 2023, Central Hudson, a utility in the Mid-Hudson Valley, filed for
substantial increases in delivery rates-32% for electric and 29% for
gas. The rate case moved through litigation, and after careful review,
the Administrative Law Judge recommended reducing the original rate
increases by 16%. The Public Service Commission (PSC) took further
steps, lowering the final increase to just 5%. However, under the
current Public Service Law, if the majority of the PSC had denied the 5%
increase without proposing an alternative, Central Hudson's original
request would have automatically gone into effect, resulting in a very
significant rate hike. Such a situation is unreasonable and poses an
unnecessary risk to consumers, and it is something New York State must
ensure never happens.

This bill will relieve the Commission of the undue burden of having to
propose an alternative rate plan if they decide to deny the pending rate
increase. It eliminates this problematic "Sophie's Choice" and provides
the PSC with greater flexibility to perform its role more effectively at
the conclusion of any rate case.

 
LEGISLATIVE HISTORY:

None. New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all requests
by a utility for a major change in rates or charges filed after such
date.