Senate Bill S8710

                                 
BILL NUMBER: S8710

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the public service law, in relation to prohibiting the
increase of certain utility charges after twelve months from the time
service was provided

 
PURPOSE:

To restrict the ability of utilities to retroactively increase charges
for service on small non-residential customers to 12 months from the
time that service was rendered.

 
SUMMARY OF PROVISIONS:

Section one adds a new paragraph 2 to section 66-w of the public service
law which prohibits utility corporations and municipalities from upward-
ly adjusting the bills of small non-residential customers after 12
months have passed from the time the service was rendered.  This limit
does not apply if the incorrect bill was caused by the customer's culpa-
              

ble conduct or if there was a dispute between the customer and the util-
ity or municipality during the 12 month period.

Section two states the effective date.

 
JUSTIFICATION:

Back billing is the practice of utility companies retroactively billing
consumers for services rendered but not billed in an appropriately time-
ly manner. For example, a company may fail to bill a consumer for
months, then hit that consumer with a massive one-time charge.

Chapters 763 of 2023 and 62 of 2024 prohibited utility companies from
back billing residential and small non-residential customers beyond
three months past the date of the service rendered. This put a reason-
able limit on utility collection practices that demand excessive
payments from consumers. These chapters were clear to include these
protections for both residential and non-residential customers.

However, this legislation did not address an alternative to back billing
that utilities often use: retroactive bill adjustments. This practice
allows utilities to increase the charges on previous bills, demanding
additional payments above and beyond those already sent out to custom-
ers. For residential customers, this practice is already limited by law
to 12 months after a bill was rendered, meaning a utility cannot
retroactively change a bill more than a year after the initial bill was
sent. But for small non-residential customers, such as a church, there
is currently no limitation under the law. This means that a customer
could pay their bills on time every month and yet, even years after an
initially rendered bill, receive a massive "adjustment" that could jeop-
ardize their finances.

This legislation fixes this disparity by providing small non-residential
customers with the same protection as residential customers: after 12
months from the date of service, utilities are not allowed to retroac-
tively adjust a customer's bill. Providing this protection will give
small non-residential customers the assurance that they won't get retro-
active bills for years' worth of service, and it incentivizes utilities
to correct any billing issues in a timely manner.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately.