§ 66-h. Certain electric corporations; payment equivalent to tax. The
commission shall require each electric corporation that purchases
electricity from an energy business as defined in subdivision (c) of
section three hundred one-i of the tax law (1) that is a co-generation
facility, as such term is defined in subdivision two-a of section two of
this chapter, or (2) that is a qualifying facility, as such term is
defined by section two hundred one of the Public Utility Regulatory
Policies Act of 1978 (Public Law 95-617) that is a co-generation
facility, or (3) that has executed or will execute a contract for the
sale of electricity through negotiation with an electric corporation or
an auction conducted by an electric corporation pursuant to a
competitive bidding plan approved by the commission, to pay, in addition
to payments made for such purchased electricity under a contract with
such electric corporation, (i) an amount equal to the tax imposed under
article thirteen-A of the tax law with respect to each Mcf of natural
gas used to generate such electricity and (ii) with respect to contracts
for the sale of electricity and/or steam executed prior to January
first, two thousand, any sales and compensating use taxes imposed on
natural gas used in the production of electricity and/or steam by or
pursuant to the authority of section eleven hundred seven or subdivision
(a) of section twelve hundred ten of the tax law, unless such sales and
compensating use taxes imposed are otherwise accounted for in the
payments the electric corporation makes under that contract; provided,
however, that any such amount paid by such electric corporation shall be
recovered through a fuel adjustment mechanism authorized by the
commission; provided, further, that such amount shall not be recovered
from charges for residential use provided by such electric corporation.