Gov. Cuomo plans legislative move to block power companies from raising electrcity rates 12 percent
The Post wrote an article about Governor Cuomo's proposed legislation to give permanent property tax cuts to power companies, removing the option for the rate hikes that FERC passed, which are scheduled to start May 28. The Governor's bill is extremely similar to the bill that I have written on the issue.
ALBANY -- Gov. Cuomo is racing to the rescue of heavily burdened New York City electricity customers who face a massive and unexpected 12 percent rate hike next month, The Post has learned.
Cuomo will introduce legislation "within the next few days" permitting the city to guarantee permanent property-tax abatements to local electric-generating companies, removing the basis for a little-noticed Federal Energy Regulatory Commission decision that could hike electric rates by $500 million a year, aides to Cuomo said.
While the rate hikes are set to take effect on May 28, Cuomo's aides predicted that the commission would reverse its approval at a planned May 19 meeting if the governor's proposal is voted into law.
The Legislature began a 2½-week vacation yesterday but is expected to take up Cuomo's measure when it returns to work on April 25.
Aides to Mayor Bloomberg are working with Cuomo's staff on the legislation, sources said.
"This is a common-sense fix for a problem that could cost New York rate-payers hundreds of millions of dollars per year," said Cuomo spokesman Josh Vlasto.
"We believe that when this change is made and FERC is presented with this new information, there would be no reason not to reverse this [original FERC] decision," Vlasto continued.
The decision resulted from New York City's move in 2008 to change an "as of right" property-tax abatement program for electric-generating companies to a "discretionary" program, meaning existing tax abatements could be repealed at any time.
That action allowed the generating companies to contend they needed to increase rates by as much as $500 million a year in case they lost their tax abatements and were obliged to cover the resultant costs.
Cuomo's proposal will narrowly focus on as-of-right property-tax abatements on power plants and not affect other industrial properties.
A Cuomo aide said the legislation should have no impact on the city's fiscal picture since city officials had planned to provide generating companies with permanent tax abatements.
The massive looming rate hike, which the Post first revealed on April 1, set off a round of condemnations from top public officials including Bloomberg and Sen. Chuck Schumer, who urged FERC to reverse its decision.
"The economic impact of this order on the residents and businesses of New York City would be severe," Bloomberg said
The state Public Service Commission and Con Edison, which distributes power but doesn't generate it, also called on FERC to reverse course.
State Sen. Michael Gianaris (D-Queens), who initially called for state action to overturn the FERC decision, said he was pleased to learn of Cuomo's planned action.
Read the full article here.