MEMORANDUM IN SUPPORT - S.5484-A (Maziarz)/A.8515 (Kearns)

This memorandum is submitted by Energy Coalition New York in support of the subject bill which caps current surcharges on utility customers and places a moratorium on any new surcharges, taxes or fees.

Energy Coalition New York consists of New York State's major gas and electric utility companies: Central Hudson Gas & Electric Corporation, Consolidated Edison Inc., National Fuel Gas Distribution Corporation, National Grid, New York State Electric & Gas Corporation and Rochester Gas and Electric Corporation. Coalition companies collectively employ more than 32,000 people, service more than 8.5 million customers and pay more than $3 billion in state and local taxes, assessments and fees. The member companies annually invest billions of dollars to make capital improvements to the electric and natural gas infrastructure located in New York State.

The surcharges for the system benefit charge, the renewable portfolio standard and the energy efficiency portfolio standard constitute an increasing portion of every consumer's electric bill. Since each of these surcharges was first imposed, there has been significant growth in these surcharges. This bill would cap the growth of these surcharges based on the total amount collected in 2014. The collective amount of these fees since first enacted represents nearly $3 billion. This bill also places a moratorium on any new assessments or fees, with the exception of fees which might arise in connection with a closure of a generating facility.

This bill would provide an opportunity to examine the cost impacts of current fees on consumers. As the Public Service Commission undertakes its analysis of the current regulatory model, (Utility 2.0) this provides a perfect point in time to cap the continued growth of surcharges until a clearer future regulatory framework is established.

Consumers would welcome the certainty on the cost side of their utility bills. The elasticity in utility bills has been under significant pressure. In addition to the surcharges referenced in the bill, energy tax burdens have escalated to make up more than 26% of the average utility bill. State and local taxes, particularly real property taxes and fees, continue on an upward trajectory. This measure would help to partially stabilize this situation. The Legislature would become part of the decision-making process to increase surcharges and assessment.

Based on the foregoing, Energy Coalition New York respectfully requests favorable action to be taken on this legislation.