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History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
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Title of bill
An act to amend the public service law, in relation to the utilization of automatic rate adjustments for natural gas or electric service and providing for the repeal of such provisions upon expiration thereof
Purpose or general idea of bill
This bill would require increased oversight by the Public Service Commission (PSC) regarding the types of costs that are recovered through automatic adjustments to gas and electric rates.
Summary of specific provisions
This bill would:
* permit automatic rate adjustments only when costs are reflective of the reasonable costs of fuel
* limit a gas or electric corporation to one automatic rate adjustment in any six-month period and limits annualized increases associated with automatic rate adjustments to the lesser of $300,000 or 2.5% of the gas or electric corporation's revenues during a 12-month period
* require the PSC to determine if automatic adjustments and utility efforts to control costs are prudent
* if the PSC finds that such provisions would create a substantial impairment of financial impairment to a gas or electric corporation, the commission shall modify the provisions to protect the financial integrity of such corporation.
Justification
Restructuring the electric industry, as implemented administratively by the PSC, was supposed to result in price decreases, not price increases. Since deregulation, electric prices have in fact increased and most industry experts predict higher prices for the next several years. Many are concerned about the potential for extreme price volatility, especially during peak summer demand, because power prices vary with market conditions. Also, demand for electricity is increasing, and the supply of generation seems to be limited, both of which cause upward pressure on power prices. During the summer of 2000, wholesale electricity prices rose to over $1,000 per megawatt-hour. On a normal weather day, this price would be about $30 per megawatt-hour.
Utilities can pass these higher costs on to ratepayers through automatic adjustments, such as "market supply charges" or fuel adjustment charges. This bill would require the PSC to examine the effect of higher prices that are passed on to consumers through these automatic adjustments on customer bills and to ensure that utilities are acting appropriately to provide just and reasonable rates to retail consumers.
Prior legislative history
1999-2000 A.11386 Ways & Means 2001-02 A.8980 Passed Assembly
Fiscal implications for state and local governments
To be determined.
Effective date
Immediate and shall expire and be deemed repealed January 31, 2013.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.