Relates to authorizing installation of capital improvements and fixtures to promote energy efficiency

Summary of provisions

Section 1 of this bill amends Public Service Law (PSL) §65(6) to permit service charges on natural gas bills for the installation of capital improvements and fixtures to promote energy efficiency upon the request and consent of the customer.

Section 2 of this bill provides for an immediate effective date.

Existing law

PSL §65(6) prohibits gas corporations from imposing additional charges or fees for service or for the installation of apparatus, or for the use of apparatus, with certain exceptions. These exceptions include: (1) where entry, inspection or examination of meters, pipes, works, etc. is denied; (2) for reconnection of service after lawful disconnection for non-payment of bills for service; (3) for reasonable expenses incurred in cases of meter tampering or theft of service; and (4) for remote meter reading devices requested by and installed with the consent of the customer. The prohibition on imposing additional charges or fees for gas service or apparatus is intended to ensure that a fair and reasonable price is charged for gas supplied.

Prior legislative history

This is a new proposal.

Statement in support

In June 2008, the Public Service Commission issued a decision establish- ing New York's Energy Efficiency Portfolio Standard (EEPS) (Case 07-M-0548 - Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard) with the goal of reducing forecast elec- tricity usage by 15% statewide by 2015, with comparable results in natural gas conservation. Among proposals to achieve such goals is the installation of energy efficiency improvements (i.e., light bulbs, appliances, HVAC equipment, insulation, weatherization measures). Recog-

nizing that the initial cost of these measures can be high, it is proposed that local electric and gas distribution companies finance the cost of these improvements and equipment, with the customer repaying the loan via a charge to his or her utility bill based on estimated savings.

As noted in Multiple Intervenors v. Public Service Com., 166 A.D.2d 140 (3d Dep't 1991), the courts have permitted such rate charges not direct- ly related to the provision of the utility commodity, including recovery of lost profits and incentive payments for encouraging energy conserva- tion.

Without this amendment, gas customers participating in an on-bill financing program would have to be charged in rates designed on a volu- metric basis linked to the amount of gas commodity consumed. Because customer consumption varies every month, such a rate design would be burdensome to establish and more difficult for customers to understand than a monthly service charge. Electric customers can be charged a monthly service charge. Establishing this narrow exemption would allow gas customers to be treated the same as electric customers for the purposes of on-bill financing of the installation of energy efficiency improvements. The purpose of the prohibition on imposing additional charges or fees for gas service or apparatus, to ensure that a fair and reasonable price is charged for gas supplied, would be maintained as the gas service charge authorized could only be charged upon the request and consent of the customer and because participation would result in gas bills for the customer that are lower than they otherwise would be.

Budget implications

None.

Effective date

This bill would be effective upon enactment.