Enacts small business utility boards act to advocate for small business interests

1 Co-sponsor

• Ruben Diaz

BILL NUMBER:S1839

Title of bill

An act creating not-for-profit small business utility boards to advocate small business utility consumer interests

Summary of provisions

This bill creates not-for-profit corporations to be known as the Small Business Utility Board, Inc. in the service areas of the nine major electric and gas utilities and three major telephone utilities. The Boards are charged with representing the interests of small business in electricity, gas, and telephone rate making proceedings before the PSC, as well as before regulatory agencies.

Membership is open to all small businesses (as defined in the bill) in each of the designated utility service areas. Membership dues will be at least $10 per year. The corporations are authorized to solicit member- ship through enclosures in utility billing envelopes no more than four times each year and within certain printing and weight limitations.

The Board of Directors of each corporation shall consist of twelve small business owners/operators. Terms shall be for three years, and election of one third of the Board shall take place annually. The Board of Directors may nominate candidates for election, and interested members may seek nomination through a petition process.

The Board must approve an annual budget for the corporation, and make an annual report to the members. The Board is authorized to hire such staff as is deemed necessary to fulfill these mandates.

Provisions are made for the dissolution of each corporation in the event membership levels are insufficient to support continued operation of the corporation.

Justification

Over the past few years industrial and residential utility customers have increased their representation at regulatory proceedings before the Public Service Commission (PSC). Yet small business (or small commercial class), utility consumers have not become active participants. While there are private groups to represent industrial and residential customers, and the Consumer Protection Board and the Department of Law intervene on behalf of residential customers, rarely is the small business voice heard. A search through recent rate increase hearings for four major electric utilities found not one person or group intervening on behalf of New York's small business community.

Small businesses are no different than any other class of utility customer in that they too, depend on a steady and reasonable priced supply of energy for their livelihood. It is no secret that customers that are actively represented in rate making cases are able to structure a negotiated result and those who are not represented often

end up bearing a disproportional share of the burden. Studies by J. W. Wilson and Associates (for the U.S. Small Business Administration) and Cabot Consulting Group (for the National Federation of Independent Business) stress the lack of representation of small businesses before regulatory bodies as the prime reason for the higher rates paid by this customer class. Small Businesses do not currently have the resources to organize effectively to represent themselves before the PSC. Therefore, setting up private, not-for-profit Small Business Utility Boards governed and supported by the small business community in different utility service areas of the State would provide small business with a much-needed voice before the PSC at no cost to the State.

Fiscal implications

03/16/10 Referred to Corporations, Authorities & Commissions 06/03/10 Reported and Committed to Finance 01/06/10 Referred to Corporations, Authorities & Commissions

Fiscal implications

None to the State.

Effective date

This act shall take effect immediately.