Provides that every schedule of rates of gas and electric corporations which is based on operation of over 18 months, shall be reviewed annually

BILL NUMBER:S1979

Title of bill

An act to amend the public service law, in relation to requiring annual reviews of multi-year rate plans

Purpose or general idea of bill

In its January 2007 report, the Assembly Queens Power Outage Task Force recommended several measures to improve oversight of utilities and prevent future blackouts. This bill will restore utility accountability by requiring annual reviews of utility performance under multi-year rate plans.

Summary of provisions

Bill §1 amends paragraph (f) of subdivision 12 of §66 of the Public Service Law to require that any utility rate filing based on future revenues, expenditures and operations for a period of more than 18 months must also include annual revenue and expenditure projections and benchmarks for maintenance and operations, service quality and other items deemed appropriate by the Public Service Commission (PSC). The PSC shall commence a proceeding to review the continued validity of such projections not more than 3 months after the anniversary date of the date such schedule became effective. Participation in this proceeding would be open to each party to the original proceeding and any new parties that are likely to contribute to the development of a complete record. Similar review proceedings shall be commenced in subsequent years of the multi-year rate plan.

Effects of present law which this bill would alter

Current law does not address the diminution of opportunities for PSC and public oversight created by the use of multi-year rate plans.

Justification

Last summer, the western part of Queens suffered a massive power outage that lasted 9 days. The Assembly Queens Power Outage Task Force studied the outage's causes and the inadequate responses by the company responsible for the transmission and distribution system, Consolidated Edison, and by the Public Service Commission. One underlying cause of this debacle was found to be the reliance by New York's utility regulators on antiquated laws, regulations and policies that let companies engaged in energy transmission and distribution operate without effective oversight.

The Task Force found that the increasing use of negotiated multi-year rate plans was undercutting the ability of the PSC, its staff and other interested members of the public to oversee the operations of regulated public utilities. Historically, one of the mainstays of utility regulation was the practice of conducting annual rate cases before the PSC with full involvement of the Consumer Protection Board and other public intervenors. This practice promoted regular, timely and effective feedback on utilities' activities, undertakings and expenditures.

In recent years, the PSC's growing reliance on multi-year rate plans has reduced both the frequency and effectiveness of outside scrutiny of utility performance. The Task Force found that this could be an underlying factor in Consolidated Edison's decisions to defer or minimize maintenance expenditures, potentially compromising the safety and reliability of the grid. This bill will restore the prior practice of more regular and thorough reviews of utility actions under multi-year rate plans, resulting in more attention to service reliability and safety issues.

Prior legislative history

None.

Fiscal implications for state and local governments

None.

Effective date

180th day after enactment; provided that the Public Service Commission is immediately authorized and directed to promulgate rules and take other actions needed to fully implement the bill on such date.