Requires the Long Island power authority to impose time of day rates and charges for gas or electric power

BILL NUMBER:S3668

Title of bill

An act to authorize the Long Island power authority to impose time of day rates and charges for the furnishing or rendition of gas or electric power

Purpose

To reduce electricity costs, ensure the stability of New York's electric grid, and protect the environment by requiring Long Island power Authority rates to reflect shifts in the cost of electricity production throughout the day.

Summary of provisions

Section 1 requires the Long Island power Authority to fix its rates based upon the time of day during which power or services are rendered, upon the expiration of current rates.

Section 2 provides that this act shall take effect immediately.

JUSTIFICATION It is axiomatic that any truly competitive market depends upon an equality in bargaining power between buyers and sellers. Such equality, in turn, requires the parties to have full knowledge of the circumstances surrounding the purchase.

This rule is applicable to the newly-deregulated electric industry to the same extent as any other industry. In order for electricity customers to be able to make educated decisions about electricity purchases, they must be aware of the implications of their own usage patterns, including the impact of those patterns on electricity cost.

This is especially true for customers of the Long Island power Authority ("LIPA"), which routinely imposes artificial price controls to protect LIPA customers. While such controls are important to protect Long Islanders from the negative effects of transmission constraints which would otherwise artificially inflate the cost of electricity on Long Island, they do nothing to encourage consumers to reduce power consumption, or utilize the opportunities of a competitive market to reduce prices.

The implementation of time-of-day rating will have several salutary effects. As noted, it will enable customers to better control the costs of their electricity. This, in turn, will reduce overall power consumption, providing some protection for New York's electric grid against the overload which will result from a continued failure to increase power production in New York. It will also reduce the need to operate the older, less clean power plants which are brought online to address emergency demand, which will help to protect the environment.

Legislative history

2007/2008 - S.2723 2005/2006 - S.4618 2003/2004 - S.4152 2001/2002 - S.7051

Fiscal implications

None.

Effective date

This act shall take effect immediately.