Relates to the establishment of reduced residential rates for electric and natural gas service to low-income customers

Paragraph (a) provides for the state's electric and gas corporations to establish and continue reduced rate schedules for low-income customers of between 25% to 35% of applicable charges.

Paragraph (b) sets forth the eligibility criteria for such reduced rates, to be established for any customer who receives benefits from Supplemental Social Security for the Aged or Disabled, Temporary Assistance to Needy Families, Safety Net Assistance, Supplemental Nutrition Assistance (SNAP), medical assistance, Home Energy Assistance (HEAP), telephone Lifeline Assistance and any additional programs or higher income standards approved by the Public Service Commission (PSC).

Paragraph (c) requires providers of electric and gas service to cooperate with the PSC and local social service districts and other agencies in the certification and recertification of eligible customers.

Paragraph (d) sets forth criteria for application forms and the provision of information regarding the availability of reduced rates.

Paragraph (e) directs the PSC to mitigate the impact of such reduced residential rates to eligible customers through various mechanisms at the disposal of the PSC within its regulatory and rate setting authority.

Section 2 amends Article 4 of the Public Service Law by adding a new section 66-0, under the General powers of commission in respect to gas and electricity, to make conforming changes to the law. It also requires that such reduced rates shall be effective no later than January 1, 2016 and that the PSC shall file periodic reports, at least annually, regarding the number of eligible customers receiving reduced rates and utility efforts to provide such rates to eligible customers.

Section 3 of the bill is the effective date.

Justification

Utility service is an absolute necessity of life, regardless of a household's income level. Lives are threatened when people don't have safe, reliable access to electricity, heating, and water supply. Society pays dearly when terminations occur. These added costs are reflected in higher emergency public assistance and medical care, increased homelessness, the illness or death of vulnerable people, and the cost of putting out fires due to the use of other means of light and heat such as the use of candles.

New York electric utility rates for residential customers are 59% higher than the national average. That is simply not affordable for many customers.

Furthermore, in 2014, New York State's electric and gas utilities issued 7.2 million shutoff notices and shut off service to 268,000 customers as a bill collection measure. The state's largest energy utility, Con Edison, issued 2.8 million shutoff notices and shut off service to 82,000 customers in 2014.

Shutoff notices place many customers with unaffordable bills in jeopardy of losing essential utility services. In addition, threats of utility shutoffs add extreme stress and compound many families' and seniors' already precarious financial circumstances. Utility shutoff threats and actual shutoffs often can spiral into crisis situations, create dangerous conditions in homes and apartment building, which could result in the loss of life or other serious harm to customers and their neighbors.

Typically, shutoff notices and shutoffs surge in the months of April, May, and June, otherwise known as "Shutoff Season." Consequently, it becomes even more important that low-income customers, eligible seniors and disabled persons and others who are eligible for assistance receive some relief from New York's utility rates, which are the highest in the nation.

In the light of these facts, in 2014 the draft State Energy Plan recommended that New York institute a more robust low-income rate program, similar to California's CARES program, which requires a 35% rate reduction for low-income customers.

The legislation is necessary to assist New York families, seniors, the disabled and other low-income persons and cushion them from New York's inordinately high electric and gas rates, which will in turn protect them and the State's finances from the hardships and costs that ensue when people's utility service is not affordable.

Legislative history

This is a new bill.

Fiscal implications for state and local governments

None. Significant savings to consumers on a low- or fixed-income through the creation of reduced rates for these eligible consumers. In addition, the bill would reduce expenditures to the state and localities for emergency utility assistance provided under Social Services Law 131-s, by reducing the need for, and the amount of such assistance. That program requires payment of up to four months bills for applicants whose service is, or is about to be, shut off for nonpayment. The low-income rates proposed in the bill should enable many customers to avoid seeking assistance, and for those who do, the amount of aid needed will be significantly less.

Effective date

This act shall take effect on the sixtieth day after enactment.