What's happening
This bill requires electric and gas utilities in New York to provide reduced rates to low-income residential customers and sets standards for eligibility, rate reduction levels, and cost recovery.
Why it matters
Establishes concrete eligibility criteria tied to existing social support programs. , ensuring that a broad range of low-income New Yorkers—such as those on SSI, SNAP, HEAP, Medicaid, and similar benefits—will automatically qualify for utility bill relief, reducing administrative barriers to access.
Mandates a significant reduction in energy bills (25–35%) for qualifying households. , which could substantially reduce energy poverty, help families avoid utility shutoffs, and free up household income for other essentials like food or rent.
Imposes safeguards on how utilities recover lost revenue. , requiring that the financial impact of reduced rates be offset first by utility overearnings, unused surcharges, and executive compensation cuts—before any costs are shifted to other customers, and even then, ensuring no single customer class bears the full burden.
Compels utilities and regulators to proactively enroll eligible customers and regularly report on program participation and outreach. , aiming for comprehensive access and ongoing transparency in how the rate reductions are implemented and who benefits.
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Who cares
Headline styles
Cut Utility Bills for Poor
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Lower Utility Bills for Poor
In Assembly Committee · Energy · Sponsor Jeffrey Dinowitz
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2878
2017-2018 Regular Sessions
IN SENATE
January 18, 2017
Introduced by Sens. PARKER, COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public service law, in relation to the establishment of reduced residential rates for electric and natural gas service to low-income customers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 65 of the public service law is amended by adding a new subdivision 16 to read as follows:
16. Reduced residential rates for electric and natural gas service to low-income customers. (a) Electric and gas corporations shall establish and continue reduced rate schedules for low-income electric and natural gas customers. The average effective rate reduction shall not be less than twenty-five percent or more than thirty-five percent of the revenues that would have been produced for the same billed usage by other residential customers receiving full service from the utility who are not eligible for the reduced rate.
(b) Reduced residential rates for electric and natural gas service shall be established for any customer who receives benefits from the supplemental security income program for the aged or disabled or other persons, the temporary assistance to needy families program, safety net assistance, the supplemental nutrition assistance program, medical assistance, the home energy assistance program, the telephone lifeline assistance program, and any other additional assistance program or income standard approved by the commission.
(c) Providers of electric and natural gas service shall cooperate with the commission and social services districts and other agencies to certify and recertify customer eligibility through privacy protected data exchanges approved by the commission to achieve efficient enrollment of eligible customers.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07510-01-7
S. 2878 2
(d) Providers of electric and natural gas service shall strive to provide reduced residential rates to all customers eligible for them, and shall provide application forms for reduced rates to eligible lowincome customers on their websites, at their offices, and by other means. Information regarding the availability and eligibility standards for reduced rates shall be provided to residential customers at the time of service initiation, in bill inserts, in communications to customers in arrears, and by other means required or approved by the commission.
(e) The incremental revenue effects of enhancement to low-income rate programs under this section shall be deferred for subsequent rate making treatment and approval by the commission. The revenue impact of such rate reduction shall be mitigated by (i) applying any earnings of the utility above the allowed return on equity set in the most recent rate case, (ii) disallowing any premium above the rate of return allowed for not filing a rate case or for sharing of overearnings, (iii) utilizing any uncommitted funds available from current surcharges allowed by the commission and not expressly authorized by statute, (iv) disallowing recovery from ratepayers of any costs of executive compensation bonuses. After such mitigation measures, and other mitigation measures which the commission may approve, any shift of revenue responsibility to other customers due to the revenue effects of low-income rates shall not be borne solely by any single class of customer.
§ 2. The public service law is amended by adding a new section 66-o to read as follows:
§ 66-o. Reduced residential rates for electric and natural gas service to low-income customers. 1. The commission shall require electric and natural gas corporations to establish and continue programs of rate reduction and other assistance to low-income residential electric and natural gas customers, the revenue impact of which shall not be borne solely by any single class of customer. The commission shall ensure appropriate levels of rate reduction for low-income electric and natural gas customers to mitigate hardship, which shall not be less than twenty-five percent or more than thirty-five percent of the revenues that would have been produced for the same billed usage by other residential customers receiving full service from the utility who are not eligible for the reduced rate. In establishing the appropriate percentage reduction the commission shall ensure to the extent feasible that lowincome ratepayers are not jeopardized or overburdened by rates for electric and natural gas service.
2. The commission shall establish customer income and categorical eligibility standards for reduced rates, which shall include, without limitation, any customers who receive benefits from the supplemental security income program for the aged or disabled or other persons, the temporary assistance to needy families program, safety net assistance, the supplemental nutrition assistance program, medical assistance, the home energy assistance program, and the telephone lifeline assistance program.
3. The commission shall promote full penetration of the reduced rate assistance to all eligible customers through privacy protected data exchanges with agencies providing assistance to categorically eligible customers to achieve efficient enrollment, certification, and periodic recertification of eligibility.
4. The commission shall require providers of electric and natural gas service to provide information and application forms for reduced rates to eligible low-income customers on their websites, at their offices, and by other means, and to provide information regarding the availabili-
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ty and eligibility standards for reduced rates to residential customers at the time of service initiation, in bill inserts, in communications with customers in arrears, and by other means required or approved by the commission.
5. The commission shall require electric and natural gas corporations to establish reduced rates pursuant to this section to be effective no later than January first, two thousand eighteen, and to file periodic reports at least annually regarding the number of eligible customers receiving reduced rates, utility efforts to provide reduced residential rates to all customers eligible for them, and other information deemed necessary or appropriate by the commission for the efficient administration of the reduced rates.
6. The commission shall require that the incremental revenue effects of enhancement to low-income rate programs under this section be deferred for subsequent rate making treatment. The incremental revenue impact of such rate reductions shall be mitigated by:
(a) applying any earnings of the utility above the allowed return on equity set in the most recent rate case, pursuant to subdivision twenty of section sixty-six of this article;
(b) disallowing any rate of return premium for not filing a rate case or for sharing of overearnings after rates are set;
(c) utilizing any uncommitted revenues from surcharges allowed by the commission but not expressly authorized by statute; and
(d) disallowing executive compensation or bonuses not essential to the provision of safe and adequate service.
After applying revenues from such sources, and other mitigation measures which the commission may approve, any shift of revenue responsibility to other customers due to the revenue effects of low-income rates shall not be borne solely by any single class of customer.
§ 3. This act shall take effect on the sixtieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public service law, in relation to the establishment of reduced residential rates for electric and natural gas service to low-income customers
Purpose of bill
The bill is designed to protect seniors, the disabled and other persons who receive certain benefits and supports for needy families from the inordinately high electric and gas rates in New York State and to prevent vulnerable persons from having their utilities shut off, causing health and economic hardship to such consumers.
Summary of provisions of bill
Section one amends the Public Service Law by adding a new subdivision 16 to section 65.
Read the full memo (888 words)
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
2015-16: S.5819A - Amend and Recommit to Energy and Telecummunications
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.
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