Expand Energy Rebates for Recyclers

1 Co-sponsor

• Diane J. Savino

Title of bill

An act to amend the administrative code of the city of New York, in relation to the application of special rebates and discounts to certain eligible energy users

Purpose or general idea of bill

To remove a ceiling on annual benefits under the Energy Cost Savings Program for certain eligible energy users engaged in certain manufactur- ing activities.

Summary of provisions

The bill removes the ceiling on annual benefits for certain eligible energy users engaged in a manufacturing activity that involves producing new goods from recyclables collected from residential sources, which are those that are collected by the City's Department of Sanitation.

Justification

For decades the Energy Cost Savings Program has existed to mitigate the extraordinarily high and regionally uncompetitive local cost of electric and gas services to encourage the development, reinvestment in, and maintenance of industrial and commercial activities within the City of New York. When the act was renewed in June 2003, a ceiling was added along with other changes to mitigate the overall cost and to limit the benefits that could be reaped by larger server farms and similar inten- sive energy users that were not viewed as in need of assistance and did not create many new jobs in relation to their energy consumption. By strictly tying benefits only to employment levels, however, the cap adversely impacts certain large-scale manufacturing businesses that provide critical services to the City of New York's recycling infras- tructure by maintaining a closed loop system for remanufacturing recycl- ables into new finished goods. These businesses not only contribute to the overall local economy but also ensure that the City of New York will always have a reliable destination for the substantial quantities of recyclables regularly collected by the City. Manufacturing businesses of this type, whose products compete in regional and national commodity markets, are peculiarly vulnerable to the adverse impact of high local regulated utility delivery costs that persist in New York because of embedded stranded costs and high local utility taxes. This bill seeks to address the disparity to preserve this sector for the long-term benefit of the residents of the City.

Prior legislative history

2018: 8.8801 - Referred to Cities/A.10687 - Referred to Cities

Fiscal implications for state and local governments

Under the Energy Cost Savings Program, benefits are provided to eligible user through discounts on the regulated delivery costs charged by local utilities providing electric and gas service. The utilities recover the lost revenue through credits against the gross receipts tax they pay to the City. Because of the limited scope of the bill, it is only expected to increase these credits by less than $3 million annually.

Effective date

This act shall take effect immediately.