S T A T E   O F   N E W   Y O R K
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    S. 7665                                                 A. 10138

                      S E N A T E - A S S E M B L Y

                              May 12, 2016
                               ___________

IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
  ed,  and  when  printed to be committed to the Committee on Energy and
  Telecommunications

IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once  and  referred
  to the Committee on Energy

AN  ACT  to amend the public authorities law and the public service law,
  in relation to enacting the "Long Island  power  authority  ratepayers
  protection  act";  and  to  repeal  certain  provisions  of the public
  authorities law relating thereto

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Short  title.  This  act may be cited as the "Long Island
power authority ratepayers protection act".
  S 2. Section 1020-d of the  public  authorities  law,  as  amended  by
section  4  of  part A of chapter 173 of the laws of 2013, is amended to
read as follows:
  S 1020-d. Board of trustees. 1. Starting on January first,  two  thou-
sand  fourteen,  the  board  of  the  authority shall be constituted and
consist of nine trustees all of whom shall be residents of  the  service
area,  five  of whom shall be appointed by the governor, one of whom the
governor shall designate as chair, and serve at his or her pleasure, two
of whom shall be appointed by the temporary president of the senate, and
two of whom shall be appointed by the speaker of the  assembly.  One  of
the  governor's appointees shall serve an initial term of two years; one
of the governor's appointees shall serve an initial term of three years;
and three of the governor's appointees shall serve an  initial  term  of
four  years.  One  of  the  appointees of the temporary president of the
senate and one of the appointees of the speaker of  the  assembly  shall
serve  initial  terms  of  two years; and one appointee of the temporary
president of the senate and one appointee of the speaker of the assembly
shall serve initial terms of three years. Thereafter, all terms shall be
for a period of four years. In the event of a vacancy occurring  in  the
office  of  trustee  by  death, resignation or otherwise, the respective

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD15210-01-6

S. 7665                             2                           A. 10138

appointing officer shall appoint a successor who shall hold  office  for
the unexpired portion of the term.
  1-A. (A) BEGINNING JANUARY FIRST, TWO THOUSAND NINETEEN, SUCH AUTHORI-
TY  SHALL CONSIST OF NINE TRUSTEES. ONE TRUSTEE, WHO SHALL BE THE CHAIR-
PERSON, SHALL BE A RESIDENT OF THE SERVICE AREA, SHALL BE  APPOINTED  BY
THE  GOVERNOR  SUBJECT TO CONFIRMATION BY THE SENATE, AND SHALL SERVE AT
THE GOVERNOR'S PLEASURE. EIGHT TRUSTEES SHALL BE ELECTED FROM  DISTRICTS
ESTABLISHED BY THE LEGISLATURE. EACH ELECTED TRUSTEE SHALL BE A RESIDENT
OF  THE  DISTRICT  FROM  WHICH HE OR SHE IS ELECTED. NO PERSON WHO IS AN
ELECTED OR APPOINTED OFFICIAL OF THE STATE OR ANY  MUNICIPALITY  OR  ANY
AGENCY  OR  INSTRUMENTALITY  THEREOF,  SHALL BE QUALIFIED TO SERVE AS AN
ELECTED TRUSTEE. EACH ELECTED TRUSTEE SHALL HOLD OFFICE UNTIL HIS OR HER
SUCCESSOR HAS BEEN ELECTED AND QUALIFIED. IN  THE  EVENT  OF  A  VACANCY
OCCURRING IN THE OFFICE OF A TRUSTEE BY DEATH, RESIGNATION OR OTHERWISE,
A SUCCESSOR SHALL BE CHOSEN TO HOLD OFFICE FOR THE UNEXPIRED TERM IN THE
MANNER PRESCRIBED BY THE ELECTION LAW.
  (B)  PRIOR  TO MAY FIRST, TWO THOUSAND EIGHTEEN, THE LEGISLATURE SHALL
ESTABLISH EIGHT DISTRICTS, WHICH SHALL BE EQUAL IN POPULATION AS  DETER-
MINED  BY  THE  LAST  FEDERAL  DECENNIAL CENSUS. PRIOR TO MAY FIRST, TWO
THOUSAND TWENTY-TWO AND EACH  TENTH  YEAR  THEREAFTER,  THE  LEGISLATURE
SHALL  REAPPORTION  THE  EIGHT  DISTRICTS, WHICH SHALL BE EQUAL IN POPU-
LATION AS DETERMINED BY THE LAST FEDERAL DECENNIAL CENSUS.
  (C) SUCH TRUSTEES, SHALL BE ELECTED  IN  ELECTIONS  CONDUCTED  BY  THE
BOARDS  OF  ELECTIONS  PURSUANT TO APPLICABLE PROVISIONS OF THE ELECTION
LAW. THE FIRST SUCH ELECTION SHALL BE  HELD  ON  THE  FIRST  TUESDAY  IN
DECEMBER  TWO  THOUSAND EIGHTEEN, AND THE TRUSTEES SO ELECTED SHALL TAKE
OFFICE ON JANUARY FIRST, TWO THOUSAND NINETEEN.  AT  SUCH  ELECTION  ALL
EIGHT  TRUSTEES SHALL BE ELECTED FOR A TERM OF TWO YEARS. EACH SUCH TERM
ENDING ON DECEMBER THIRTY-FIRST OF THE LAST YEAR THEREOF.  NO  POLITICAL
PARTY SHALL BE ENTITLED TO NOMINATE CANDIDATES FOR THE OFFICE OF TRUSTEE
AT ANY SUCH ELECTION.
  (D)  FIVE TRUSTEES SHALL CONSTITUTE A QUORUM FOR THE PURPOSE OF ORGAN-
IZING THE AUTHORITY AND CONDUCTING THE BUSINESS THEREOF. THE VOTE  OF  A
MAJORITY  OF  THE  TRUSTEES  SHALL BE REQUIRED FOR THE PURPOSE OF TAKING
ACTION.
  2. No trustee shall receive a salary, but each shall  be  entitled  to
reimbursement  for  reasonable  expenses  in  the  performance of duties
assigned hereunder.
  3. [Notwithstanding the provisions of any other law, no trustee, offi-
cer or employee of the state, any state agency or municipality appointed
a trustee shall be deemed to have forfeited or shall forfeit his or  her
office or employment by reason of his or her acceptance of a trusteeship
on  the  authority,  his or her service thereon or his or her employment
therewith.
  4.] All trustees appointed under  this  section  shall  have  relevant
utility,  corporate  board  or  financial  experience. BEGINNING JANUARY
FIRST, TWO THOUSAND NINETEEN  ONLY  THE  CHAIRPERSON  APPOINTED  BY  THE
GOVERNOR SHALL BE SUBJECT TO THIS SUBDIVISION.
  S  3. Subdivision (u) of section 1020-f of the public authorities law,
as added by section 7 of part A of chapter 173 of the laws of  2013  and
paragraph 2-a as added by chapter 471 of the laws of 2014, is amended to
read as follows:
  (u)  Rate  plans.  Subject  to subdivision six of section one thousand
twenty-k of this title to fix rates and charges for  the  furnishing  or
rendition  of  gas  or  electric  power or of any related service at the
lowest level consistent with sound fiscal and operating practices of the

S. 7665                             3                           A. 10138

authority and which provide for safe and adequate service. In implement-
ing this power:
  1. The authority and the service provider shall, on or before February
first,  two  thousand  fifteen,  submit  for review to the department of
public service a three-year rate proposal for rates and charges to  take
effect on or after January first, two thousand sixteen.
  2.  The authority and the service provider shall thereafter submit for
review AND APPROVAL  to  the  department  of  public  service  any  rate
proposal that would increase the rates and charges and thus increase the
aggregate  revenues  of  the  authority  by  more  than two and one-half
percent to be measured on an annual basis[; provided, however, that  the
authority  may  place  such  rates and charges into effect on an interim
basis, subject to prospective rate adjustment; provided, further, that a
final rate plan issued by the authority that would not so increase  such
rates  and charges shall not be subject to the requirements of paragraph
four of this subdivision and shall be considered final for the  purposes
of  review  under  article  seventy-eight  of the civil practice law and
rules].  The authority and/or the service provider may otherwise  submit
for  review  AND APPROVAL to such department any rate proposal irrespec-
tive of its effect on revenues.
  2-a. The authority and the service provider shall not submit any  rate
proposal  that shall assess any fee, penalty or other charge of any kind
for the voluntary termination of electric  service  to  any  residential
customer  for  the  purpose of utilizing alternative sources of electric
generation in excess of that charged to customers  who  terminate  their
electric service for any other reason.
  3.  The  authority  shall not fix any final rates and charges proposed
that would not be subject to review by the department of public  service
pursuant to paragraphs one and two of this subdivision until after hold-
ing public hearings thereon upon reasonable public notice, with at least
one such hearing to be held each in the county of Suffolk and the county
of Nassau.
  4.  Any  [recommendations]  APPROVALS  associated with a rate proposal
submitted pursuant to paragraphs one and two of this  subdivision  shall
be  provided  by  the  department  of public service to the board of the
authority immediately upon their finalization by the department. [Unless
the board of the authority makes  a  preliminary  determination  in  its
discretion  that  any particular recommendation is inconsistent with the
authority's sound fiscal operating practices, any  existing  contractual
or operating obligations, or the provision of safe and adequate service,
the]  THE  board  shall  [implement  such  recommendations] CONSIDER THE
APPROVAL OF THE DEPARTMENT as part of its DETERMINATION ON  THE  DEPART-
MENT  final  rate  plan  [and such]. THE BOARD SHALL NOT APPROVE A FINAL
RATE PLAN UNTIL IT HOLDS A PUBLIC HEARING IN EACH COUNTY OF THE  SERVICE
AREA  UPON  AT  LEAST THIRTY DAYS' NOTICE TO THE PUBLIC. THE BOARD SHALL
PROTECT THE ECONOMIC INTERESTS OF ITS RATEPAYERS AND THE SERVICE AREA IN
APPROVING ITS FINAL RATE PLAN. SUCH final determination shall be [deemed
to satisfy the requirements of this subdivision and be] considered final
for the purposes of review under  article  seventy-eight  of  the  civil
practice  law  and  rules.  [The  board  shall make any such preliminary
determination of inconsistency within thirty days  of  receipt  of  such
recommendations,  with  notice and the basis of such determination being
provided to the department  of  public  service,  and  contemporaneously
posted  on  the  websites of the authority and its service provider. The
board shall thereafter, within thirty days of such posting and with  due
advance  notice to the public, hold a public hearing with respect to its

S. 7665                             4                           A. 10138

preliminary determination of inconsistency. At such hearing, the depart-
ment of public service shall present the basis for its  recommendations,
the board shall present the basis for its determination of inconsistency
and the service provider may present its position. The authority and the
service  provider may, during the time period before such public hearing
reach agreement with the department on disputed  issues.  Within  thirty
days  after  such  public  hearing,  the  board  of  the authority shall
announce its final determination and planned implementation with respect
to any such recommendations.  The  authority's  final  determination  of
inconsistency  shall  be  subject  to  any  applicable  judicial  review
proceeding, including review available under  article  seventy-eight  of
the civil practice law and rules.]
  S 4. Section 1020-h of the public authorities law, as added by chapter
517  of  the  laws of 1986, is amended by adding a new subdivision 12 to
read as follows:
  12. NOTHING IN THIS TITLE SHALL BE CONSTRUED AS PREEMPTING, OR  OTHER-
WISE  LIMITING,  THE  RIGHTS  OF ANY MUNICIPALITY LOCATED IN WHOLE OR IN
PART IN THE SERVICE AREA FROM EXERCISING ANY POWER OR AUTHORITY  GRANTED
TO IT BY ARTICLE FOURTEEN-A OF THE GENERAL MUNICIPAL LAW.
  S 5. Subdivision 1 of section 1020-k of the public authorities law, as
added  by chapter 517 of the laws of 1986, is amended and a new subdivi-
sion 1-a is added to read as follows:
  1. [The] EXCEPT AS MAY BE OTHERWISE  PROVIDED  IN  THIS  SECTION,  THE
authority shall have power and is hereby authorized from time to time to
issue  its  negotiable bonds in conformity with applicable provisions of
the uniform commercial code for any purpose authorized  by  this  title,
including without limitation (a) to acquire any real or personal proper-
ty  or facilities deemed necessary by the authority, (b) to pay interest
on bonds or notes of the authority, (c) to establish reserves to  secure
such  bonds  and notes, (d) to establish or maintain such other funds or
accounts for such purpose or purposes as the authority may  deem  neces-
sary  or  desirable,  and (e) to pay all other expenses of the authority
incident to the issuance of such bonds or notes.
  1-A. ANY ISSUANCE OF BONDS BY THE AUTHORITY MUST BE  AUTHORIZED  BY  A
MAJORITY OF THE RATEPAYERS OF THE AUTHORITY BY A PUBLIC REFERENDUM AFTER
AT LEAST ONE PUBLIC HEARING IN EACH OF THE AFFECTED COUNTIES.
  S  6.  Section  1020-cc  of  the public authorities law, as amended by
section 11 of part A of chapter 173 of the laws of 2013, is  amended  to
read as follows:
  S  1020-cc.  Authority  subject to certain provisions contained in the
state finance law, the public service law, the social services  law  and
the  general  municipal  law. 1. All contracts of the authority shall be
subject to the provisions of the state finance law relating to contracts
made by the state. The authority shall also establish  rules  and  regu-
lations  with  respect to providing to its residential gas, electric and
steam utility customers those rights and protections provided in article
two and sections one hundred seventeen and one hundred eighteen  of  the
public  service  law  and section one hundred thirty-one-s of the social
services law. The  authority  shall  conform  to  any  safety  standards
regarding  manual lockable disconnect switches for solar electric gener-
ating equipment established by the public service commission pursuant to
subparagraph (ii) of paragraph (a) of subdivision five and  subparagraph
(ii)  of  paragraph  (a) of subdivision five-a of section sixty-six-j of
the  public  service  law.  The  authority  shall  let   contracts   for
construction  or  purchase of supplies, materials, or equipment pursuant

S. 7665                             5                           A. 10138

to section one hundred three and paragraph (e) of  subdivision  four  of
section one hundred twenty-w of the general municipal law.
  2. The authority and service provider shall provide to the state comp-
troller  on  March  thirty-first  and September thirtieth of each year a
report documenting each contract in excess of two hundred fifty thousand
dollars per year entered into with a third party and related to  manage-
ment  and  operation  services  associated with the authority's electric
transmission and distribution system, including the name  of  the  third
party,  the  contract  term and a description of services or goods to be
procured, and post such report on each of their websites. [All contracts
entered into between the service provider  and  third  parties  are  not
subject to the requirements of subdivision one of this section.]
  S 7. Section 1020-dd of the public authorities law is REPEALED.
  S 8. Paragraph a of subdivision 3 of section 3-b of the public service
law, as added by section 1 of part A of chapter 173 of the laws of 2013,
is amended to read as follows:
  (a)  Review  and [make recommendations to the board of the Long Island
power authority with respect to] APPROVE the rates and  charges  OF  THE
LONG  ISLAND  POWER AUTHORITY, including charges related to energy effi-
ciency and renewable energy programs, to be established by the authority
and become applicable on or after January first,  two  thousand  sixteen
pursuant  to  subdivision  (u)  of  section one thousand twenty-f of the
public authorities law.
  (i) The purpose of such review is to  [make  recommendations]  APPROVE
RATES  AND CHARGES designed to ensure that the authority and the service
provider provide safe and adequate transmission and distribution service
at rates set at the lowest level consistent with sound fiscal  operating
practices.    HOWEVER,  AT  NO TIME WILL THE DEPARTMENT AUTHORIZE A RATE
INCREASE TO OFFSET REVENUE LOSS DUE TO ENERGY  CONSERVATION  EFFORTS  BY
CONSUMERS.
  (ii)  The department's [recommendations] APPROVAL shall be designed to
be consistent with ensuring that the  revenue  requirements  related  to
such  rate  review are sufficient to satisfy the authority's obligations
with respect to its bonds, notes and all other contracts.
  (iii) [In the context of such review, the department may not make  any
recommendation  that  would  modify  the  compensation  or fee structure
included within the operations services agreement.] IN  THE  CONTEXT  OF
SUCH  REVIEW, THE DEPARTMENT MAY MAKE RECOMMENDATIONS WITH REGARD TO THE
COMPENSATION OR FEE STRUCTURE INCLUDED WITHIN  THE  OPERATIONS  SERVICES
AGREEMENT.
  (iv) In undertaking such review and [in making recommendations related
to]  APPROVAL  OF  the  proposed rates and charges, the department shall
establish standards, policies and procedures that, at a minimum, provide
for public statement  and  evidentiary  hearings  and  participation  of
intervenors  and  other  parties, and ensure that any final [recommenda-
tions] APPROVALS related to the proposed rates and charges are  provided
to  the  authority  within two hundred forty days of the filing with the
department of such plan.
  (v) The parties to any such rate review proceeding shall include,  but
not be limited to, department staff, the authority, the service provider
and, to the extent it deems necessary or appropriate, the utility inter-
vention unit.
  S  9.    Severability. If any provision of this act or the application
thereof shall for any reason be  adjudged  by  any  court  of  competent
jurisdiction  to  be  invalid, such judgment shall not affect, impair or
invalidate the remainder of this act, but shall be confined in its oper-

S. 7665                             6                           A. 10138

ation to the provision thereof directly involved in the  controversy  in
which the judgement shall have been rendered.
  S 10.  This act shall take effect immediately.