BILL NUMBER: S8801

SPONSOR: LANZA
 
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.

 
              

DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):

 
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:

New bill.

 
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.