NY State Senate Bill 2019-S1281

Senate Bill S1281

2019-2020 Legislative Session

Directs public service commission to require electric and steam corporations to provide rate reductions or refunds for inadequate or interrupted service

download bill text pdf

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to energy and telecommunications
Jan 14, 2019	referred to energy and telecommunications

2019-S1281 (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§66 & 80, Pub Serv L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S1981
2013-2014: S593
2015-2016: S2424
2017-2018: S2670
2021-2022: S86
2023-2024: S141

2019-S1281 (ACTIVE) - Summary

Directs the public service commission to require electric and steam corporations to provide rate reductions or refunds for inadequate or interrupted service; requires electric corporations to reimburse ratepayers for damages to and losses of property and business caused by power outages in certain instances.

2019-S1281 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1281

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act to amend the public service law, in relation to the power of the
public service commission to require refunds of or reductions in rates
for inadequate or interrupted electric or steam service

 
PURPOSE:

In its January 2007 report, the Assembly Queens Power outage Task Force
recommended several measures to improve oversight of utilities and
prevent future blackouts. This bill provides for prompt, meaningful rate
refunds or reductions in cases where an electric utility fails to meet
its statutory duty to provide the public with a safe and adequate supply
of power.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision 20 of § 66 of the Public Service Law to

require the Public Service Commission (PSC) to impose prompt, meaningful
rate refunds or reductions in instances where electric corporations fail
to meet objectively measured service quality standards. Refunds or
reductions shall at a minimum equal 5% of the amount billed to a custom-
er for at least a 12-month period, subject to possible minimum and maxi-
mum cutoffs prescribed by the PSC. The bill also establishes minimum
reimbursements for service outages in cities with populations of at
least 1 million. Where an outage lasts more than 12 hours in a 24-hour
period, such reimbursements shall be at least:

*$500 for spoilage of food and medications,

*$1,000 for damages to electrical equipment and instruments, and

*$10,000 to commercial customers for lost business.

The PSC may also establish reasonable aggregate limits on reimburse-
ments.

The bill provides that additional rounds of reimbursement consistent.
with the foregoing are required for each additional 48-hour period that
the service interruption continues, and that any voltage reductions that
are extensive enough to damage electric equipment or render it inopera-
ble shall be treated as covered interruptions in service.

Section 2 adds a new subdivision 13 to § 80 of the Public Service Law,
establishing provisions for rate refunds or reductions for substandard
service quality, and reimbursement for damages caused by service inter-
ruptions, applicable to steam corporations.

Section 3 requires the PSC to report to the Governor and Legislature by
April 1, 2018 on whether additional legislation, regulations or other
actions are needed to ensure that all electric and steam corporations
adequately reimburse their customers for losses due to service inter-
ruptions and other performance failures.

 
JUSTIFICATION:

In 2006, the western part of Queens suffered a massive power outage that
lasted 9 days. The Assembly Queens power Outage Task Force studied the
outage's causes and the inadequate responses by the company responsible
for the transmission and distribution system, Consolidated Edison, and
by the Public Service Commission. One underlying cause of this debacle
was found to be the reliance by New York is utility regulators on anti-
quated laws, regulations and policies that let companies engaged in
energy transmission and distribution operate without effective over-
sight.

The Task Force found that current PSC practices fail to incentivize
utilities to meet their statutory Obligations to provide safe and
adequate electric service. Findings that a utility has failed to meet
service reliability standards result at best in token penalties, and
even these amounts are routinely amortized or are deferred until a
subsequent rate proceeding. As a result, ignoring service quality
targets may well make economic sense for the utility.

After the bill was initially drafted, a major steam explosion and conse-
quent damage to persons and property demonstrated that similar require-
ments were needed for steam corporations.

This bill sets forth a standard - generally, 5 of annual billings that
is substantial enough to restore meaningful incentives for utilities to
take service quality standards seriously. At the same time, the bill
provides realistic reimbursement standards for utilities serving metro-
politan areas in cases where the utility fails to maintain the electric
grid or steam system in good working condition. In circumstances where
electric or steam service is interrupted for large swaths of a metropol-
itan area, customers should not be expected to bear the brunt of
expenses caused by unwise deferrals of maintenance or other utility
mismanagement.

 
PRIOR LEGISLATIVE HISTORY:

2018: Died in Energy and Telecommunications

2017: Died in Energy and Telecommunications

2016: Died in Energy and Telecommunications

2015: Died in Energy and Telecommunications

2014: Senate Bill 593-a (Gianaris) Died in Senate Energy & Telecommuni-
cations Committee

2013: Senate Bill 593 (Gianaris) Died in Senate Energy & Telecommuni-
cations Committee

2012: Senate Bill 1981-A (Gianaris)Died in Senate Energy & Telecommuni-
cations Committee

2013: Assembly Bill 668 (Hevesi)Died in Assembly Corporations, Authori-
ties and Commissions Committee

2012: Assembly Bill 2228-A (Hevesi) - Died in Assembly Corporations,
Authorities and Commissions Committee

2010: Assembly Bill 1556 (Gianaris) - Died in Assembly Corporations,
Authorities and Commissions Committee

2008: Assembly Bill 8621-A (Gianaris) - Died in Assembly Corporations,
Authorities and Commissions Committee

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
180th day after enactment; provided that the Public Service Commission
is immediately authorized and directed to promulgate rules and take
other actions needed to fully implement the bill on such date.

2019-S1281 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1281
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2019
                                ___________
 
 Introduced  by Sen. GIANARIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN  ACT to amend the public service law, in relation to the power of the
   public service commission to require refunds of or reductions in rates
   for inadequate or interrupted electric or steam service

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 20 of section 66 of the public service law, as
 added by chapter 394 of the laws of 1978, is amended to read as follows:
   20. (A) Notwithstanding any general or  special  law,  rule  or  regu-
 lation, the commission shall have the power to provide for the refund of
 any revenues received by any gas or electric corporation which cause the
 corporation  to  have revenues in the aggregate in excess of its author-
 ized rate of return for a period of twelve months.  The  commission  may
 initiate a proceeding with respect to such a refund after the conclusion
 of any such twelve month period.
   (B)  NOTWITHSTANDING  ANY  GENERAL OR SPECIAL LAW, RULE OR REGULATION,
 THE  COMMISSION  SHALL  IMPOSE  PROMPT,  MEANINGFUL  RATE   REFUNDS   OR
 REDUCTIONS  IN INSTANCES WHERE ELECTRIC CORPORATIONS FAIL TO MEET OBJEC-
 TIVELY MEASURED SERVICE QUALITY STANDARDS. SUCH  REFUNDS  OR  REDUCTIONS
 SHALL AT A MINIMUM EQUAL FIVE PERCENT OF THE AMOUNT BILLED TO A CUSTOMER
 FOR  THE  PROVISION OF ELECTRIC SERVICE FOR A PERIOD OF TWELVE MONTHS OR
 SUCH LONGER PERIOD AS THE COMMISSION MAY PRESCRIBE;  PROVIDED,  HOWEVER,
 THAT  THE COMMISSION MAY PRESCRIBE A SCHEDULE SETTING FORTH BOTH MINIMUM
 AND  MAXIMUM  AMOUNTS  THAT  A  CUSTOMER  MAY  RECEIVE  IN  REFUNDS   OR
 REDUCTIONS.
   (C)  IN  ADDITION  TO THE PROVISIONS OF PARAGRAPHS (A) AND (B) OF THIS
 SUBDIVISION, IN EVERY INSTANCE WHERE ELECTRIC SERVICE IS INTERRUPTED DUE
 TO A LOCAL DISTRIBUTION SYSTEM FAILURE LASTING FOR TWELVE HOURS OR  MORE
 WITHIN  A TWENTY-FOUR HOUR PERIOD, THE COMMISSION SHALL REQUIRE AN ELEC-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04468-01-9

 S. 1281                             2
 
 TRIC CORPORATION THAT DISTRIBUTES ELECTRICITY IN A CITY OF  ONE  MILLION
 OR  MORE TO (1) REIMBURSE CUSTOMERS FOR DAMAGES TO OR LOSSES OF PROPERTY
 INCLUDING, BUT NOT LIMITED TO PERISHABLE  FOOD  ITEMS  AND  MEDICATIONS,
 ELECTRICAL  EQUIPMENT,  COMPUTER  EQUIPMENT, AIR CONDITIONING EQUIPMENT,
 AND OTHER ELECTRONIC EQUIPMENT AND INSTRUMENTS USED BY COMMERCIAL ESTAB-
 LISHMENTS OR RESIDENCES; AND (2)  PROVIDE  APPROPRIATE  COMPENSATION  TO
 THOSE  COMMERCIAL  CUSTOMERS  WHO  HAVE LOST BUSINESS AS A RESULT OF THE
 SERVICE INTERRUPTION. SUCH COMPENSATION SHALL BE BASED UPON THE  AVERAGE
 REVENUES  EARNED  BY THE BUSINESS IN SIMILAR TIME PERIODS, OR, FOR A NEW
 BUSINESS, THE AVERAGE REVENUES EARNED BY SIMILAR BUSINESSES  IN  SIMILAR
 TIME  PERIODS.  THE  COMMISSION  MAY  PRESCRIBE REASONABLE LIMITS ON THE
 AMOUNT OF  REIMBURSEMENT  AND  COMPENSATION  AVAILABLE  TO  A  CUSTOMER;
 PROVIDED  THAT  SUCH AMOUNTS SHALL NOT BE LESS THAN FIVE HUNDRED DOLLARS
 FOR LOSSES OF FOOD AND MEDICATIONS, ONE THOUSAND DOLLARS FOR DAMAGES  TO
 ELECTRICAL  EQUIPMENT AND INSTRUMENTS, AND TEN THOUSAND DOLLARS FOR LOST
 BUSINESS.  ADDITIONAL REIMBURSEMENT AND COMPENSATION IN ACCORDANCE  WITH
 THE  PRECEDING  REQUIREMENTS  SHALL  BE  PROVIDED  TO  EACH CUSTOMER WHO
 REMAINS WITHOUT ELECTRICITY FOR EACH ADDITIONAL FORTY-EIGHT HOUR  PERIOD
 THAT  THE SERVICE INTERRUPTION CONTINUES. FOR THE PURPOSES OF THIS PARA-
 GRAPH, INTERRUPTION OF ELECTRIC  SERVICE  SHALL  BE  DEEMED  TO  INCLUDE
 REDUCTIONS  IN VOLTAGE THAT DAMAGE ELECTRIC EQUIPMENT OR RENDER IT FUNC-
 TIONALLY INOPERABLE. THE COMMISSION MAY PROVIDE FOR  REASONABLE  LIMITA-
 TIONS  ON  THE  AGGREGATE  AMOUNT  OF  REIMBURSEMENTS  AND COMPENSATION,
 PROVIDED THAT ANY SUCH LIMITATIONS SHALL  TAKE  INTO  CONSIDERATION  THE
 DURATION  OF  THE INTERRUPTION AND ITS IMPACT ON RESIDENTIAL AND COMMER-
 CIAL CUSTOMERS.
   § 2. Section 80 of the public service law is amended by adding  a  new
 subdivision 13 to read as follows:
   13.  NOTWITHSTANDING  ANY  GENERAL OR SPECIAL LAW, RULE OR REGULATION,
 HAVE POWER TO IMPOSE PROMPT, MEANINGFUL RATE REFUNDS  OR  REDUCTIONS  IN
 INSTANCES  WHERE  STEAM  CORPORATIONS  FAIL TO MEET OBJECTIVELY MEASURED
 SERVICE QUALITY STANDARDS. SUCH REFUNDS OR REDUCTIONS SHALL AT A MINIMUM
 EQUAL FIVE PERCENT OF THE AMOUNT BILLED TO A CUSTOMER FOR THE  PROVISION
 OF  SERVICE  FOR  A PERIOD OF TWELVE MONTHS OR SUCH LONGER PERIOD AS THE
 COMMISSION MAY PRESCRIBE; PROVIDED, HOWEVER,  THAT  THE  COMMISSION  MAY
 PRESCRIBE A SCHEDULE SETTING FORTH BOTH MINIMUM AND MAXIMUM AMOUNTS THAT
 A  CUSTOMER  MAY RECEIVE IN REFUNDS OR REDUCTIONS. IN ADDITION, IN EVERY
 INSTANCE WHERE SERVICE IS INTERRUPTED FOR A PERIOD OF FORTY-EIGHT  HOURS
 OR  SUCH  LESSER  PERIOD AS THE COMMISSION MAY DETERMINE, THE COMMISSION
 SHALL REQUIRE A STEAM CORPORATION THAT PROVIDES SERVICE IN A CITY OF ONE
 MILLION OR MORE TO REIMBURSE CUSTOMERS FOR DAMAGES TO OR LOSSES OF PROP-
 ERTY AND TO PROVIDE APPROPRIATE COMPENSATION TO THOSE COMMERCIAL CUSTOM-
 ERS WHO HAVE LOST BUSINESS AS A RESULT OF THE SERVICE INTERRUPTION. SUCH
 COMPENSATION SHALL BE BASED UPON THE  AVERAGE  REVENUES  EARNED  BY  THE
 BUSINESS  IN  SIMILAR  TIME PERIODS, OR, FOR A NEW BUSINESS, THE AVERAGE
 REVENUES EARNED BY SIMILAR  BUSINESSES  IN  SIMILAR  TIME  PERIODS.  THE
 COMMISSION  MAY  PRESCRIBE REASONABLE LIMITS ON THE AMOUNT OF REIMBURSE-
 MENT AND COMPENSATION  AVAILABLE  TO  A  CUSTOMER;  PROVIDED  THAT  SUCH
 AMOUNTS  SHALL NOT BE LESS THAN FIVE HUNDRED DOLLARS FOR LOSSES OF PROP-
 ERTY AND TEN THOUSAND DOLLARS FOR LOST BUSINESS.  ADDITIONAL  REIMBURSE-
 MENT  AND  COMPENSATION  IN  ACCORDANCE  WITH THE PRECEDING REQUIREMENTS
 SHALL BE PROVIDED TO EACH CUSTOMER WHO REMAINS WITHOUT SERVICE FOR  EACH
 ADDITIONAL  FORTY-EIGHT  HOUR  PERIOD, OR LESSER PERIOD AS DETERMINED BY
 THE COMMISSION, THAT THE SERVICE INTERRUPTION CONTINUES. THE  COMMISSION
 MAY  PROVIDE  FOR  REASONABLE  LIMITATIONS  ON  THE  AGGREGATE AMOUNT OF
 REIMBURSEMENTS AND COMPENSATION,  PROVIDED  THAT  ANY  SUCH  LIMITATIONS

 S. 1281                             3
 
 SHALL  TAKE  INTO CONSIDERATION THE DURATION OF THE INTERRUPTION AND ITS
 IMPACT ON RESIDENTIAL AND COMMERCIAL CUSTOMERS.
   §  3.  On or before April 1, 2020, the public service commission shall
 review its existing policies and shall report to the  governor,  speaker
 of the assembly, the temporary president of the senate, the chair of the
 senate  finance  committee,  the  chair  of  the assembly ways and means
 committee, the chair of the assembly energy committee and the  chair  of
 the senate energy and telecommunications committee on whether additional
 legislation,  regulations  or  other  actions  are needed to ensure that
 electric and steam  corporations  adequately  reimburse  and  compensate
 their  customers for losses due to service interruptions and other fail-
 ures to provide safe and adequate service  as  required  by  the  public
 service law.
   § 4. This act shall take effect on the one hundred eightieth day after
 it shall have become a law. Provided, that the public service commission
 is  immediately  authorized  and  directed  to take any and all actions,
 including but not limited to the promulgation of any necessary rules and
 the review of reimbursement  and  compensation  policies,  necessary  to
 fully implement the provisions of this act on its effective date.

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