NY State Senate Bill 2021-S86

Senate Bill S86

2021-2022 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 05, 2022	referred to energy and telecommunications
Jan 06, 2021	referred to energy and telecommunications

2021-S86 (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
2019-2020: S1281
2023-2024: S141

2021-S86 (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.

2021-S86 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S86         REVISED 01/08/2021

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:

 
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.

 
EXISTING LAW:

 
JUSTIFICATION:

A Task Force convened in response to a massive power outage in western
Queens in 2006 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. This is further
evidenced by continued power outages recently experienced by New Yorkers
throughout Tropical Storm Isaias.

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.

 
LEGISLATIVE HISTORY:

2020: Died in Energy and Telecommunications
2019: Died in Energy and Telecommunications
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:

None

 
LOCAL FISCAL IMPLICATIONS:

 
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.

2021-S86 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    86
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD03273-01-1

 S. 86                               2
 
 WITHIN  A TWENTY-FOUR HOUR PERIOD, THE COMMISSION SHALL REQUIRE AN ELEC-
 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

 S. 86                               3
 
 REIMBURSEMENTS  AND  COMPENSATION,  PROVIDED  THAT  ANY SUCH LIMITATIONS
 SHALL TAKE INTO CONSIDERATION THE DURATION OF THE INTERRUPTION  AND  ITS
 IMPACT ON RESIDENTIAL AND COMMERCIAL CUSTOMERS.
   §  3.  On or before April 1, 2022, 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 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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