S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6951
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 18, 2025
                                ___________
 
 Introduced  by M. of A. MAMDANI -- read once and referred to the Commit-
   tee on Energy
 
 AN ACT to amend the public service law, in relation to periods  suspend-
   ing  the  operation of certain rate, charge or other changes by utili-
   ties, and provisions permitting  utilities  to  retroactively  recover
   revenues they would have earned during such periods
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative intent.  The  legislature  finds  and  declares
 that:
   1.  In recent years, the proposed delivery rate increases and the ones
 authorized by the public service  commission  have  grown  progressively
 larger.  Escalating  utility  costs  have caused a significant financial
 strain and has left approximately 1.5 million residential households and
 thousands of businesses at risk of having their  utility  services  shut
 off.   Concurrently,   the   consistent  trend  of  utilities  achieving
 unprecedented profits jeopardizes the well-being of countless New  York-
 ers struggling to cover their utility expenses.
   2. It has become common for the resolution of rate cases to occur long
 after  the  statutory  eleven-month  suspension period, primarily due to
 prolonged settlement negotiations. When these  delays  occur,  utilities
 often  request, and the commission routinely approves, suspension exten-
 sions paired with "make whole" provisions, which allow  the  utility  to
 retroactively  recover  revenues  based on the new rates that would have
 otherwise been applied during the suspension  period.  Such  retroactive
 rate  increases  often result in "rate compression", where consumers are
 required to fund annual or multi-year rate increases over shorter  peri-
 ods of time, leading to larger, unexpected bills that can be particular-
 ly  burdensome  for  households and businesses grappling with an already
 significant rate increase.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09031-01-5
 A. 6951                             2
              

 
   3. While "make whole" agreements can be symmetrical, applying to  both
 rate  increases  and  decreases,  it is observed that in practice, these
 agreements predominately manifest in  the  context  of  rate  increases.
 Utilities currently hold undue power over the initiation and duration of
 the  rate case settlement process, yet bear minimal risk associated with
 delays to the eleven-month suspension period. Utilities initiate settle-
 ment negotiations, play a major role in the timing of meetings  and  the
 exchanges  of offers, and, because the commission lacks the authority to
 impose multi-year rate plans on utilities, negotiations  on  such  plans
 currently cannot end successfully unless and until the utility is satis-
 fied  with  the  rate  relief  provided.  Conversely, captive ratepayers
 disproportionately shoulder the liabilities  associated  with  prolonged
 settlement  negotiations and the resultant rate compression. This preva-
 lent trend, where the majority of rate cases result in increases  rather
 than  decreases,  highlights  an  inherent  imbalance in the negotiation
 power between large utility corporations and individual consumers.  Such
 imbalance  is  a matter of serious concern and underscores the necessity
 for legislative intervention.
   § 2. Paragraph (f) of subdivision 12  of  section  66  of  the  public
 service  law,  as amended by chapter 154 of the laws of 1989, is amended
 to read as follows:
   (f) Whenever there shall be filed with the commission by  any  utility
 any  schedule stating a new rate or charge, or any change in any form of
 contract or agreement or any rule or regulation relating  to  any  rate,
 charge  or service, or in any general privilege or facility, the commis-
 sion may, at any time within sixty days from the date when such schedule
 would or has become effective, either upon complaint  or  upon  its  own
 initiative,  and, if it so orders, without answer or other formal plead-
 ing by the utility, but upon reasonable notice, hold a hearing  concern-
 ing  the propriety of a change proposed by the filing. If such change is
 a major change, the commission shall hold such a hearing.  Pending  such
 hearing  and  decision  thereon,  the  commission, upon filing with such
 schedule and delivering to the utility, a statement in  writing  of  its
 reasons  therefor,  may  suspend the operation of such schedule, but not
 for a longer period than one hundred and twenty  days  beyond  the  time
 when  it  would  otherwise  go  into effect. After full hearing, whether
 completed before or after the schedule goes into effect, the  commission
 may  make  such  order  in  reference  thereto  as  would be proper in a
 proceeding begun after the rate, charge, form of contract or  agreement,
 rule,  regulation,  service,  general  privilege  or facility had become
 effective. If any such hearing cannot be concluded within the period  of
 suspension as above stated, the commission may extend the suspension for
 a  further  period, not exceeding [six] NINE months. NOTWITHSTANDING ANY
 INCONSISTENT PROVISION OF THIS PARAGRAPH, ANY SUBSEQUENT REQUESTS FOR AN
 EXTENSION OF THE SUSPENSION PERIOD SHALL REQUIRE APPROVAL BY THE COMMIS-
 SION AND SHALL BE VALID FOR A PERIOD  OF  ONE  MONTH,  AFTER  WHICH  THE
 COMMISSION SHALL REVIEW AND ORDER UPON THE NECESSITY OF A FURTHER EXTEN-
 SION.  IN  ITS DETERMINATION TO APPROVE, MODIFY, OR DENY AN EXTENSION OF
 THE SUSPENSION PERIOD, THE COMMISSION SHALL CONSIDER THE LENGTH OF  TIME
 THE RATE CASE HAS ALREADY BEEN UNDER SUSPENSION, ANY PREVIOUS EXTENSIONS
 GRANTED,  AND THE FINANCIAL IMPACTS SUCH EXTENSION WOULD HAVE ON CUSTOM-
 ERS.
   § 3. The public service law is amended by adding a new section 66-z to
 read as follows:
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   § 66-Z. GRANTING OF MAKE WHOLE PROVISIONS.  1.  DEFINITIONS.  FOR  THE
 PURPOSES  OF  THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
 MEANINGS:
   (A)  "REGULATED  UTILITY"  MEANS  AN  ELECTRIC CORPORATION, GAS CORPO-
 RATION, OR COMBINATION  GAS  AND  ELECTRIC  CORPORATION  AS  DEFINED  IN
 SECTION TWO OF THIS CHAPTER.
   (B)  "SUSPENSION  PERIOD"  MEANS THE DESIGNATED TIMEFRAME DURING WHICH
 THE IMPLEMENTATION OF A PROPOSED UTILITY RATE, CHARGE, OR RELATED CHANGE
 IS TEMPORARILY HALTED BY THE COMMISSION, PURSUANT TO  PARAGRAPH  (F)  OF
 SUBDIVISION TWELVE OF SECTION SIXTY-SIX OF THIS ARTICLE.
   (C)  "HEARING"  MEANS A FORMAL PROCEEDING CONDUCTED BY THE COMMISSION,
 INITIATED EITHER UPON COMPLAINT OR AT ITS OWN DISCRETION, TO EXAMINE AND
 DETERMINE THE APPROPRIATENESS OF PROPOSED  CHANGES  IN  RATES,  CHARGES,
 CONTRACTS,  AGREEMENTS,  RULES, REGULATIONS, SERVICES, OR GENERAL PRIVI-
 LEGES OR FACILITIES BY A UTILITY, AS OUTLINED IN PARAGRAPH (F) OF SUBDI-
 VISION TWELVE OF SECTION SIXTY-SIX OF THIS ARTICLE.
   (D) "MAKE WHOLE PROVISION" MEANS AN ARRANGEMENT IN UTILITY RATE  REGU-
 LATION THAT PERMITS A UTILITY TO RETROACTIVELY RECOVER REVENUES IT WOULD
 HAVE EARNED IF NEW RATES HAD BEEN APPLIED DURING A SUSPENSION PERIOD.
   (E)  "RATE  COMPRESSION"  MEANS  THE  PHENOMENON  WHERE  CUSTOMERS ARE
 CHARGED HIGHER RATES IN A CONDENSED TIMEFRAME TO COMPENSATE FOR RETROAC-
 TIVE RATE ADJUSTMENTS, OFTEN DUE TO THE  APPLICATION  OF  A  MAKE  WHOLE
 PROVISION.
   (F)  "RATE  PERIOD" MEANS THE TIME PERIOD IN WHICH A REGULATED UTILITY
 COLLECTS RATES THAT ARE AUTHORIZED AND APPROVED BY THE COMMISSION.
   2. LIMITATIONS ON RETROACTIVE RATE  RECOVERY.  (A)  TO  ALLEVIATE  THE
 IMPACT  OF  RATE COMPRESSION ON ALL CUSTOMERS, THE FOLLOWING LIMITATIONS
 ON MAKE WHOLE PROVISIONS ARE HEREBY ESTABLISHED FOR  ANY  PERIOD  BEYOND
 THE INITIAL SUSPENSION PERIOD. THE PERCENTAGE LIMIT APPLIED SHALL EXTEND
 UNIFORMLY TO THE ENTIRETY OF THE EXTENDED SUSPENSION PERIOD.
   (I)  FOR  THE  FIRST  TWO  MONTHS BEYOND THE INITIAL SUSPENSION PERIOD
 PRIOR TO A HEARING, A UTILITY MAY RECOVER UP TO NINETY  PERCENT  OF  THE
 ADDITIONAL  REVENUES  IT  WOULD  HAVE  COLLECTED  HAD THE NEW RATES BEEN
 EFFECTIVE DURING THE RATE PERIOD.
   (II) FOR THE THIRD MONTH, A UTILITY MAY RECOVER UP TO SEVENTY  PERCENT
 OF  THE  ADDITIONAL  REVENUES  IT WOULD HAVE COLLECTED HAD THE NEW RATES
 BEEN EFFECTIVE DURING THE RATE PERIOD.
   (III) FOR THE FOURTH MONTH, A UTILITY MAY RECOVER UP TO THIRTY PERCENT
 OF THE ADDITIONAL REVENUES IT WOULD HAVE COLLECTED  HAD  THE  NEW  RATES
 BEEN EFFECTIVE DURING THE RATE PERIOD.
   (IV)  FOR  THE  FIFTH MONTH AND ANY SUBSEQUENT MONTHS, A UTILITY SHALL
 NOT RECOVER ANY ADDITIONAL REVENUES FOR THE RATE PERIODS.
   (B) IN INSTANCES WHERE A  MAKE  WHOLE  PROVISION  IS  GRANTED  BY  THE
 COMMISSION,  A  UTILITY  SHALL  NOT  SEEK TO RECOVER, IN ANY FUTURE RATE
 FILINGS OR THROUGH ANY OTHER FINANCIAL MECHANISM OR STRATEGY, ANY REVEN-
 UES NOT RECOVERED DUE TO THE LIMITATIONS SPECIFIED IN PARAGRAPH  (A)  OF
 THIS  SUBDIVISION, NOR SHALL ANY INTEREST OR CARRYING CHARGES BE IMPOSED
 ON ANY DEFERRED RECOVERY GRANTED UNDER A MAKE WHOLE PROVISION.
   (C) IN THE ABSENCE OF A MULTI-YEAR RATE PERIOD, ANY ALLOWABLE RECOVERY
 UNDER A MAKE WHOLE PROVISION, AS  LIMITED  BY  THIS  SECTION,  SHALL  BE
 DEFERRED  AS  DETERMINED  BY  THE COMMISSION, PROVIDED HOWEVER THAT SUCH
 RECOVERY SHALL OCCUR OVER A PERIOD SPECIFIED BY  THE  COMMISSION  WITHIN
 THE  FOLLOWING  TWO  FISCAL  YEARS  AND SHALL NOT INCLUDE ANY ADDITIONAL
 COSTS OR INTEREST CHARGES TO CUSTOMERS.
   § 4. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, section or part of this act shall be  adjudged  by  any  court  of
 A. 6951                             4
 
 competent  jurisdiction  to  be invalid, such judgment shall not affect,
 impair, or invalidate the remainder thereof, but shall  be  confined  in
 its  operation  to the clause, sentence, paragraph, subdivision, section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the  legislature  that  this  act  would  have been enacted even if such
 invalid provisions had not been included herein.
   § 5. This act shall take effect one year after it shall have become  a
 law.