NY State Senate Bill 2025-S5593

Senate Bill S5593

2025-2026 Legislative Session

Relates to periods suspending the operation of certain rate, charge or other changes by utilities, and provisions permitting utilities to retroactively recover revenues they would have earned during such periods

download bill text pdf

Current 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
Feb 25, 2025	referred to energy and telecommunications

2025-S5593 (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §66, add §66-z, Pub Serv L

2025-S5593 (ACTIVE) - Summary

Provides that subsequent requests for an extension of a suspension period for certain rate, charge or other changes by utilities shall require approval by the public service commission and shall be valid for one month, after which the commission shall review and determine the necessity of a further extension; provides limitations on retroactive rate recovery by utilities.

2025-S5593 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5593

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the public service law, in relation to periods suspend-
ing the operation of certain rate, charge or other changes by utilities,
and provisions permitting utilities to retroactively recover revenues
they would have earned during such periods

 
PURPOSE:

This legislation would address and mitigate the financial burdens placed
on consumers due to escalating utility rates and the effects of retroac-
tive rate adjustments (known as "make whole provisions") that occur rate
cases run longer than allowed by statute.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 establishes the legislative intent, highlighting the growing
financial strain on New York residents and businesses due to escalating
utility costs and the inherent power imbalance in the favor of utilities

in rate cases.

Section 2 amends Paragraph (f) of subdivision 12 of section 66 of the
public service law, revising the extension period for utility rate case
suspensions from six to nine months. It introduces new conditions for
subsequent suspension extensions, including a monthly review process by
the Commission that factors in the impact on ratepayers.

Section 3 adds a new section, 66-x, to the public service law. This
section defines key terms and introduces gradient-based rate caps to
limit retroactive rate increases during extended suspension periods,
establishing a structured reduction in allowable rate increases over
time. It also prohibits utilities from recovering any revenue deficits
caused by these caps through future rate filings.

Section 4 contains a severability clause to ensure that if any part of
the act is declared invalid, the remaining provisions will still be
enforceable.

Section 5 specifies the act's effective date, one year after it becomes
law.

 
JUSTIFICATION:

In recent years, New Yorkers have faced unprecedented increases in util-
ity rates, putting approximately 1.5 million residential households and
thousands of businesses at risk of service terminations. These rate
hikes, combined with utilities' consistent profitability, underscore a
growing financial burden on consumers, particularly those in low-income
households.

Compounding this issue is the frequent delay in the resolution of utili-
ty rate cases, often extending beyond the statutory eleven-month suspen-
sion period due to prolonged settlement negotiations. During these
delays, utilities frequently seek and are granted "make whole"
provisions, allowing them to retroactively recover revenues based on new
rates that would have applied during the suspension period. This retro-
active adjustment often results in "rate compression," where consumers
face unexpectedly higher rates in a short period, exacerbating their
financial strain.

Although make whole provisions can theoretically apply to both rate
increases and decreases, they are predominantly used to justify
increases. This imbalance, where large utility corporations wield
disproportionate power in rate case settlements, leaves ratepayers to
bear the brunt of these financial pressures.

This bill seeks to address this imbalance by extending the statutory
timeframe for a rate case by 3 months to give all parties additional
time to reach a negotiated settlement. In rate cases that exceed the
allowable timeframe, this legislation would limit the ability of utili-
ties to retroactively recover increased rates. This legislation intro-
duces gradient-based rate caps, which will gradually reduce the permis-
sible retroactive rate increases over time during extended suspension
periods. This structured approach aims to protect consumers from sudden
and steep rate increases and promote fairness in the utility rate-set-
ting process by restoring the balance in the negotiation power between
utilities and ratepayers.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

This bill is expected to have a minimal fiscal impact on the state.

 
EFFECTIVE DATE:
This act shall take effect one year after it becomes law.

2025-S5593 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5593
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 25, 2025
                                ___________
 
 Introduced  by  Sen.  MAYER  -- 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 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

 S. 5593                             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:
 S. 5593                             3
 
   § 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
 S. 5593                             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.

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