§ 3-b. Long Island office of the department. 1. There is hereby
established in the department an office to review and make
recommendations with respect to the operations and terms and conditions
of service of, and rates and budgets established by, the Long Island
power authority and/or its service provider.

2. Definitions. As used or referred to in this section:

(a) "Authority" means the Long Island power authority.

(b) "Service provider" means the entity under contract with the
authority to provide management and operation services associated with
the authority's electric transmission and distribution system and any
subsidiary of such entity that provides such services under contract.
However, the service provider and any affiliate of the service provider
with whom the authority or service provider contracts to provide
services associated with the authority's electric transmission and
distribution system shall not be considered an electric corporation
under this chapter.

(c) "Operations services agreement" means an agreement and any
amendments thereto between the Long Island lighting company dba LIPA or
the Long Island power authority and the service provider to provide
management and operation services associated with the authority's
electric transmission and distribution system.

3. General powers. In undertaking the requirements of this section,
subject to subdivisions (u) and (bb) through (hh) of section one
thousand twenty-f of the public authorities law, the department shall be
empowered and authorized to:

(a) Review and make recommendations to the board of the Long Island
power authority with respect to the rates and charges, including charges
related to energy efficiency and renewable energy programs, to be
established by the authority and become applicable on or after January
first, two thousand sixteen pursuant to subdivision (u) of section one
thousand twenty-f of the public authorities law.

(i) The purpose of such review is to make recommendations designed to
ensure that the authority and the service provider provide safe and
adequate transmission and distribution service at rates set at the
lowest level consistent with sound fiscal operating practices.

(ii) The department's recommendations shall be designed to be
consistent with ensuring that the revenue requirements related to such
rate review are sufficient to satisfy the authority's obligations with
respect to its bonds, notes and all other contracts.

(iii) In the context of such review, the department may make
recommendations with regard to the compensation or fee structure
included within the operations services agreement.

(iv) In undertaking such review and in making recommendations related
to the proposed rates and charges, the department shall establish
standards, policies and procedures that, at a minimum, provide for
public statement and evidentiary hearings and participation of
intervenors and other parties, and ensure that any final recommendations
related to the proposed rates and charges are provided to the authority
within two hundred forty days of the filing with the department of such
plan.

(v) The parties to any such rate review proceeding shall include, but
not be limited to, department staff, the authority, the service provider
and, to the extent it deems necessary or appropriate, the utility
intervention unit.

(b) Review the annual capital expenditures proposed by the service
provider and recommend such improvement in the manufacture, conveying,
transportation, distribution or supply of electricity, or in the methods
employed by the the service provider as in the department's judgment
allows for safe and adequate service.

(c) Annually review the emergency response plan of the authority and
the service provider in accordance with the following requirements:

(i) Examine and determine whether the emergency response plan is
consistent with the requirements of paragraph (a) of subdivision
twenty-one of section sixty-six of this chapter and any regulations or
orders promulgated thereto, and to recommend amendments of same; and

(ii) Review and make recommendations to the authority with respect to
the performance of the service provider in restoring service or
otherwise meeting the requirements of the emergency response plan during
an emergency event, defined for purposes of this section as an event
where widespread outages have occurred in the authority's service
territory due to a storm or other causes beyond the control of the
authority and its service provider, including making determinations with
respect to whether the service provider is reasonably able to implement
the emergency response plan, whether the length of any outages related
to such emergency were materially longer than they would otherwise have
been because the service provider failed to reasonably implement the
emergency response plan, the reasonableness of costs associated with
such emergency response, the costs, if any, that were unreasonably and
imprudently incurred by the service provider, and whether the service
provider would be liable for any such costs pursuant to the terms and
conditions of the operations services agreement.

(d) Upon notification to the Long Island power authority, undertake a
comprehensive and regular management and operations audit of the
authority and service provider pursuant to subdivision (bb) of section
one thousand twenty-f of the public authorities law. The department
shall have discretion to have such an audit performed by its staff, or
by an independent contractor. In every case in which an audit is
required pursuant to subdivision (bb) of section one thousand twenty-f
of the public authorities law performed by an independent auditor, the
department shall have the authority to select the auditor, and to
require the authority to enter into a contract with the auditor that is
consistent with the contracting-related requirements specified in
subdivision nineteen of section sixty-six of this chapter and the
requirements of subdivision (bb) of section one thousand twenty-f of the
public authorities law. Such contract shall provide further that the
auditor shall work for and under the direction of the department
according to such terms as the department may determine are necessary
and reasonable.

(e) Accept, investigate, mediate to resolve and make recommendations
to the Long Island power authority and/or the service provider regarding
the resolution of complaints from consumers in the authority's service
territory relating to, among other things, the provision of electric
service provided by the service provider and/or the authority.

(f) Review the net metering program implemented under subdivision (h)
of section one thousand twenty-g of the public authorities law and make
recommendations designed to ensure consistency with the requirements of
sections sixty-six-j and sixty-six-l of this chapter, and any
regulations and orders adopted thereto.

(g) Review and make recommendations with respect to any proposed plan
submitted by the Long Island power authority and/or the service provider
related to implementation of energy efficiency measures, distributed
generation or advanced grid technology programs having the purpose of
providing customers with tools to more efficiently and effectively
manage their energy usage and utility bills, and improving system
reliability and power quality.

(h) Review the data, information and reports submitted pursuant to
subdivision (hh) of section one thousand twenty-f of the public
authorities law and other pertinent information related to the metrics
in the operations services agreement, the Long Island power authority's
evaluation of such data, information and reports, and make
recommendations to the authority with respect to the service provider's
annual incentive-based compensation within thirty days of receipt of
such evaluation and information.

4. Review and inspection. To undertake the requirements of subdivision
two of this section, the department shall be authorized to inspect all
premises and facilities owned or operated by the authority and the
service provider, review all books and records of the authority and the
service provider, interview all appropriate personnel, and require
annual reporting consistent with the requirements of subdivision six of
section sixty-six of this chapter and any regulations and orders adopted
thereto; provided, however, that this authority shall not extend to
affiliates of the service provider.