New York state budget includes reforms to advance utility accountability

The state of New York’s 2013-14 budget has various reforms that will affect the state’s utilities, including allowing the state Public Service Commission (PSC) to recover more robust civil penalties for violating state law, regulations or PSC orders.

Also, the PSC will be able to undertake a more comprehensive review of utility planning and performance and be able to take whatever measures necessary, including revoking certificates and requiring utilities to divest assets, to ensure that utilities are continually able to provide safe and adequate service, according to a March 25 statement from New York Gov. Andrew Cuomo.

The budget also includes reforms that require utilities to undertake more robust emergency preparedness planning and oversight.

The governor’s statement also noted that the implemented reforms are based on recommendations made by the Moreland Commission, which Cuomo established after Hurricane Sandy, which made landfall near Atlantic City, N.J., in October 2012, as a post-tropical cyclone.

“The strengthening of the commission’s oversight authority is an important step toward ensuring the accountability by utilities regarding critical storm preparation and response, and to the utilities’ overall performance for the direct benefit of all New Yorkers,” PSC Chairman Garry Brown said in a March 26 statement provided to TransmissionHub. “These new regulatory powers, rightfully championed by Gov. Cuomo, will ensure the state’s utilities are held accountable to customers and to the regulator.”

Previously, unlike other state utility regulators, the PSC had to seek penalties in court only for “knowing” violations – that is, something the utility did intentionally. The reforms allow the PSC to levy administrative penalties against each utility for violations of the Public Service Law, PSC orders and regulations under a “reasonableness” standard, according to the governor’s statement.

The size of the potential penalties has been increased on a scale based on a percentage of utility revenues excluding taxes and will be paid through shareholder capital, not passed on to ratepayers.

The PSC is also now able to regularly audit the operations and management of the utilities and, based on those findings, direct utilities to comply with additional and more stringent terms and conditions of service. The statement added that the PSC may assess whether a utility should continue to be the provider of service in its service territory and take necessary measures to ensure adequate service.

Additionally, the PSC is allowed to revoke or modify a utility’s certificate to operate in the state based on findings of repeated violations that show a failure to provide safe and adequate service.

Utilities now have to annually file detailed emergency preparedness plans, including stronger communications requirements, and the PSC may order changes in the plans. Furthermore, the statement added, in the event of an emergency, the PSC can disallow cost recovery from ratepayers and assess penalties for not complying with the plans.

The governor’s statement also noted that new provisions are included to make it a violation of the Public Service Law for a utility to take retaliatory personnel action against an employee for reporting company violations. Additionally, CEOs will need to certify annually to the PSC that the utility has taken appropriate measures to ensure compliance with all applicable state laws, rules, regulations, orders and procedures.

According to a March 21 statement from the governor’s office, the budget includes initiatives to create jobs and grow the economy, including new tax cuts for small businesses, a new $350 tax credit for every middle class family, major education investments and reforms and an increase in the minimum wage to $9 per hour.

The budget closes a $1.3bn gap with no new taxes or fees, and it increases support for the Environmental Protection Fund and the Cleaner, Greener Communities program to launch new projects across the state that create jobs and protect the natural environment.

Cuomo and legislative leaders outlined the agreement on the budget, which is on track to pass before the April 1 deadline, according to the statement.

According to the state budget’s website, the governor is required to seek and coordinate requests from state government agencies, develop a “complete” plan of proposed expenditures and the revenues available to support them and submit a budget to the Legislature along with theappropriation bills and other legislation required to carry out budgetary recommendations.

About Corina Rivera-Linares 2843 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 14 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.